No two business negotiations are ever the same. Because goals, timelines, stakes, and temperaments influence how a negotiation plays out, it’s vital to choose the right strategy for your situation.
This guide outlines the four steps of the negotiation process and presents strategies and tactics to consider as you prepare for your next time at the bargaining table.
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What Is Negotiation?
A negotiation is a discussion to resolve an issue in a way that all parties accept. Since everyone approaches the conversation with their own motives and objectives, most negotiations don’t end with all parties getting their ideal outcome.
To be a good negotiator, you must simultaneously create and claim value to get what you want while ensuring your counterpart also feels satisfied.
You likely regularly engage in negotiations of varying degrees of formality. In business, negotiation can take the form of:
Discussing costs and conditions with suppliers and vendors
Closing a sale, acquisition, or other business deal
Asking for a promotion or salary increase
Determining job offer and salary terms
Requesting budget allocation for a project
Steps of Negotiation in Business
Before choosing strategies and tactics, it’s important to understand the four steps of the negotiation process: preparation, bargaining, closing, and learning.
1. Preparation
All successful negotiations begin with preparation. This is where you seek to understand your position and define your:
Best alternative to a negotiated agreement (BATNA): Your ideal course of action if an agreement isn’t possible
Walkaway: The line where ending the negotiation is better than making a bad deal
Stretch goal: The best-case scenario for the negotiation’s outcome
Once you’ve defined those, consider your counterpart’s perspective and priorities. What might their walkaway or BATNA be? By doing so, you can set yourself up to strategize appropriately and make emotionally intelligent choices.
Additionally, determine your approach based on your and your counterpart’s expected motivations and goals. The strategies you choose should shift with the situation, but it’s important to consider them in advance.
2. Bargaining
The bargaining stage, or the discussion, is what most people think of as negotiation. This is the point in the process where you discuss terms with your counterpart. It often involves a give-and-take, where you make concessions while requesting others in return.
Bargaining requires finding the zone of possible agreement (ZOPA)—the range in which two or more parties can find common ground—and working within it to claim the value needed to make the negotiation worthwhile.
3. Closing
Closing a negotiation can mean coming to an agreement or ending without reaching one. How a negotiation closes depends on each person’s motivations, requirements, and goals, as well as your relationship throughout the discussion.
If a negotiation closes without agreement, you might decide to revisit it later or pursue your BATNA.
4. Reflect on the Experience
Finally, reflect on the experience. Notice what went well, what didn’t, and what you’d try differently next time. This final step can help identify your strengths and weaknesses as a negotiator so you can sharpen and strengthen your skills.
To learn more about the skills needed to negotiate successfully, check out the video below and subscribe to our YouTube channel for more explainer content!
As a business professional, it’s almost guaranteed you’ll be required to participate in negotiations from time to time, regardless of your job title or industry. Here are three essential skills for mastering the art of negotiation.
4 Business Negotiation Strategies to Consider
As a business professional, you'll inevitably face a negotiation, regardless of your job title or industry. Here are four strategies for mastering the art of negotiation.
1. Define the Interaction by Showing Your Cards
Whether you strategize for it or not, how you approach a negotiation defines its nature and can set you up for success or failure.
In the online course Negotiation Mastery, Harvard Business School Professor Michael Wheeler explains that you “negotiate how to negotiate”—defining the interaction’s “who,” “what,” and “how” simultaneously.
“It’s about identity, roles, and relationships,” Wheeler says in Negotiation Mastery. “Social psychologists and neuroscientists have demonstrated that we form judgments of other people ultra-fast, just as they do of us. On a visceral level, we label someone as a friend or foe.”
Plan how you want the interaction—and yourself—to be perceived. One strategy is to present the negotiation as a chance to solve a problem together. Related to this strategy is showing your cards: revealing your motivations and goals to your counterpart to an appropriate extent.
While many hide their cards to avoid being in vulnerable positions, Wheeler suggests in Negotiation Mastery that you share your goals in a way that prompts your counterpart to reveal theirs, too. This can build trust and yield a shared goal of creating value.
2. Make the First Offer, and Aim High
Deciding whether to make the first offer is critical. Contrary to popular belief, making the first offer isn’t a sign of weakness; it sets the stage for the rest of the conversation and gives you the power to define the range of possibilities.
As outlined in Negotiation Mastery, the higher your aspirations, the more value you’re likely to get—but it’s also more probable you’ll walk away empty-handed. When making an opening offer, aim high to set the stage for bargaining, but not so high that your counterpart ends the discussion. Consider their goals, and ensure your initial offer provides value for them, too.
The downside to making the first offer is that your counterpart may have been planning to make an even higher one—in which case you’d limit yourself. Or they may be so taken aback by your request that they end the negotiation before it’s even begun.
“Because anchors are so important in negotiation, I'd argue that when you have a pretty good idea of what the zone of possible agreement looks like, you want to be the first to put a number on the table,” says HBS Professor Max Bazerman in Negotiation Mastery. “And you want to put the number at your preferred end of the ZOPA. However, when you have no idea what the ZOPA is, you need to learn at the negotiation table.”
