Every day, you negotiate more than you think.

With a supplier on payment terms. With a key hire on salary and stock options. With a client on scope creep. With an investor on valuation.

If you’re an entrepreneur, negotiation isn’t a “nice-to-have soft skill”. It’s one of the few skills that directly impacts your revenue, your margins and your runway.

The problem: most founders still treat negotiation as an improvised conversation, not a process.

In this article, we’ll go through the essential negotiation skills you need to close better deals, more often, without leaving money on the table or burning relationships.

Why negotiation should be on your critical skills list

Let’s be blunt: you can have a great product and still run out of cash because you negotiated badly.

Think about the leverage points in your business:

Increase price by 5% with the same volume → direct impact on margins

Improve payment terms by 15 days → better cash flow, less need for external financing

Reduce supplier cost by 3–5% → significant annual savings, especially at scale

Negotiate clear scope and change orders → fewer overruns, more predictable delivery

All of that is negotiation.

Good negotiators don’t necessarily “win” every time. They consistently get:

Deals that are economically sound

Relationships that remain workable in the long term

Clear agreements, with fewer surprises later

Let’s break down the skills you actually need to get there.

Skill 1: Preparing like a professional, not a tourist

The biggest mistake I see with founders? They “wing it”. They read two blog posts on tactics and walk into a negotiation underprepared.

Strong negotiation starts long before you enter the room (or the Zoom). Preparation is where you create 80% of your advantage.

At a minimum, you should prepare these elements.

1. Your objectives (plural, not just price)

What is your ideal outcome?

What is your acceptable range?

What non-monetary elements matter? (timelines, exclusivity, references, volume commitments, support, IP, etc.)

Negotiations derails when you only chase “the number” and forget the rest of the deal structure.

2. Your BATNA (Best Alternative To a Negotiated Agreement)

Your BATNA is your real source of power. It answers one question: “What do I do if this deal doesn’t happen?”

Another supplier you can work with

Another candidate for the role

Another investor who is interested

The ability to delay the decision without major damage

Example: a SaaS startup negotiating with a potential enterprise client. If this client represents 60% of their projected revenue and they have no other deals in the pipeline, their BATNA is weak. The client will feel it.

On the other hand, if they already have three similar clients in late-stage talks, they can walk away from unreasonable demands. That alone changes the tone of the negotiation.

3. Their constraints and motivations

Too many entrepreneurs only know what they want; they have no idea what the other side actually needs.

Before the negotiation, map out:

What pressures are they under? (budget cycle, KPIs, internal politics, deadlines)

What does “success” look like for them?

What are they likely afraid of? (risk, career damage, vendor lock-in, failure in front of their boss)

What options do they have besides you?

Good negotiators don’t “crush” the other side. They design deals that solve the other person’s problem while still serving their own interests.

Skill 2: Framing the conversation and using anchors

In every negotiation, someone frames the discussion and sets the reference points. If it’s not you, it’s them.

Anchoring: why the first number matters

The first credible number mentioned in a negotiation acts as an anchor. Even experienced people are influenced by it, whether they like it or not.

Example:

You say: “Our monthly fee is typically between £3,000 and £4,000.”

The prospect thinks: “Okay, 3K is the low end, let’s try to get close to that.”

Now imagine you had said: “For similar clients, projects range between £4,500 and £6,000 per month, depending on scope.” The entire discussion would now revolve around a higher frame.

Practical anchoring rules for entrepreneurs

Anchor first when you know your market and have done your homework.

Use ranges to leave room for movement but keep the middle or upper part aligned with your target.

Always justify your anchor with data: benchmarks, case studies, clear value metrics.

Weak anchor: “We charge around £5,000 because that’s what we think is fair.”

Strong anchor: “Our typical clients see between £50,000–£120,000 in additional annual revenue. Our fee is usually in the £5,000–£7,000 range per month, depending on how much of the funnel we manage for you.”

Skill 3: Asking better questions and actually listening

Negotiation isn’t a pitch contest. It’s a discovery process.

If you talk 80% of the time, you’re not negotiating. You’re guessing.

High-impact question types

Open questions to understand context: “Can you walk me through how these decisions are made internally?”

Clarifying questions to get specifics: “When you say ‘too expensive’, what are you comparing us to?”

Impact questions to surface value: “What happens if this problem isn’t solved in the next six months?”

Priority questions to rank trade-offs: “Between speed, price and flexibility, what matters most for you on this project?”

Then, you shut up and listen. Not passively. Actively.

Active listening in practice

Summarise what you heard: “So if I understand correctly, your main concern is vendor lock-in, not really the price itself, right?”

Label emotions: “It sounds like you’ve had a bad experience with a previous provider.”

Check assumptions: “You mentioned budget limits; are we talking about this quarter or the full year?”

This does two things:

It gives you real information to structure a better proposal.

It builds trust, which reduces resistance when you defend your terms later.

Skill 4: Creating value instead of trading discounts

Many entrepreneurs confuse “being flexible” with “giving discounts”. That’s not negotiation; that’s margin destruction.

The goal in a negotiation is not just to split the pie. It’s to make the pie bigger, then decide how to share it.

Think in variables, not just price

List all the variables you can move during a negotiation:

Price

Payment terms

Volume / commitment duration

Scope of work or features

Service levels / response times

Implementation support

IP rights, exclusivity, references, case studies

Example: a B2B startup selling a subscription at £1,000/month.

Client: “We need a discount to sign.”

Bad reaction: “Okay, we can do it at £800.” (You just lost 20% margin for no strategic gain.)

Stronger reaction:

“If budget is the constraint, we have a few levers. We can:

Start with a reduced scope at £700 and increase over time;

Keep the £1,000 price but offer extended support in the first two months;

Maintain the full solution at £1,000, but if you commit to 12 months, we can offer a 10% discount and use your story as a public case study.”

