The International Entrepreneur: Ready for your First International Negotiations?
You have engaged with your first potential overseas partner or large client. Both of you want to do business and you will be starting negotiations soon. But aren’t negotiations the same around the world? …Definitely not. Particularly those used to the American negotiation style will do very poorly trying to make that style work negotiating with other cultures.
Prepare, Prepare, and then Prepare More
My fellow Americans typically come to the negotiations table with minimal preparation. This is a BIG mistake. The other side will know a great deal about your company, your product, and each member of your negotiating team in order to find advantage. They will have planned a detailed strategy. Do your homework so that your team is not coming in at a disadvantage. Your own negotiations strategy should include the boundaries of what you can afford to offer and what you can accept, plans for how to deal with common negotiation techniques from your counterpart’s culture, alternatives you can offer as part of the deal to counteroffer anything the other side wants and you are unable to give, everyone’s specific role on your negotiation team, and background information about the other side. Do all that and you will be prepared!
Location, Location, Location
Where will your negotiations be held? Your offices? The offices of your counterpart? Offsite? At a location in a neutral country? Most would say that they hold advantage if negotiations are held in their own offices. This is true for controlling the environment – schedule, food, breaks, temperature, level of overall comfort, etc. But there are advantages to visiting the other side’s location – seeing how they work and learning more about their operations. In some cases, it may be optimal to hold series of negotiation talks that rotate between the two company locations. That way both sides can learn about their counterpart. Whatever you decide, please understand that this is an important decision that can affect the outcome of the negotiations.
Whatever your time frame is for completely negotiations, it is probably too short by at least half. International negotiations take time. I once received an excellent piece of advice for a seasoned negotiator who had negotiated many agreements between Western and Asian companies (and governments). She said to never communicate a specific time/date of your return flight. Always leave this open because there may need to be a period of time when both sides are getting to know each other before negotiations even being. Often if a Western team is in Asia for negotiations there may be several days of local site seeing before negotiations even begin. If there is a specific return date, the other side will take advantage of this to stall up until right before the flight and then ask for large concessions in order to close the deal. Plan on spending a few weeks in-country during negotiations. Likewise, play tour guide to your visiting negotiation team if you are hosting at your offices.