When your company or startup doesn’t make a good profit and you barely have any negotiating leverage, conventional negotiation rules don’t apply. Many entrepreneurs, business owners, and CEOs are compelled to bargain with employees and investors in an attempt to help their businesses remain on the floating line. How do you pay people throughout the startup stage of your business, when the wage you can afford to offer is not a competitive one?

 
At some point people will want more money. Is it possible to negotiate with them and convince them to stay with you and your company even if you won’t be able to pay them more for another 6 months, or even a year?
 
Everything Can Happen When People Negotiate Properly
 
First and foremost you have to be respectful and at the very least try to understand the needs and demands of your employees. In a company that doesn’t have many resources the personal and professional lives of employees are connected. Of course this doesn’t mean that you will give them a raise the moment they ask for it, but listen very carefully to the reasons they have when asking for more money.
 
Many employers wrongfully assume that when workers want to negotiate for something, that “something” is always cash. You’d be surprised at what some people actually want; working 40 hours a week is exhausting, regardless of a monthly wage. That being said, certain employees would rather negotiate for more vacation time or flexible schedule, than a raise. You can’t know what people want unless you listen to them. Be a good boss and listen!
 
Negotiating with Employees Who Want a Raise
 
When bargaining compensation, it’s a lot better to connect employee pay with the overall performance of the company, rather than to performance throughout the company’s startup stage. This can have a negative effect on your business’s productivity level because employee compensation will be connected to the performance level of their peers. The downside of the tactic is that your startup may have top performing employees; however, they can’t get a bonus or a raise because of problems with performance among their colleagues.
 
As the owner, you have to deal with this sort of situation. The best way to fix things is to negotiate with your best workers. Offer them bonuses or more vacation time, and your other employees will want that, too. They’ll try more and they’ll work harder to help your company thrive. This may seem unbelievable, but sometimes gift certificates and flexible work schedules can have a greater effect than better pay. When you own a small startup it can be a terrible idea to divide a cash bonus pool among your best employees. People may start fighting for that bonus, which will create chaos.
 
 
Don’t Scare Off Your Employees
 
A lot of employers want to appear tough when hiring people. Some would attempt to screen out candidates before giving them the opportunity to present themselves. Job descriptions with hazard label warnings like “RESUMES WITHOUT A FULL SALARY HISTORY WON’T BE TAKEN INTO CONSIDERATION!” are scary rather than appealing. They convey an intimidating message that could chase off a lot of valuable potential employees.
 
Negotiate with potential candidates with poise and determination. Connect to them on a more humane level and engage in a conversation. The only way hiring managers can land top talent is by using persuasion. Give them the ‘grand tour’ of your startup. Talk about daily duties, expectations and future goals. Afterwards feel free to bring up the salary issue. Give candidates a number and let the negotiating begin.
 
Offer Potential Employees Non-Financial Incentives
 
This may seem surprising, but not all people crave jobs that pay well. Sometimes non-financial incentives can have a greater effect. More vacation time, flexible working hours, weekly seminars and training for career growth are things that many employees would trade for more money. Don’t allow future employees to underestimate you. Be sincere during a negotiation and mention that certain things can’t and won’t be negotiated. Set the pace of the meeting by remaining focused on the facts, as this will help candidates understand your company’s goals.
 
Secure a lucrative deal by negotiating with candidates in the most professional way. If there are things your company can’t offer, tell them. Talk about goals and expectations, but try not to underestimate their value with an overly bossy attitude. Adopt a friendly attitude and you might land an excellent employee without having to offer him a fortune.
 
Author: Steve Brown and TheGapPartnership.com.