The UK start-up space is booming. According to GOV.uk, between 500,000 – 700,000 new businesses launch yearly. However, Office for National Statistics data shows that fewer than half of new startups ring in their fifth birthday.
What can new startups do to increase their chance of success? Learn how to negotiate, for one. Startups skilled at negotiating can grow an incredible 30% faster according to research by Columbia Business School. They are also twice as likely to achieve profitability. Keep reading to learn four tips from Negotiation Experts that could help you steer your startup toward explosive growth.
Create an investor profile
Many founders make the mistake of chasing any investor flashing their chequebook. Be warned that hooking your wagon to the wrong partner can leave you spiralling rapidly to an early grave.
An investor profile helps you zero in on who is best to approach. That way you’re not wasting time schmoozing people whose interests you’re unlikely to spark. Here are some questions to consider when creating an investor profile:
- Funding details. How much money do you need? It’s important to be specific as it demonstrates that you have done your research and have a plan.
- Industry experience. An investor who knows your industry can provide valuable insights and help you avoid potential pitfalls.
- Track record. Do they tend to invest in companies that go on to achieve great results? Or do they have a history of getting involved in questionable deals?
- Alignment of interests. Are they looking for a quick flip or are they in it for the long haul?
Build relationships before you need them
Negotiating can be daunting and doing it with strangers is even more so. There’s always the risk that they might perceive you as untrustworthy since they have no frame of reference for your character. That’s why it’s a good idea to build relationships before you need them.
Building relationships takes time and effort but it’s well worth the wait in the long run. Think about it this way: if you show up with 20 solid references, people are more likely to trust you and take your word on a deal you propose. Just remember, great relationships are a two-way street. Be sure to add value and make it worth their while as well.
Figure out how to leverage your product, service, or skills
When cold hard cash is in short supply, you’re not out of options. You can still leverage your products, services, or skills. Here’s how Unbounce used this tip to score big. The company wanted to offer beer at its first open house. However, cash was tight. So, they struck a deal with Granville Island Brewing.
Granville, a local startup microbrewery, was struggling to get their product into local bars and restaurants. Unbounce offered to showcase Granville’s beer at its open house. They also designed (a skill they’d mastered) a new label for Granville Island’s seasonal beer. In exchange, they asked for enough beer to serve at their event.
The deal was a match made in heaven. Unbounce got free beer and Granville Island got valuable exposure. Everyone walked away deliciously happy. The cost was also minimal in comparison to the gains. So, think about what you have to offer and get creative. You might be surprised at what you can get in return.
Strengthen your emotional intelligence
Emotional intelligence (EQ) is the ability to be aware of and understand your own emotions and the emotions of others. Negotiations will often test your patience and resolve. If you keep flying off the handle when things don’t go your way, it could sour any future business dealings.
When you have a strong handle on your emotions, it’s easier to stay levelheaded. This allows you to make sound decisions, even when discussions get heated. Strengthening EQ can also help you build rapport and trust, which is vital when you’re trying to grow your business.
- Be well prepared as it will help you feel more confident and in control.
- Pay close attention to what the other person is saying and try to understand their perspective.
- Don’t try to bulldoze your way through the meeting.
- Don’t take things personally. Remember that it’s not about you as a person. It’s about getting the best possible outcome for your business.
Whether you’re trying to slash overhead expenses or looking to tap into new markets, knowing how to negotiate can help accelerate your startup’s growth. These expert tips can help you confidently pitch your business and close impressive deals.