The art of negotiating a business deal is not trying to persuade the other side to believe your views, but make your views worthwhile to them. Also, and this is an important part, understanding the other sides problems. With that said you all are wondering what exactly I mean by that. Let me explain.

Even the best negotiators in the world make these very simple mistakes. How do these well established, smart, and experienced business men and women make mistakes you ask? Well, it usually comes down to pressure. These mistakes can lead to money left on the table, things getting out of control and going downhill, which then could possibly lead to damaged business relationships.

So what is one mistake people make when trying to negotiate a deal? Forgetting about what position the other side is in. Remember, you need to understand their situation as best you can. Knowing what you need out of the deal is not enough; you must understand the other side and do the best you can to put yourself in their shoes. This is the first vital mistake companies make when negotiating.

Now let's give an example:

Okay, so you're a brand new company, you just went public, you're doing well in the stock market and you have just invented a new type of computer micro chip. This chip out performs all of its competitors in every category. Apple has just contacted you because they want to use this chip in one of their new products. How excellent you think to yourself. Being a new company, and not having much experience yet in negotiating process, the first thing you do is plan out what you want out of this deal. Not even considering (or if you do, not as much as you should be) what Apple would like to get out of this deal. Throughout the negotiations you point out how much better your product performs compared to others in every field. This is what you think Apple would be interested in, which they are to a degree, but not as much as you assume. Do not assume - you can never be armed with too much information. Read about past deals Apple has made with other companies and see what the details or at least the general overview of the outcome was. By doing this, you can find a common ground to work with. Find out what they look for when negotiating, how much they're willing to give to get, and so on. There are many software tools out there today that can help you with this. Apple hears what you have to say and decides this is not the right path to take within about 10-15 minutes into the meeting.

Why did Apple make the decision they did? Well, you must remember that when you negotiate you're not the only participant in this deal. There are two sides and both must find a place to meet and sit down for lunch. Almost as if you were in the college cafeteria and you had just gotten your food and went with your friends to sit down. The problem then arises, there is no place to sit. Why? Well, perhaps, what you should have done is had one or two friends find a table ahead of time and everyone else get the food and bring it to the table. Instead of doing that, you all try and get everything done at once, not thinking ahead or of the possible outcomes and it turns into a problem.

Bottom line, you must always assess the situation in full. Do not just consider your situation, but consider all of the situations for each party involved. Failure to do so, will usually result in a loss of business or even worse, a loss of a business relationship.