If you are preparing to enter into an important negotiation where the stakes are high it could leave you feeling nervous and uneasy. If you negotiate too hard, the deal will crumble. If you are too timid, you could end up leaving money on the table. While it’s certainly important to spend lots of time preparing to close the deal, you need to spend just as much time preparing to walk away. Knowing when to walk away in a negotiation is some of the most important and powerful information a negotiator can bring to the bargaining table. Nobody wants to walk away from a deal, but there are times when it is necessary and you must be comfortable doing so. Knowing when and how to walk away from a negotiation can be advantageous, and here’s why.
It Prevents You From Making a Bad Deal
Negotiations aren’t easy and there are times when you can feel a lot of pressure to close a deal. If you haven’t prepared ahead of time and established your walk away point, you could easily find yourself caving under the pressure. Knowing your walk away terms is extremely important because negotiation isn’t just about getting the best deal, it’s also about figuring out whether it’s a good opportunity. Sometimes turning down a potential deal can save you a lot of money and frustration. The last thing you want is to agree to a deal you don’t really like. If you don’t establish a walk away point ahead of time, it’s easy to get lost in the emotion of the deal and you could end up breaking down due to the stress of a high-stakes negotiation. For this reason, you need to know when it’s time to cut your losses and move on.
It Gives You Leverage
It is always advisable to establish your walk away point and be willing to do so if needed. Equally as important, the other party must know you’re comfortable walking away. Sometimes the most profitable deals are the ones that appear as though they will never close. If your counterpart gets any sense that you won’t really walk away, they are going to push harder and more aggressively to get you to reach an agreement. On the other hand, if they feel like you will walk away confidently, they might be more willing to concede. Knowing your walk away terms and actually committing to them can give you leverage at the bargaining table.
You Can Develop Your BATNA
Negotiations don’t always go the way you plan and that’s just the reality of doing business. At the same time, however, this doesn’t necessarily mean that the terms of the negotiation have to be black and white. In addition to knowing their walk away point, successful negotiators also develop a BATNA (best alternative to a negotiated agreement) prior to entering into negotiations. This is a last ditch effort to save the negotiation before walking away entirely. Figuring out your BATNA can be done by determining what terms are acceptable and knowing your limit. Having a range allows you a little bit of wiggle room before you have to walk away. It also reaffirms your decision to walk away if necessary.
Knowing your walk away point can be one of the hardest decisions in a negotiation. However, it is not a decision to be considered later, in the heat of the negotiation. Determining your walk away terms before the negotiation is critical in order to reach a win-win agreement. This helps you stay on track and prevents you from making a deal that is unreasonable. There are several reasons why it might be beneficial to disengage, and determining your walk away terms gives you the resources to negotiate confidently and successfully.