Increase Sales and Profits Through Better Negotiating Skills
By Deborah Jeanne Sergeant

Best known for his series of business books and audio recordings pertaining to effective negotiation methods, Roger Dawson offers advice that has never been timelier than during the current economic recession. Home Business® Magazine recently spoke with Dawson about how the home business entrepreneur can use the power of negotiation to stay competitive during tough times.
Home Business® Magazine (HBM): Why is the power of negotiation important in today’s economy?

Roger Dawson (RD): A negotiated dollar is a bottom line profit dollar. People don’t know the size of overhead. You cannot make money faster than when you’re negotiating.

HBM: How can home business owners become better at negotiating?

RD: It’s all very simple. It’s not hard to understand. Ask for more than what you expect to get. There are quite a few reasons for doing it. Number one, you might just get it, because you don’t know how the other party feels about it. Number two, it gives you negotiation room because you can always go down but you can’t go up. The key reason for asking for more is that it creates an environment in which the other side can win with you. It raises your perceived value. If you say to a potential customer, “I normally charge $500 and I’m charging you $400,” it lowers your perceived value. Number three, asking for more prevents deadlock with an egotistical person, not stating your only, lowest deal. If you don’t give them room to have a win, you have deadlock.

HBM: What is the top mistake entrepreneurs make when negotiating?

RD: They let the other side know they have the authority to make a concession. If you say, “Let me run that by my people,” it can put a lot of pressure on people without being confrontational. Be vague in who you’re talking about as the higher authority.

HBM: How can home-based entrepreneurs win repeat business and larger orders?

RD: You have to know the audience, understand what they do, and talk their language. They’ve got to feel that you really understand what they mean. Tailor your presentation and your suggestion to their particular needs, not yours.

HBM: How can entrepreneurs avoid being too pushy-sounding while negotiating?

RD: Your power comes from making the other side understand that you have alternatives. You have options. That way, you don’t have to cut your price as you would if you’re sitting there begging for business. If you don’t sound needy, you get this “walk away” power. It’s the smartest thing you can do. Let’s say you want to buy some office equipment. If you fall in love with some office equipment, the smartest thing you can do is find something else you like almost as much so you’re willing to walk away. The other side can always sense if you have other options.

HBM: What is your home office like?

RD: A room in the second story of my home that overlooks my golf club. It’s a very pleasant environment. I have rented big offices, and what you find is you’re always fighting to pay the big overhead. Be lean, be lean, I’ve learned 15 years ago.

HBM: How does technology help you stay efficient?

RD: I’m a low-tech guy stuck in a high-tech world. I can make a phone call on my cellular phone and read e-mail, but I don’t understand Twitter or Facebook. You can spend an awful lot of time on those thinking you’re busy, but you’re not really getting anything done. You’ve got to be sure that at all times, you’re doing something that’s not the most urgent thing but that which will bring you closer to your goals as a home-based entrepreneur.

On a Personal Note

British-born Dawson became a US citizen in 1972. As president of one of California’s largest real estate firms, he helped the company grow to more than $400 million in annual sales. In 1982 at age 42, he became a full-time motivational speaker and author. His books include Secrets of Power Negotiating, Secrets of Power Persuasion, and Thirteen Secrets of Power Performance, among others. He has three grown children and two grandchildren. He and his wife, Gisela (pictured on the right), live in La Habra Heights, California.  HBM

Deborah Jeanne Sergeant writes from her home in Wolcott, N.Y. Her web site is www.skilledquill.net.

Previously published in the August 2009 issue of HOME BUSINESS® Magazine, an international publication for the growing and dynamic home-based market. Available on newsstands, in bookstores and chain stores, and via subscriptions ($15.00 for 1 year, six issues). Visit www.homebusinessmag.com