Newspaper article Sarasota Herald Tribune

Are You Prepared to Negotiate a Deal?

Newspaper article Sarasota Herald Tribune

Are You Prepared to Negotiate a Deal?

Article excerpt

BUSINESS SCORE CARD

What is a negotiation? A negotiation is a discussion between two or more people aimed at reaching an agreement. Some people hate to negotiate and may suffer by paying more than necessary. When negotiating, be sure to pay attention to these 12 points:

Binding authority -- Does the negotiating participant have the authority to enter into and bind an agreement that is reached? If the answer is no, then you are wasting your time.

Do you have a target? -- What type of deal are you hoping to get? Have you determined a threshold that will make you walk away if that goal is not reached? Do not disclose your best offer to the other side. Be sure that all offers are in writing.

Research -- Knowledge is power, so understand what the key issues are likely to be. Learn as much as possible about the other side and what is important to them. As part of your research, prioritize what is most important to you. Determine what you are willing to accept and what won't fly. Are there trade-offs that you can work with? It is important to approach the negotiation with reliable information.

Who goes first? -- Making the first offer sets the stage and anchors the deal. Anchoring is a psychological concept that sets the spectrum of the negotiations from high to low. If someone told you they would pay between 100 and 125, then you are thinking 125 and they are thinking 100. Whatever you do, don't bid against yourself. If you make an offer, wait for a counter-offer before you say anything additional. Often, first offers are not aggressive enough, so be realistic but not ridiculous. Don't accept the first offer without a counter. Ask for some concessions, even if they are minor.

Low-ball offers -- If you receive a ridiculous offer, explain that the offer is too low and ask for a realistic offer to reset the anchor.

Win-win deals -- Both sides expect a good deal and want to feel they got one. It's a win-win deal if both sides consummate a negotiation and feel good about it. If the situation involves working with the other side after a deal is made, you certainly will want to have a win-win deal. "My price, your terms," is a saying that refers to the relative relationship between price and terms. …

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