It has been said that “failing to prepare is preparing to fail” and this saying certainly applies to negotiation. When it comes to negotiation, there is no guarantee that you will achieve your desired outcome, but not preparing is a recipe for failure. Although many people think of a negotiation as a win/lose proposition in which two parties must fight for what they want, it is actually more of a communication process where both parties work to achieve a mutual result. This can only be achieved through research and preparation. In fact, over 80% of a negotiation outcome is achieved in the pre-negotiation phase, and preparation is the key. While preparation is commonly overlooked, it is vital to success. Here are a few steps to help you prepare for your next business negotiation.
Identify Your Goals
You can’t negotiate if you don’t know what you want. Your first step in preparing for a negotiation is to identify your goals. Are you seeking a good deal? Are you looking to improve your relationship with the other party? Define your goals and know what it is that you want to achieve. Only then can you develop a plan to get there.
Not only is it important to understand your own goals, but you also need to learn as much as you can about what is motivating your counterpart. Find out what their goals are and identify their pain points. You also want to familiarize yourself with other competitors that might hinder your ability to negotiate with this other party. Instead of focusing solely on yourself and your own goals, be sure to gather insight into the needs of your counterpart so you can improve your chances of reaching a mutually beneficial agreement.
Brainstorm Options for Mutual Gain
Novice negotiators make the mistake of viewing a negotiation as a discussion that ends with a winner and a loser. One side will “win” and get what they want while the other party will “lose” and give up more than they wanted. However, this mentality does not lead to long-term relationships and success. Instead, it is far more beneficial to seek a mutually beneficial agreement in which both parties end up as “winners.” Therefore, you need to prepare ahead of time by brainstorming options that would be mutually beneficial. Anticipate where you and the other party might come together and be ready to offer these suggestions.
Identify Your BATNA
Unfortunately, negotiations don’t always go as planned. That’s why every negotiator should prepare a BATNA in advance. This refers to the Best Alternative to a Negotiated Agreement. Simply put, it’s like a Plan B. This is what you will need if the negotiations fail to produce your desired outcome. You need to know this ahead of time, so you can live with it should it happen.
Form a Trading Plan
Negotiations are all about give and take and it’s likely that you will have to give a little in order to get what you want. That’s why you should always prioritize your interests ahead of time and think about what concessions you would be willing to make. In other words, what can you trade and what can you get in return? Always start by trading your least valuable concessions and always make sure you receive something in return.
Prepare Yourself Mentally
The right attitude towards negotiation can mean the difference between success and failure. Get into the right frame of mind beforehand. Negotiations don’t come easily to most people, so leave spontaneity for the pros. Keep in mind that negotiations can also be stressful and emotional so think about what tactics you will employ to avoid frustration and stay focused on your goals. Finally, know your walk-away point. Bluffing works in poker but it’s quite different at the bargaining table. Be sure you have laid the groundwork for your negotiation ahead of time.