Planning is crucial when it comes to negotiating and your location can influence the tone and outcome of a negotiation.
“The first and biggest mistake people make is just turning up and hoping it all goes well. Negotiations need a lot of thought, one of which is the strategic aspect which encompasses the ‘who, what, where and when’,” Kelland says.
“Research released a year ago by Harvard University found a material amount of value was created in the choice to move a negotiation from an office to a restaurant over lunch. They put a figure of 35% on it.”
Hudson says the physical place tends to have an influence of 10% over the outcome of the negotiation.
“For example, if you have a talk to your mum in the kitchen rather than having a serious talk in the dining room, that signals a difference and changes the impact of the discussion and it’s the same thing for small businesses,” he says.
Choosing the right location can turn a person into a competitive negotiator. Meeting someone at the office gives the process a formality, while talking at a restaurant over lunch makes a situation more casual and the people more affable and flexible.
“If you meet someone in an office it’s going to be reasonably formal. You’ve blocked out an hour and there is a deal of tension which accrues,” Kelland says.
“We recommend getting offsite, taking the meeting away from either workplace. Food is also important because you’re more convivial and open. People relax and tell each other what they actually want.”
To establish an ongoing, co-operative relationship, a less formal environment leads to better results.
“You have to decide what outcome you want to achieve. If you want to impress someone you want the negotiation to have a more formal sense about it,” Hudson says.
Just like the place, the timing of a negotiation is also critical. Hudson says business owners need to think about the times in the week when people are most approachable.
“Timing needs to be seen through the eyes of the other party. Think about if it’s the best time to have a discussion. If you want to capture people in the most cooperative time, you need to understand their industry for one thing,” Hudson says.
“An hour and a half after starting the business day people are more likely to listen and generally Tuesdays, Wednesdays and Thursdays.”
