Some small timers in business often consider negotiation a dirty word. Asking for more, wanting to pay less and trying to ‘compete' with the other side all feels wrong to so many small business people. Unfortunately, these are the same businesses that are more likely to be struggling as they get regularly outmanoeuvred by their more vicious competitors.

In the demanding world of business today, can you really afford to allow customers to slip through your fingers? Do you have to work twice as hard to earn the same amount as your competitors? With a couple of basic and relatively easily applied tactics, you can very quickly improve your negotiating skills, and get the upper hand when discussing a deal.

One of the first things that people are afraid of is the feeling of tension that competition brings. If you feel unnerved by the pressure and competitive edge the other party may have, there's a very simple rule to apply: act dumb. This might seem somewhat bizarre, but it works. Let's take the example of buying a used car. Often there can be a great deal of pressure from the salesman as he tries all the tricks in the book to close the sale.

One of the tactics some people try is to act smart, almost competing with the salesman on his own ground. By trying to outwit the salesman, you actually end up playing into his hands because the chances are high that he lives and dreams automobiles. He has probably already bought and sold more cars than you will in your entire lifetime! The salesman has all of the advantages it would seem, and so trying to act smart and compete with him on product knowledge is likely to end in failure!

So instead, act dumb and ask him to go over the figures again when he mentions the price. Ask him to explain the optional equipment again. ‘Sorry, I wonder if you could just tell me how the satellite navigation works?' or ‘What exactly is dual fuel?' Why would you act this way? Very simply, he won't see you as competition. He'll think you need help, and so the competitive atmosphere fades, and he steps towards you, offering help and advice. Once he feels confident, his lets his guard down. He will now be more open to a counter offer.

This is so often the tactic used by old timers in business, and you'll often hear very experienced negotiators ask for conformation or explanation of something simple, and look as though they need extra help or advice. Obviously there's another rule here: don't act dumb if it's in your area of expertise!

There's another golden rule when it comes to negotiation – never be the first one to state what you want. If it's about money and cost, which not every negotiation is – then make sure the other party is the first one to place a figure on the table. It's well known in business negotiating classes that the party who puts the first offer on the table will not get what they want. If you're looking to buy a car, you'll already know that the figure in the window isn't the one they're expecting to get.

But if you go ahead and offer a figure you think fair, the chances are that even if it's what they were really after, they'll raise you up. But if you let them make the first offer, which will certainly be below the figure in the wind (because they like you, because it's a Thursday, because they have to meet certain targets by month end...) then you can make an offer way below that. Whichever way round it is done, the party who places the first figure on the table will be the one to move furthest from their ideal goal.

By combining these two tactics – acting dumb to diffuse the competitive spirit and disarm the opposing party, and always making sure that the other party fixes on a price or a requirement before you do, you'll find yourself in a much stronger position. This will increase the strength of your hand when you eventually have to make an offer.