Pitching and Negotiation Skills
The involvement of two or more parties while settling an issue or difference is known as negotiating. This is a process that mainly comprises of a compromise or an agreement between two parties while avoiding any conflicts, arguments, or disputes. Moreover, there are certain forms of negotiation which are used in specific situations like, international affairs; legal system, governmental issues, industrial disputes, international relationships, and domestic relationships are such examples where negotiation is mostly used. A company needs to learn the art of negotiation. Learning the skills of general negotiation and applying them in the activities of the company is of crucial importance according to Bocken and Short (2016). Negotiation skills are of great benefit in solving issues or differences between the company and others. It helps the company maintain a good image in the market.
Moreover, the most important factor while establishing a successful business is the involvement of the stakeholder. Besides, the stakeholder of the company is part of the internal negotiation system. However, stakeholders don’t need to consist of the internal workforce of the company in the words of Antikainen and Valkokari (2016). Identifying the key stakeholder of a business, the stakeholders can be from the company’s internal legal department, sales team, products team, senior management, and others. Besides, the company’s internal stakeholders are important for the benefit of the company. It is because the internal workforce can recognize their role in the company and also think about the growth of the company rather than individual self-interest (Lieder, Asif and Rashid 2017).
According to Teece (2018), the process of negotiation can be achieved by four major stages. The four major stages include the preparation process, the opening process, the bargaining process, and the closure.
The Preparation Process
The preparation for the process of negotiation leads to a successful business deal. Being well prepared gives the negotiator a boost in confidence and also provides him with the upper hand in the competitive market (Visnjic, Wiengarten and Neely 2016). However, the preparation process could be classified into seven different sub-steps, which are, gathering of information, leveraging the evaluation, understanding the involved people, building rapport, knowing the objective, considering the type of negotiation, and finally the plan of action.
The Opening Process
This is the second phase where both the involved parties face each other. Each of the parties tries to make an impression on one another. This process also involves the parties gaining leverage on one another and influences each other’s thinking (Hacklin, Björkdahl and Wallin 2018).
The bargaining process is the third process where both parties come a bit closer to the objectives which they want to achieve. The basic strategy in this phase is to influence each other by giving the appropriate reason for the demands and also convince each other to go forward with the demands. However, the reason mentioned should be appropriate while bargaining according to Clinton and Whisnant (2019).
This is the final phase of the negotiating process. The closure phase means that both of the parties have agreed on the terms in the before-mentioned processes as per Armstrong et al. (2015). The research of the preparation process along with the other processes concludes in this phase.
Negotiation is a process that requires the interaction of every individual in the group or the organization. However, considering the unstructured functions of any organization, the process of negotiation is very critical in the words of Bendle et al. (2016). The process of negotiation is classified into five major steps. These five steps give the real meaning of a negotiation, which are as follows,
A well-planned negotiation leads to growth in the business. In this step, the organization needs to research, analyze, and also physically inspect the market. They should consider the trends of the market and also what are the requirements of the company while engaging with others. The company should constantly monitor the other party, look into their history, and also into their resources before going into a process of negotiation (Bryman and Bell 2015).
Defining the Ground Rules
Both parties need to understand the ground rules of the negotiation. Ground rules are the basic terms that both parties have to maintain while negotiating.
Both parties need to justify each other’s requirements by giving an appropriate reason for utilizing the resources. Justifying the requirement, beforehand, results in a good relationship (Jindal et al. 2018). However, both parties need to understand that if they cannot provide appropriate reasons the business deal might end.
While negotiating, there might be instances where a problem might arrive. Both parties should be well aware of the problem and should come to a common ground to eliminate the problem as opined by Khan (2014).
This is the phase step where the mutual decision taken by both of the parties is implemented. As mentioned earlier, this step is the final step when it comes to the process of negotiation. This phase also determines the relationship that both parties will have in the future (Lovelock and Patterson 2015).
The process of negotiation is complex. It involves the minds of many individuals. The process needs to have detailed research about the other party and also gaining an insight into the needs. Various risk factors come into play while negotiating. There are certain cases when a company lost a good business deal due to bad research and incorrect data. This is of crucial importance to consider the importance and the need for correct data (McKeever 2016).
However, there is another factor that poses a risk for the negotiation process is aiming high. Aiming high never leads to a successful negotiation. It only gives the company hope to gain the trust of the other party. The negotiator needs to understand the requirement of resources as well as the demand for information before going into the negotiation. Also, if a company is engaging with a vendor or supplier, it needs to have clarity in the term it is going to provide according to Pavlou and Stewart (2015). Management of vendor or supplier is another risk that threatens the process of negotiation. Any company engaging with a vendor should always have the ground rules clear, if the vendor is unable to deliver, the terms for loss should also be made clear beforehand.