3. Don’t Raise Demands
During a negotiation, it can be tempting to start with a request that's smaller or less demanding than your ultimate goal, which you believe your counterpart is more willing to accept. Once they’ve agreed to this smaller ask, you revisit it later and renegotiate it to be closer to your actual target. Over time, this approach can push your counterpart to make multiple "small" concessions they might never accept as a single "large" one.
While this strategy can work, it doesn’t come without risk. If you use this approach often, your counterpart may catch on and lose trust that your requests are final. They may not agree to even the smallest asks, knowing that you’ve raised demands in the past. It may lead them to believe you’re working toward a mutually beneficial solution, only to reverse course with additional requests.
Successful negotiations are typically built on trust and mutual respect, and repeatedly raising demands after your counterpart has made concessions is a surefire way of destroying that. While it can work as a tactic, it can also backfire, so it’s important to consider the repercussions before embracing it.
4. End the Discussion Genuinely
If you aim to build a relationship with your counterpart, end the negotiation genuinely. Some negotiators reach an agreement and then double back—for instance, saying they need to ask their manager for approval, then giving an ultimatum demanding more.
While this bait-and-switch approach may earn you more value, it can also cause your counterpart to walk away if they can’t meet the added demand. Furthermore, if you want to build trust and foresee needing to negotiate or work with them in the future, being deceitful will erode your rapport.
Closing genuinely can also lead to more fruitful bargaining. If you know you won’t end negotiations until you feel comfortable with their outcomes, you’re more likely to have conversations that result in successful deals.
Other Negotiation Tactics and Advice
Depending on the situation, the strategies outlined above may or may not help you meet your specific negotiation goals. Other tactics and general advice to consider include:
1. Keep an Open Mind
Attitude is everything in a negotiation. Go in with an open mind and be prepared to adapt.
In his book, The Art of Negotiation: How to Improvise Agreement in a Chaotic World, Wheeler says, “Adaptability is imperative in negotiation from start to finish. Opportunities will pop up. So will obstacles. Power ebbs and flows. Talks that crawl along can race forward or veer off in another direction. Even our own objectives may evolve. We have to make the best of whatever unfolds.”
2. Turn Anxiety into Excitement
Approaching a negotiation can be stressful, but keeping your cool is key. Research by HBS Professor Alison Wood-Brooks offers insight into managing negotiation anxiety.
"Try your utmost to avoid feeling anxious while negotiating,” Wood-Brooks writes in the Harvard Business Review. “How can you manage that? Train, practice, rehearse, and keep sharpening your negotiating skills. Anxiety is often a response to novel stimuli, so the more familiar the stimuli, the more comfortable and the less anxious you will feel.”
Wood-Brooks advises how to turn jitters into opportunity. In an interview with The Atlantic, she describes research where she and her colleagues gave participants a difficult assignment: to sing Journey's “Don’t Stop Believin’” in front of a group. Before they sang, participants were told to say either “I’m nervous” or “I’m excited.” Research shows that reframing anxiety as excitement can improve performance.
While this example is lighthearted, reframing anxiety as excitement may help you maintain composure.
3. Project Power
How you carry yourself matters in negotiations. Ensure your body language projects confidence and power.
Joe Navarro, former special agent with the FBI and author of Louder Than Words: Take Your Career from Average to Exceptional with the Hidden Power of Nonverbal Intelligence, is an expert in how body language can propel your career. In a Forbes article, Navarro shares this tip: “Stand with your head slightly tilted and your hands clasped, and with a smile and a gaze that meets the other person’s. The head tilt exposes the neck and says, ‘I am listening, I am comfortable, I am receptive.’ By contrast, if you touch your neck or cover the dimple at the base of it, you’re saying you are uncomfortable, insecure, or concerned.”
By paying attention to your facial expressions, eye contact, posture, and even hand gestures, you can heighten your chances of success.
4. Take a Timeout
Knowing when to take a break can be a powerful tool. Not only will it give you time to collect yourself, but it can shift the dynamic. This technique is often used by athletes when things aren’t going their way.
“It works like a reset button,” Wheeler says in his book, The Art of Negotiation: How to Improvise Agreement in a Chaotic World, “interrupting whatever dysfunctional pattern has emerged. Remember to take a break before you actually need it, so that you’re constantly performing at the highest level.”
5. Silence Can Be Golden
If you can’t physically leave the room, at least take deep breaths. Pausing can help you achieve a better outcome. It gives you time to absorb, digest, and carefully consider your response, and may create discomfort on the other side, which could lead to a better deal.
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Sharpening Your Negotiation Skills
The strategies you employ depend on your specific situation. If the other party is someone you’re likely to negotiate with again, choose tactics that support trust to maintain a working relationship. If your negotiation is a one-off occurrence, perhaps go with a bolder, riskier strategy.
Thoughtful preparation and the ability to improvise are critical to negotiating successfully. To gain the skills needed to select strategies and navigate unpredictability, consider taking an online negotiation course.
With practice and the right tools, you can approach negotiations with confidence and close deals successfully.
Are you ready to improve your negotiation skills and advance your career? Explore Negotiation Mastery—one of our online leadership and management and entrepreneurship and innovation courses—and download our free leadership e-book.
This post was updated on April 7, 2026. It was originally published on June 15, 2023.