Whether it’s asking for a raise or selling your product, negotiation is an art that you need to master to win your professional battles. The following guidelines will help you through the negotiation preparation stage. These are mainly related to professional settings, for example between two business parties, but if you are planning some personal dealing, like negotiating a rental or buying a used car, you will find many of the tips helpful.

Mindset

The mindset that you take into the battle needs to be positive. This means that you should prepare to enter the negotiation with confidence. You should have done your homework and have some solid arguments behind each of the issues. A display of confidence is a display of power. If you believe in yourself, you will also sound convincing.

Second, positivity implies that you are willing to seek a ‘win-win’ deal — you plan to reach an agreement to the mutual benefit of both the parties concerned. This may help in making the negotiation process smooth. If any hostility is to occur during the negotiations, you should not be the one to instigate it.

Third, it is always easier for the other party to give concessions when the atmosphere is friendly rather than antagonistic. You may change your strategy, if, during the negotiations, you find that the other party is hostile or deceptive. It is always easier to start from a courteous attitude and then move to an attacking mode than to do the reverse.

Fourth, remember good negotiators are also good actors. Both you and the other party will be feigning surprise at each other’s offer or dramatising the impossibility of accepting a particular issue. So keep in mind not to take things personally. There may be some exceptions to this case when the opposing party is explicitly insulting. You may decide at that moment to walk out if the option is open to you. Though a very difficult proposition, strive at all times to detach yourself emotionally from the proceedings. This will allow you to keep your head clear and make well thought-out decisions.

Your team

In a professional setting, to have a single person from your side doing the negotiation is a sure recipe for disaster. There are many simultaneous tasks that need to be performed during a negotiation that are not possible for a lone ranger to accomplish. Therefore, plan your team well. The team should comprise, (i) a decision-maker, (ii) a lead negotiator, (iii) experts (technical/legal/commercial depending upon the issue at hand), (iv) the scribe. Nevertheless, the leaner the team the more efficient and focussed it will be.

Even in a personal situation it is best to take a friend along who can ask questions you are too polite to ask e.g. when buying a second-hand car.

The negotiation package

With respect to the negotiation package, the information gathering should comprise at least four steps.

The first step is to establish the BATNA (best alternative to a negotiated agreement). Here you have to determine the alternative if the deal falls through, and its value. In other words, you will determine the worst value of the deal acceptable. Any worse and you walk away because your alternative becomes more attractive. Hence, if somebody owns an apartment and wants to rent it out, he may explore the market to determine how much he will get if he sells the apartment (his alternative). The selling price will help him determine the lowest rent he will accept.

Second, list all the variables that may be negotiated. Price may be one variable, but there will be others of interest to you — like delivery time, warranties, etc.

Third, put a value to each of the variables. It is best to put down hard numbers against each. However, this may not be easy for the variables that are soft issues like quality aspects. Risk and opportunity cost should be taken into account when assessing value.

Fourth, if possible, list the variables and value of items you believe the other party holds dear. This may not always be possible, but if done, will give you a good advantage in the negotiation process.

Based on the above gathered information, you will be able to determine your first price, your target price and your walk-away price. Of course, the first price should differ from the target price by the amount that gives you room to negotiate. Furthermore, having valued each variable, you will know which ones are to be retained at all costs and which can be given away as concessions.

The above guidelines represent the least homework that should be done. Over and above these, you can use your own creativity to determine many other factors that will prove useful to you. Always remember, that preparation gives you the upper hand that you need. When you enter the negotiating room with a confident air, you will have already started to swing the deal in your favour.