Request for Proposal or RFP is a document that seeks the proposal between two parties. An RFP involves the process of bidding by two or more parties who are interested in a common goal. This common goal may include the attainment of a commodity, service, and valuable assets. The proposal leads to the submission of a business proposal by the vendor or supplier for providing the services the company requires. Moreover, an RFP includes more information than the cost as per Rahmani, Emamisaleh and Yadegari (2015). Apart from the plan of action, an RFP includes the basic details of the corporation, a brief history, financial declaration, technical capacity, and others. However, the financial declaration and the information on technical capacity are of crucial importance in an RFP.
However, while writing an RFP there are certain elements and documentation that need to be attached to it. The overview of the project is one such element that provides an idea about the RFP and what follows with it. This is a summary of the entire proposal. Secondly, the proposal of guidelines provides the details of the terms and instruction that needs to follow while the negotiation is in order between two parties. Thirdly, the proposal needs to give a detailed purpose of the RFP. Providing details of the requirements and the description of the project is of crucial importance in the words of Massa, Tucci and Afuah (2017). Lastly, the proposal needs to include a scope of deliverables that both parties intend to achieve.
The contractual agreement process helps the business organization to gain the desired outcome from the negotiation process. There are major steps that need to be taken into consideration while going through the contractual agreement process. These steps include the assurance of a well-researched proposal and also provide a detailed analysis of the legal end of the negotiation. Furthermore, the contractual agreement process also includes the details about the manpower that will engage in pursuing the desired outcome of the business deal as per Linder and Williander (2017).
Moreover, it is of grave importance to understand the scope of the desired business proposal so that both parties can identify the need for contracts and also the documents required along with it to maintain a good relationship with each other. If any of the parties fail to comprehend the contract, it is of crucial importance to deliver the client with proper justification and alternate means to achieve the desired target. Besides, a successful contractual agreement process needs to be discussed and revised before completion. It should also include details about the necessary documents required for both parties to present in front of each other while negotiating in the words of Bocken et al. (2016).
When it comes to applying the Request for Proposal process in an organization, the organization needs to draft the proposal while keeping the basic requirements and the cost in their mind. An effective RFP leads the company to efficient growth in business. The organization needs to mention the particulars of the proposed work, the requirements, the scope of the proposal, the deadline, and also the term and conditions of the vendor fails to deliver. An RFP delivers both the organization and the vendor with an equal platform while avoiding any kind of corruption or favouritism (Geissdoerfer, Vladimirova and Evans 2018). However, there is a different step of the RFP process when it comes to applying it in an organization, which is as follows:
Request for Information
If the company feels necessary to share or demand certain information about the company or the vendor, it might seek a request for information.
Determining the Requirements
Determining the requirements is a key component of a successful business deal.
Writing the draft of the RFP
It is very important to draft the RFP in a detailed manner. It provides clarity and transparency among the organization and the vendor.
Identifying the key individuals
Identification of the manpower is very much needed for achieving the desired target.
Mentioning a deadline after the complete analysis of the project helps the organization to keep the pressure on the vendor.
The organization has to make its vendor understand the consequences if they fail to deliver the desired target in the mentioned timeline. An RFP provides a detailed summary of the consequences the vendor will face if failed to deliver (Evans 2017). Moreover, an RFP provides the organization with an upper hand on the vendor while keeping them under pressure.
A tender is a documentation submission process that is made between a supplier or vendor and a company that needs services or components. It makes an offer in return for the supply of goods or services. However, a tender invitation can be made between multiple suppliers or vendors with a range of contract processes which includes the supply of pieces of equipment, particular services, designs, and many more (Foss and Saebi 2018). In this process, the vendor or supplier which is shortlisted by the company needs to submit proper documentation which should include a history of the organization, relevant experience the field, understanding of the requirements, proposal of the work, particulars of the essential resources that the vendor needs, technical skills, a budget for the tender or contract, proposed methodology and the details about the compliance. The proposed methodology should consist of the plan of action, proposal of designs, and other key elements needed to achieve the desired target (Geissdoerfer, Savaget and Evans 2017).
