Ten Rules for Negotiating a Partnership

There’s a reason people call it “the art of negotiation.” Achieving a win-win requires that both parties are motivated to create value while realizing that value requires hard work. This includes:

• Effective listening
• Persuasion
• Attention to detail
• Planning and compromise

Here are 10 rules that negotiators should keep in mind for effective deal-making.

1. Pay attention to partnership chemistry. If negotiations feel hard or contentious at the outset, the partnership will likely not feel easier after you manage to get the deal signed. Conversely, if a lot of goodwill and cooperation is felt from the start, a self-sustaining partnership is likely to result.
2. The whole must be greater than the sum of its parts. A good partnership creates more value than each company can deliver alone – because zero-sum negotiating does not lead to long-standing partnerships. Truly understand how both parties win and how 1+1 can equal 3; these are the partnerships that endure.
3. Know your story and your principles. A principled approach will firmly guide what you are willing to compromise on and what you are not willing to compromise on. Know your own “must haves” and “deal breakers” before you enter into partnership dialogue, and stick to your company’s principles.
4. It is okay to walk away. The most valuable negotiating tool is a credible threat to walk away. Many a deal gets closed after one or the other party has left the negotiating table at least once. Also, sometimes the best deal decision is to pass on the deal. Avoid getting so attached that you compromise your business principles for the sake of a signature.
5. A good deal is more than just economics. Don’t overlook the need to define the user experience and implementation details – and agree on these explicitly upfront. Good partnerships hinge on more than just revenue sharing terms.
6. Just say no to exclusivities. A strong-performing partnership should result in natural exclusivity because both parties realize significant value and don’t want to go elsewhere. A contract exclusivity that bars a partner from maximizing their commercial opportunity is not a good recipe for a long-term partnership. Avoid them whenever possible.
7. Don’t jump the gun on involving legal. Negotiate business terms and outline them in a term sheet before introducing lawyers into the mix. This saves valuable time, money, and goodwill. If the business folks agree on the commercial principles, the lawyers can handle the risk-sharing aspects of the deal.
8. Book the flight. There is huge value in in-person human-to-human connection in today’s world – sitting across a dinner table from your negotiating partner really does help close the deal and builds rapport for the next stage of implementing a partnership.
9. Show your humanity. Put yourself in your negotiating partner’s shoes…especially if you’re the bigger entity. Scorched-earth negotiating is rarely rewarded in the long run.
10. Don’t just celebrate…advocate. When the deal is inked, make sure everyone at the company understands the value of the partnership, because having multiple stakeholders invested on both sides is key to successful implementation.

In the world of business, successful negotiations are about more than just closing a deal; they’re about building lasting, value-driven partnerships. Armed with these insights, you are now prepared to navigate the complexities of deal-making with confidence and clarity. Embrace the journey of negotiation with an open mind and a collaborative spirit, and watch as your partnerships flourish.

Jessica Steel, president of UrbanSitter, has more than 25 years of business development experience at UrbanSitter, Pandora, and Overture Services, and has negotiated hundreds of strategic partnerships with the likes of Microsoft, Verizon, AT&T, GM, Ford, Samsung, and Google.