Negotiation: planning for a successful outcome

In any type of negotiation, the planning stage is probably the most important. Too often we go in unprepared and end up giving concessions that reduce the overall profitability of the final deal. The importance of planning is to have a very clear idea before entering into the negotiation, that is,

o What are my goals?

o What does the other party want to achieve?

o What information will influence the final result of the negotiation?

o What concessions can I make?

o How am I going to achieve my goals?

o What role will other people play in the negotiation?

In general, the more time spent planning and preparing for the negotiation, the

the more beneficial will be the end result.

Objectives:

Before entering the negotiation, you need to have a clear idea of ​​your objectives

and try to solve those on the other side. Ask yourself the following questions:

o What exactly do I want to accomplish with this negotiation?

o Which of my goals:

– Should I achieve?

– Do I intend to achieve?

– I would like to achieve?

o What options or alternatives would be acceptable to me?

o What are the other sides? objectives?

o How does the other party see the negotiation?

Information:

It has often been said that information is power. In any negotiation, there will be four types of information that are important to the bottom line.

o What information do I have that the other party also has?

o What information do I have that the other party does not?

o What information do I need to have before negotiating with the other party?

o What information does the other party need before they can negotiate with me?

This can be particularly important when dealing with people who are focused

on pricing issues.

o What other things are important to this person?

o What pressures do you have on him to conclude the deal?

o How well is your company doing right now?

o How important is it that he deals with my company? etc.

The first phases of the negotiation consist of both parties obtaining more information.

before talking about a specific deal or set of alternatives. For example, if you discover

the other side has a deadline that only your company can meet, you can give them

the opportunity to negotiate a more favorable price. If you know that on the other side

has recently expanded its production capacity, you may be able to negotiate more

favorable terms in exchange for a commitment to buy certain volumes during an agreed time

time frame.

By spending time as part of your preparation to make a list of what you already know and

what you need to know, you will have a better chance of negotiating well in

name of your company.

concessions :

Negotiation is a bargaining process by which an agreement is reached between two

or more parties. It is rare in a negotiation that an agreement is reached immediately or

so that each side has identical goals. Most of the time, agreements have to

determine where concessions are given and received and this is the area where

the profitability of the final result will be decided.

When preparing for the negotiation, it is advisable to write down a realistic evaluation

How do you perceive the end result? Discover the limits of your authority within

the negotiation and decide what you are willing and able to concede to

reach an agreement that satisfies all parties.

Concessions have two elements; cost and value. It is possible during the negotiations

conceding issues that are of little cost to you but of great value to the other side. East

it is the best type of concession that can be made. Avoid, however, giving in on issues that

they have a high cost to you regardless of their value to the other side.

As you prepare for negotiations, ask yourself the following questions:

o What is the best deal you could realistically get in this negotiation?

o What is the likely outcome of the negotiation?

o What is the limit of my authority?

o When should I walk away?

o What concessions are available to me?

o What is the cost of each concession and what is each one worth to each side?

Strategy:

Planning your strategy is important in trading. Once you know your goals,

you need to figure out how you are going to achieve them. It is also useful to try and

see the negotiation from the other side and try to figure out what your strategy will be

be.

During the negotiation there will be opportunities to use various tactics and you

you need to decide which of these you are comfortable with while also acknowledging the tactics the other side uses. Ask yourself the following questions:

o How am I going to achieve my goals in this negotiation?

o What is likely to be the other side’s strategy?

o What tactics should I use within the negotiation?

o What tactics is the other party likely to use?

And finally – Tasks :

If you enter into a negotiation with a colleague or colleagues, you must decide during

the preparation phase:

o What role will each team member have in the negotiation?

o How can we work together most effectively?

Some negotiating teams supplement team leaders, note takers, observers, and

specialists, each with their own authority and clearly defined functions.

Having a clear understanding of the roles within the negotiation will make the team

much more effective approach.

Copyright © 2007 Jonathan Farrington. All rights reserved