Strategically, company companies and organizations have to manage organizational disputes in growing areas of production. In particular, it is natural for any successful business and company to enter into a dispute due to numerous problems and proposals that may occur in solving different situations and also business ideas as well as opportunities. Implicitly, the agreement itself may be alluded to as a mechanism for the multiple business parties to arrive at an acceptable agreement that will enable a solution to the issue that both parties embrace according to Bocken and Short (2016). This may be to resolve a competing issue inside the business management of the parties.
The organization’s partners will be various branches, coffee shops, coffee drinkers, shop customers, businesses, yelp (for providing the customers with the location details) distributors, and other sponsors.
Conducting market research to improve services. This specific business is targeted at customers who love drinking coffee and going out. It would cause consumer issues of sitting and conversing over coffee to decrease. Revenue sources are the income that the services produce. There should be a two-sided acquisition between the coffee shop and the consumers. Marketing activities should be taken under consideration, the segment the expertise and manage channels.
The coffee shop will help customers have coffee and refreshments over the conversation. Customers won’t have to struggle for a decent place to chitchat. Besides, the customers will be offered guaranteed seating arrangements. Besides this, it would also increase the brand’s customer loyalty, as the company is expanded.
The relationship manager of the coffee shop should be managing the customers’ requests and feedbacks. In-store promotion would be done through social media updates and the company will also provide free Wi-Fi to lure tech-savvy customers.
Individuals particularly belonging to the group of 15-25 ages will also be targeted for the promotion of this company’s expansion. Coffee lovers, students, freelancers, professionals, workaholics will be targeted.
Using brand new and creative technology will help the business grow and produce more income. Financing, design, business relationships are additional resources.
Social media channels and B2B businesses use. Using electronic, print, and web media would also be done to attract the customers’ attention. Industry coffee magazines, coffee shops, and universities are additional channels.
The company will promote its commodity in all parts of the country. Major expenditures must also be made for paid advertising.
Research as well as development.
Employees’ benefits and compensation.
Manufacturing and production.
Infrastructure as well as technology.
Facilities, marketing, and distribution.
Service fees and equipment sales.
Contracts and orders.
Pitching of Business Structure
As created by Author
Research and Development
Understanding the future investor makes the chances of success even greater. The pitch for investors is mostly about building confidence. Conducting proper market research is important and it is essential to understand the specifications of the investors. It is important to make the investor understand why the company would be a good partner for them. Using specifications to demonstrate is important so that the investors will buy into the team, the company, and the strategy according to Armstrong et al. (2015).
Concrete organizational goals
Although there is an extensive number of preconditions and requirements, it is indeed imperative to push the company forward with four or five primary objectives. Before meeting the investors, it is imperative to have a good idea about where the company should be after expansion, how investors should get interested, and when the company owner would be ready for production in the words of Bendle et al. (2016). Thinking about how the meeting of investors would be a win for the company is essential, even if the investment response is negative. The advice or link the investor gives will advance the venture.
Off-stage pitch and experience
Gaining awareness across the offerings of the company are crucial. While investors are the top priority, it is equally beneficial to build hype amongst these attendees via unique hammering or demonstrations on social media platforms. According to Bryman and Bell (2015), being friendly is an important aspect while pitching a business.
Knowing the business
Providing a comprehensive understanding of the main factors of the company, the core clients, what the team is focusing on as well as how the investment will be directly used is necessary. It is important to remain honest and thoughtful about the business and that is where the research or preparation comes as per Finch (2016).
Media list as well as the introduction
The lists of media are a perfect way to organize possible future press connections. Being aware of the main influencers and being introduced at the event could even lead to beneficial mentoring as well as future connections. Competitors can be viewed as the ones providing exposure that is needed to push the business into the limelight in the words of Jindal et al. (2018). The next ideal result to get support is publicity and a chance to tell the story far beyond the point.
The potential outcomes of the business pitch are described in this part of the report as follows;
Maximizing the opportunity
That is why it is so important to be prepared since a person never knows when a pitching opportunity may present itself. It also demonstrates a speaker could think on the feet rapidly, an ability every successful entrepreneur requires. As per Khan (2014), an effective business pitch would help the entrepreneur maximize business expansion opportunities.
Grabbing the attention of the audience
A successful business pitch would help the entrepreneur grab the attention of the customers and leave them wanting to know in detail about the business. However, it is important for the business owner to not bore them with all the technical details concerning the business products or services in the words of Lovelock and Patterson (2015). They should increase their level of interest by pointing to the clients individually and asking them for the upcoming appointment.
Telling a story
A potential outcome of the pitching involves telling a story to the clients to involve them as much as possible as per McKeever (2016). The successful pitches are those that start with a convincing story about a consumer using a particular product or service of the company, and how it benefitted them (i.e. saving them time, resources, or maybe saved their lives).
