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The Art Of Negotiation

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Negotiation is a dialogue between two or more parties, with the intent of coming to a mutually agreed solution, because each party has something the other wants.

Successful negotiation is an art form that comes naturally to some, but must be learned by most.

Published in: Business
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The Art Of Negotiation

  1. 1. The Art of Negotiation
  2. 2. Negotiating has become part of our daily life, it is an especially important skill to the people in business, sale, marketing and dispute settlement. Many people have a misconception about negotiating, which is either all or nothing. However, with strong negotiating skill and right frame of mind, a win - win situation for both parties can be attained. Since both parties want to win, what is the best way to proceed? Here are four steps:
  3. 3. Preparation
  4. 4. Preparation  The whole concept of preparation is about having a strategy in order so that you know about the party you’re negotiating with, in order to leverage on your strengths and weaknesses.  It is important to also think about what you want to achieve from the process & what would make sense to reach desirable outcome.  During the course of negotiation, the goal may change by unforeseen actions by either party.  It’s important to visualise the scenarios to think about how you would handle each of them.
  5. 5. Preparation Action Steps A. Plan the deal that you will be excited with, the target you will be content with and the deal that you will walk away. B. See the negotiable and the non - negotiable. C. If possible, have a conversation with associates who have dealt with this person before, grab the chance to gather information and styles that you may be able to use to your advantage. Tips 1. Make sure you are dealing with only the party who is fully empowered to make the agreement. 2. Have a price target or specific goal which is realistic. 3. Put yourself in their shoes and anticipate the conditions or counter offers from the other party.
  6. 6. Opening Offer
  7. 7. Opening Offer  When both parties have enough information, then the negotiation starts with someone offering an exchange.  The offer may be accepted, rejected or trigger a counter offer.  The secret of a good opening offer is to be firm and clear.  To retain credibility, the offer should be realistic and acceptable by both parties without short changing one another.  In this phase, you need to disclose everything you want, but in a reasonable way which can be acceptable by the other party to reach an agreement.
  8. 8. Opening Offer Action Steps A. Make your first offer bold and aggressive, but not ridiculous, to give buffer for negotiation. B. Have something which is ‘nice to have’ to give away without hurting your position. C. Watch for clues such as body language, speech patterns and reactions to what you say. Tips 1. Ask questions. (Don’t ask, don't get.) 2. Establish a strong foundation by demonstrating your knowledge and expertise. 3. Talk less, listen more to find the leverage.
  9. 9. Bargain
  10. 10. Bargain  The heart of many negotiations is bargaining, which is the adjustment of what is being offered until both parties are satisfied with the arrangement.  An important aspect of bargaining is trading which may be about individual items or the whole package.  It may become heated especially if the parties have a win - lose attitude.  In an ideal and more collaborative negotiation, parties should show more concern for one another but carefully seek for inequitable deal.
  11. 11. Bargain Action Steps A. Trade one element for another. E.g: Lower price for a more relaxed schedule. B. Maintain Posture by staying firm and clear. C. Present your offers in writing to avoid misunderstanding. Tips 1. Aim for win - win solution 2. Have a list of tradable items as your bargaining chips 3. The options from you shouldn’t be more than 3. 4. Keep your acceptable deal in mind where you are prepared to suspend or walk away.
  12. 12. Closing The Deal
  13. 13. Closing The Deal  The closing phase requires a sense of timing, creativity, keen awareness and the ability to anticipate the other party’s moves down the line.  Always have the endgame in mind and move towards the stage of final handshake.  A handshake is a powerful effect in preventing people from backing out.  Subsequently, strengthen the end of the deal with formal contract, especially in commercial setting.
  14. 14. Closing The deal Action Steps A. Once an agreement is reached, move towards final handshake. B. Formalise the deal by having an attorney draft a contract soon after negotiation process is complete and make certain that it is signed by all pertaining parties in a timely manner. Tips 1. No-deal is better than a bad deal. 2. Plan for the worst. 3. Prepare yourself for the last minute tricks by the other party. 4. Beware of relaxing too early before the contract is signed by all the pertaining parties.
  15. 15. Thank You References: The Art Of Negotiation, Chris Merrington, 2011 www.entrepreneur.com www.investopedia.com

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