Western culture: the main reason why most of aren't keen to negotiate on a deal. Yet for small businesses in particular, the ability to understand the processes involved in a negotiation can mean the difference between profit and loss.

Knowledge is power and it can take as little as one day to grasp the fundamentals of successful negotiation. Once learned, you'll be surprised at just how often these skills come in handy, at work of course, but in your everyday life too.

Let's look at a few figures first. A successful $1 million business might make ten percent profit. There are plenty of organizations with that kind of revenue making no more than two or three percent pre-tax profit. Imagine then a tough year like 2008, when costs rose dramatically and major customers refused to accept price increases of any kind.

By honing your negotiating skills, it's quite realistic to expect improvements in your deals, depending on which commercial area you're in, three or even five percent more might be feasible. The biggest challenge is to first accept that there's a set of highly effective rules for negotiating and that professional buyers in particular know exactly how to use them.

Perception is reality. It is usually within your control to manipulate the environment of a deal and that one advantage can make a huge difference to the shape of a deal. Suppose you are buying a car and having looked around it, you've decided it's exactly what you want. The sticker price on the car is $8,950 'or nearest offer'. So what does 'or nearest offer' tell you? It means the vendor doesn't expect to get $8,950 at all. And what do you think he might be aiming to get?

So now you're thinking he'd be happy with $8,700 and you haven't done a thing yet. Ask him what he was hoping to get (DON'T ask for his lowest or best price, bottom line or any such thing at this point - you don't want to risk backing him into a corner). Western culture kicks in again and he'll feel obliged to help with a reduction from the sticker price; after all, it was he who put 'or nearest offer' after it. Whatever he says next, look him straight in the eye and repeat his words quizzically: "$8,800?" Watch his reaction.

Say nothing more for now but casually take a couple of steps around the car and focus on a fault that it has, any fault you like. Lightly touch the tread of one tire perhaps, or pick at a chip in the windscreen.

We'll stop there, because there are so many more little things you can do to change his perception about his relative strength in this negotiation and we've only just begun. Put yourself in his shoes and you'll realize that he's already beginning to think that $8,800 might be a bit too much in fact. The great thing is that you've done nothing offensive, nothing embarrassing at all and you've reduced the starting point for negotiation by perhaps six or seven percent.

You've actually put into play two of your negotiating skills tools here. All you need to know is what they are and how they can be linked together, replicated, in other types of deal. Once you know the rules, you can apply these tools to great effect in any situation, without damaging the relationship in any way.

So, 'Let's haggle' is a concept that we all understand well but it takes very little time to understand the psychology that's behind the phrase even though we may be shackled by our culture. In the example above, we've actually turned that cultural hang-up into an advantage, a benefit in our favor right at the beginning of the negotiation.