Passion for business
Stage fright should never be an obstacle while pitching for business. A weak business pitch can lead to negative results as per Pavlou and Stewart (2015). Most of the time, entrepreneurs end up disappointing the clients by getting nervous and forgetting everything, while pitching a business. However, it is important to do proper market research before getting on board. Entrepreneurs should express effectively their enthusiasm for the market potential as well as product.
Communication with confidence
If the entrepreneur delivers his/her pitch and his/her honesty doesn’t come through, he/she cannot expect the business to grow to the customers with confidence. It is important to not be afraid to share the belief in the product as well as market opportunities in the words of Rahmani, Emamisaleh and Yadegari (2015).
Sharing the personality
The more stakeholders like the entrepreneur, the more they will want to defend and trust the entrepreneur in the pitch. However, to make this possible, he/she needs to let him/her shine through. It is indeed hard to know what the public persona of someone is when users read a piece of article, so it is necessary to make sure to show the personality while delivering a business pitch. That comes with an excellent deal of practice (Massa, Tucci and Afuah 2017).
To keep the investors interested post-pitch and reduce the potential issues, it is important to consider certain steps, which are discussed as follows;
Keeping the investors updated
Being sure to keep these investors updated after the meeting is important, but one should not follow them. Let them learn about the method, like meetings for two weeks, and then making decisions, and trying to gain control in the partnership. The more they will have to chase the entrepreneur, the more probable he/she is to collect money (Linder and Williander 2017).
Understanding the doubts and addressing them
By demonstrating that the entrepreneur is aware of the investors’ questions and working to resolve them, he/she is displaying the willingness to listen and to change the tactics to match their needs (Bocken et al. 2016). If they witness progress in areas where they have doubts, the investors will be more prepared to work with the entrepreneur and confide in his/her organizational vision.
Track and forecast
Stress a crucial market metric as well as the near-term outlook to keep the dialogue opens to investors after the initial pitch. Being sure to evaluate how the company performs to the main metric forecasted in follow-up communication is imperative (Geissdoerfer, Vladimirova and Evans 2018). Not only does this give customers something to looking forward to, but it will also demonstrate how the owner is implementing the strategy.
Discussing with the investors by seeking ways can truly benefit them. Potential investors certainly would not expect this kind of action and it promotes an even stronger bond than if the entrepreneur just follows up to hunt the latter for investment into the business (Christensen, Bartman and Van Bever 2016). Before requesting a person to invest in the business, it is important to make a supporting opportunity to prove to them that they deserve to invest in the business.
Determining the next step
It is imperative to always determine the next step for keeping the conversation ongoing. The entrepreneur can also ask the investors regarding the next steps, as it would make them a special part of the business. Moreover, they would feel special and gladly accept the deals presented by the entrepreneur. Most importantly, as per Evans et al. (2017), it would help him/her to seek financial help and keep up the momentum until the term sheet is delivered.
It is indeed exciting to start a company as well as a very risky endeavour. The possibilities are gigantic, and so are the challenges. For this reason, business owners should evaluate the greatest risks they could face and develop operational strategies to prevent their impact. The four biggest hurdles for a new business are the market fit, product, financial risks, and execution. The entrepreneur’s capacity to handle risk efficiently dictates the business’ growth more or less (Kavadias, Ladas and Loch 2016). Developing an effective risk management plan is important, that is why addressing the top components to be used when developing it is as follows;
Risk detection is the primary and the most critical factor to decide when a risk management plan is developed. A clear analysis of future issues helps the management team to develop an appropriate plan of action. The three major questions of “what will happen”, “how it might happen” and what would be the worst outcome”, should be answered. The risk management process is of vital importance, which provides the decision-makers in startup management with quality information (Foss and Saebi 2018).
It is hard to quantify risk, but designing a plan for handling anything, which cannot be or is not properly calculated, is even daunting. The businessmen should focus on adopting methodologies that are most appropriate for evaluating their business environment. Assessing the probability of a future situation occurring and estimating the possible extent of its incidence are major elements of any risk management plan (Clauss 2017).
Risk management is very useful as it provides data regarding the plan’s implementation and efficacy, and provides a clear overview of how the threat has evolved or progressively increased (Geissdoerfer, Savaget and Evans 2017). Through tracking and reviewing the approach, the entrepreneur will be able to obtain deeper insights into their job, which will help him/her follow an efficient strategy that suits the company’s aims and unique circumstances.
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