‘Shark Tank’ investor Kevin O’Leary explains why good negotiations should hurt

Kevin O'Leary
Source: CNBC

Celebrity investor Kevin O'Leary likes winning as much as the next shark, but in his experience, successful negotiations still hurt.

"A good negotiation happens when both sides have upside, but they have to give something up to get there and feel they've built an equity," he says.

Coming up with a deal that both sides agree with may be a long and grueling process, but typically these tend to be some of the best negotiations he closes. Both sides should come into the conversation ready to give something up.

So how do you set up a successful negotiation?

1. Come in with the three things you really want out to get out of the conversation

There may be no way around the process of compromise, but there are ways to better approach the discourse. O'Leary urges all parties to arrive prepared.

2. Know what the other party wants and what you are willing to give up.

Those who don't come prepared knowing what they would be willing to give instead of take are at a disadvantage.

"You may know what you want, you may have a target in place," he explains. "But if the other side feels you're going to take everything and they get nothing, this is classic negotiating 101. It never works."

3. Practice

It's a lesson he learned throughout the years. Negotiating early and often, Mr. Wonderful stresses, is how he's gotten so good.

"Today I'm better than I was 10 years ago because I've gone through so many iterations and mistakes," he says. "I just found a place where I can crystallize what matters in a deal."