Few tasks in business are as filled with angst as negotiating about money. Whether it is a contract for a product or service you are selling or trying to get a better salary, the process can be anywhere from nerve-wracking to downright demeaning.
But it is an essential part of any business, whether you are the owner or one of its employees. At NJBIA’s recent Women Business Leaders Forum, three women business leaders offered some advice on how to approach negotiations to get the best deal you can and remove some of the anxiety as well.
Shell Bobev, founder of Disrupt the Gap, which helps women with salary negotiations and businesses to comply with equal pay laws, moderated a discussion with Dr. Sandi Webster, founder of her executive coaching firm Sandi Webster LLC, and Dorian R. Hansen, chief marketing and product officer of Investors Bank.
The hour-long discussion produced four key points that can be applied to just about any negotiation.
Know What You Are Worth
This isn’t meant to be self-analysis as much as it is a mindset.
“We have to be in a place where our worth exists independent of someone else acknowledging it,” Bobev said.
The three spoke of salary negotiations that included inappropriate comments like “it’s OK, your husband works,” and “you’re the greediest person I know.” All three panelists indicated that having a strong sense of your own value as an employee or a business person will help keep you focused on getting the best deal possible no matter what comes up during negotiations.
“I don’t walk into a negotiation about anything without a high sense of my own self-worth, because if I enter into that discussion feeling weak or not in a position of strength, it’s not going to be a good outcome,” Hansen added. “So always pay yourself what you think you’re worth.”
Prepare for the Ask
Salary and contract negotiations are not an individual event but a process, and like any process, the better you understand how it works the more likely you will get the outcome you are looking for.
Webster said she had to learn the different components of the sales process when she started her own business because she had been in the corporate world where she didn’t have to directly sell products. She said she actually had people teach her the different steps in a sales negotiation, how to overcome obstacles, and how to get past the client saying no.
“No is never a no for me,” Webster said. “It’s ‘not right now,’ but you will get my product or my service one day,” Webster said. It took a while to learn, but once she did, she said it became a game between her and her business partner. “How many times can we go in and have them say ‘no’ until they say ‘yes.’”
The same goes for salary negotiations. Webster said someone who takes a low-paying job “just to get their foot in the door” may find themselves forever underpaid because raises are often determined as a percentage of one’s current salary. Understanding how your decisions will impact your earning potential in the future is just one aspect to consider.
Bobev pointed out that corporations don’t just hand out jobs or raises, they have a process as well. Understanding where the company is in its budget cycle can help determine the best time to ask for a raise. Likewise, if a company is laying off workers, it’s probably not a good time to ask for a raise, but if people are quitting, you may have some leverage. Who are the decision-makers and what matters the most to them?
“Your preparedness is far more expansive than just salary comp,” Bobev said.
Be Willing to Walk Away
A big part of being prepared is understanding what you won’t accept. For instance, Hansen said, if you have a lot of sales leads in the pipeline, you can negotiate a contract from a position of strength, but if you’re negotiating with your only potential customer, you’re going to be inclined to accept it.
But as Webster pointed out, accepting a job that’s not a good fit or that’s going to require too much time and resources could wind up costing a business more money than it’s worth having the big brand-name client. Understanding what your business needs will go a long way in telling you when to accept a deal and when to say ‘no.’
“That’s a scary thing because sometimes you’re walking away from something and you have nothing behind you,” Hansen said. “But when one door closes another one opens. I can say I’ve never regretted turning something down because something better comes along.”
Being flexible doesn’t mean being prepared to accept but to have alternatives and options if a negotiation doesn’t go your way. If, during salary negotiations, they tell you you’re at the top of your market rate, Webster suggested looking at other ways to get the money you deserve, such as stock options.
“You have to think of all of the opportunities, of all of the ways that money is on the table and not leave it there,” Webster said.
As Bobev put it, the idea is to anticipate what could happen, then pivot when it does. She knows of a woman who was told she couldn’t get a raise because she already was earning the maximum salary for her position. “She said, ‘thank you for noticing that I’m outgrowing my position. I would love to discuss the path to a promotion,’” Bobev recounted.
Hansen recalled a point in her career where she felt stalled, but rather than getting another job, she decided to ask her employer to pay for her graduate school education.
“I got into Columbia. That was $140,000, and they paid the whole thing,” Hansen said. “And then I got another job. And I got more money.
“But I had to do that,” she added. “They didn’t come to me and say, ‘You know what, you’d be a great candidate for an executive MBA program.’”