Launching a startup can be a daunting yet exciting experience. Once you get your business up and running and the profits start rolling in, the next question you need to address is expansion.
Here is some expert negotiation advice that can help you grow your startup the best way.
Growing a startup takes time. When you analyze how that time is spent, you'll likely find that a lot of that time is spent negotiating. You’ll probably find yourself negotiating with:
You may want to invest in best negotiation training when you consider that any of those discussions can fuel the company’s growth or bring it to an abrupt halt.
A solid set of bargaining skills can help you secure funding, solve problems, and manage conflicts. Furthermore, knowing how to bargain can help you build and nurture key relationships that are essential for the growth of your startup.
Build relationships before you need them
Shows like Shark Tank, where funding decisions are made in mere minutes, are largely theater. In reality, it takes time to negotiate and close a deal that can help grow your startup. Even Shark Tank has a team of staff who comb through the financials and ask many more questions before the offers made on the program are honored.
Raising capital to grow your startup can bechallenging. Even more challenging is asking strangers for those funds. People are more willing to invest in or negotiate with people they know, like, and trust. Those qualities are tough to assess in a first meeting, especially if you're asking for money.
So, train yourself to build relationships before you need them. Not only will you increase your chances of getting funded down the road, but you'll also cultivate a group of advisers, mentors, and investors. Professionals like thesecan be a great resource for challenges and problems you face along the way.
Develop Emotional Intelligence (EQ)
Psychology Today defines EQ as “the ability to identify and manage one’s own emotions, as well as the emotions of others.” EQ is critical for startup growth for many reasons.
For one, EQ helps build and maintain healthy relationships both within and outside the company. Issues between cofounders, for example, can impact the success of a startup. According to Noam Wasserman, a professor at Harvard Business School, 65% of high-potential startups fail as a result of conflict among cofounders.
In negotiations, a keen sense of emotional intellect helps manage emotional factors that can derail conversations. A high EQ also helps promote trust and long-term partnerships.
Persistence is another reason why EQ is critical for startups. Growing a startup involves more than a healthy amount of rejection and setbacks. Many studies show that people with high EQ are better able to push through rejection and setbacks without losing focus.
Listen more than you talk
Richard Branson is a shrewd negotiator and a frequent investor in startups. One piece of advice he often gives entrepreneurs and founders is: Listen more than you talk.
Listening skills can help negotiators obtain information to use inbuilding creative deals. Likewise, training yourself to be an active listener can help you pick up on valuable details that can help you grow your startup successfully.
For example, let’s say you’re talking to an investor and that investor says: "I like your idea, but I'm concerned about X, so I'm unable to invest at this time." To the untrained ear, this may soundlike rejection, when in fact, it’s an opening. Ease the investor's concerns and you might have yourself a deal.
Don’t rush the process
As a startup founder, fastgrowth is an attractive option. However, roughly two-thirds of the fastest-growing startups end up failing, shows a joint study by the Kauffman Foundation and Inc. magazine. According to the Startup Genome Project, 70% of those startups fail because they scale up too early. The rise and fall of Crumbs Bake Shop is one example of this.
Crumbs Bake Shop, founded in 2003, was the country’s largest specialty cupcake chain. In response to a then-growing trend of interest in cupcakes, the New York-based cupcake chain chose to expand. However, the company's growth was not sustainable. Poor sales led to bankruptcy followed by a shutdown in 2017.
So, just like a skilled negotiator wouldn't rush their deliberations, startup growth needs to be scaled at a reasonable pace. Startups that pace their growth can create an environment that fosters long-term survival.
Always have a plan
Planning is paramount for success, whether you're negotiating or growing a startup. So, if you think your business is ready to go to the next level, make sure you have a growth strategy in place.
A growth strategy is a step-by-step plan of action that helps a business initiate and maintain positive expansion. Among other factors, a solid plan identifies the startup’s target audience, value proposition, business model, and key performance indicators. Startups that are trained to create and follow a growth strategy stand a better chance of managing the risk and uncertainty that comes with an expansion.