Out of these, which better fits your priorities?”

You are protecting your price while still creating options that work for both sides.

Skill 5: Managing emotions – yours and theirs

Entrepreneurs often negotiate under pressure: low cash balance, investor deadlines, key client at risk. Emotions enter the room with you.

An unregulated ego can easily destroy a good deal.

Common emotional traps

Needing to “win”: Turning a business discussion into a personal ego battle.

Fear of losing the deal: Accepting bad terms because you emotionally overvalue this one opportunity.

Defensiveness: Taking objections or challenges as personal attacks.

Simple tools to stay in control

Preparation buffer: Decide in writing what your walk-away conditions are before the meeting. When emotions spike, you follow the plan, not your mood.

Time-outs: If the discussion heats up, suggest a break: “This is an important point. Let’s pause for 10 minutes to think it through properly.”

Reframing attacks: When you hear “Your price is unreasonable”, you reframe: “Sounds like we haven’t yet aligned on the value. Let’s go back to the impact we’re aiming for.”

Emotionally mature negotiators are calm, firm, and respectful. That’s a competitive advantage, especially when the other side is volatile.

Skill 6: Dealing with power imbalances (big client, big investor, big supplier)

At some point, you’ll negotiate with someone who seems to have all the power: a major corporate, a top-tier VC, a dominant supplier.

The risk: you behave like a beggar, not a business partner.

How to rebalance when you’re the “small one”

Strengthen your BATNA: Talk to multiple potential partners in parallel. Even if they’re not as “sexy”, they give you options.

Shift the conversation to value, not size: “We’re small, which means you get direct access to the founding team, faster decisions, and customisation your larger vendors won’t offer.”

Protect your red lines: Non-negotiables on IP, unreasonable liability, abusive payment terms (e.g., 120 days) can quietly kill your business.

Example: a startup asked to sign a distribution deal with a global player. The contract included a clause giving the distributor full control over pricing and the right to terminate with 30 days’ notice.

On paper, the brand association was tempting. In reality, the startup would have been trapped in a dependent position with no pricing power.

Good negotiators know when a “big opportunity” is too expensive in strategic terms, even if the revenue looks attractive.

Skill 7: Closing the deal and locking the details

Many negotiations fail not on substance, but on execution. Everyone “agreed in principle”, then the contract phase becomes a mess.

Recap clearly, in writing

At the end of a positive meeting, don’t just say “Sounds good”. You systematically recap:

The key points agreed (price, scope, timelines, responsibilities)

The remaining open questions

The next concrete steps and deadlines

Who does what, by when

A simple follow-up email like this avoids 80% of “I thought we had agreed on…” later:

“As discussed today, here is my understanding of where we landed:

Scope: […]

Pricing & terms: […]

Timeline: […]

Next steps: I’ll send a revised proposal by Friday; you’ll review it internally and get back to me by Wednesday next week.

Let me know if I missed or misrepresented anything.”

Distinguish between “agreement” and “signature”

Entrepreneurs often celebrate too early. Until the contract is signed (or the PO is sent), you do not have a deal.

Make it easy to move from “yes” to “signed”:

Use standard contracts whenever possible.

Avoid unnecessary legal jargon that triggers extra review.

Suggest a clear timeline: “If we can finalise the agreement this week, we’ll start implementation on the 1st.”

Offer to jump on a quick call with their legal or finance teams to remove blockers.

Skill 8: Learning from every negotiation

Negotiation is not a one-time talent. It’s a skill you refine with every deal, if you treat it as such.

After-action review: 10-minute habit

After each significant negotiation (won or lost), ask yourself:

What went well?

Where did I lose control or clarity?

What information did I lack going in?

What tactics or questions worked best?

Which red lines did I hold? Which did I abandon? Why?

Capture this in a simple document you revisit regularly. Over 6–12 months, you’ll see patterns in your behaviour and in your market.

Build your own negotiation playbook

Instead of reinventing the wheel each time, formalise:

Standard ranges for pricing and discounts

Default responses to common objections

Templates for recap emails and proposals

Lists of tradeable variables beyond price

Your non-negotiable clauses in contracts

This doesn’t make you rigid. It gives you a solid base from which you can adapt with intention, not improvisation.

Common mistakes entrepreneurs must avoid

To finish, let’s be explicit about a few traps that quietly destroy value in deals.

Neglecting preparation – Walking into key negotiations without clear objectives, no BATNA, and no understanding of the other side’s constraints.

Negotiating only on price – Ignoring all the other variables that could create value and protect your margins.

Overpromising to “win” the deal – Accepting unrealistic deadlines, scope or SLAs just to sign, then paying the price in delivery, churn and reputation.

Taking things personally – Confusing criticism of the offer with criticism of your worth as a founder.

Failing to document agreements – Leaving key points in verbal limbo, then arguing about “who said what” later.

Being inconsistent – Giving radically different deals to similar clients without a clear strategy, creating distrust and internal chaos.

Turning negotiation into a competitive advantage

You don’t need to become a manipulative “closer”. You need to become a clear, prepared, emotionally stable business partner who knows how to design deals that work.

If you apply just a few of the principles above in your next negotiation:

Do real prep, including your BATNA

Anchor confidently and justify your numbers with value

Ask better questions and listen strategically

Trade smartly on multiple variables instead of discounting by default

Recap agreements clearly and drive the process to signature

…you will already be ahead of 80% of founders out there.

In a market where capital is more expensive, clients are more demanding and margins are under pressure, being “good enough” at negotiation is no longer sufficient.

Treat it like any other core business skill: study it, practice it deliberately, and build your own playbook. The compounding effect on your deals, your cash and your growth will surprise you.