Small business owners negotiate every day, whether it’s supplier or vendor contracts, rent increases, or customer prices. While it’s necessary, if you sometimes find it awkward or stressful, you’re not alone. A new study suggests people often avoid negotiating, even when they know it’s costing them money.
That’s not good for business, of course. The benefits of negotiating are well-established—it can lead to better deals, stronger business relationships, cost savings, and an enhanced competitive edge.
But negotiating isn’t always easy, even though doing it well is an essential skill for small business owners. Here’s what to know.
Most people avoid negotiating even when they save money
The research, published in October 2025 in Negotiation and Conflict Management Research, involved multiple experiments and more than 5,800 Americans to examine why people avoid negotiating and the impact it has on them.
It found that 95% of subjects chose not to negotiate 51% of the time.
People tend to judge the value of negotiation by the percentage saved, rather than a dollar amount. Using the concept of Threshold for Negotiation Initiation (TFNI), researchers found that people needed to save 21% to 36% of an item’s price before considering it worthwhile to negotiate. And 49.7% reported a willingness to pay more to avoid negotiating.
However, participants were more likely to engage in negotiation when told that their peers also negotiated in similar situations.
“Negotiation aversion is real—but at key points in your career, negotiation skills matter,” David Hunsaker, Clinical Associate Professor of Management at the Indiana University Kelley School of Business Indianapolis, and lead author of the study, said in a statement. “Recognizing these tendencies is the first step toward overcoming them.”
How to become a better negotiator
Negotiating is an important tool for small business owners, but not everyone is a natural. Here are some tips for becoming a better negotiator:
Be prepared
Research all your options before heading into negotiations, and know where you stand and what you want the outcome to be. “If you don’t, you’ll enter with less leverage. Many people overlook this step—understand your position before you negotiate,” Hunsaker said in the statement.
Negotiation aversion is real—but at key points in your career, negotiation skills matter...Recognizing these tendencies is the first step toward overcoming them.David Hunsaker, Clinical Associate Professor of Management at the Indiana University Kelley School of Business Indianapolis
Focus on solutions
Be “solution-driven” and come to the negotiation with ideas that will meet your needs, according to SCORE, a nonprofit and U.S. Small Business Administration partner. But try to understand the other party’s goals and challenges and see how your needs (and the negotiation’s outcome) can align with theirs.
Start higher
While you have a price or goal in mind, propose something higher to kick off a negotiation. There must be “room for concessions,” Hunsaker said. “Start with an offer better than your goal, and it will help the other party feel more satisfied with the deal.”
Focus on relationships
Building trust and maintaining relationships is crucial for small businesses. You’re most likely to be negotiating with repeat customers, vendors, or other partners, and you don’t want to burn bridges. Otherwise, you’ll miss out on deals later, Hunsaker said. “Focus on doing well, but also focus on listening to the other party and creating a foundation of trust.”
Strive for a win-win outcome
You want to be assertive, but not aggressive, SCORE suggests. You should aim to create a win-win negotiation that benefits you and the other person or organization. This increases the likelihood of repeat business or continued partnerships, rather than a one-time deal.
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