Preparation

As with most things in life, preparation for a negotiation is essential. Very few people are quick enough, empathic enough or have a clear enough understanding of a situation and options to negotiate without preparation. Your preparation should include the following:

• A clear idea of what you want
• An idea of the alternatives
• An understanding of the other parties.

What do you want?

This seems straightforward, but can you explain exactly what you want as a result of the negotiation? Often people have a general idea but could not explain this clearly. It is helpful to differentiate the things you want into:

• Must haves €“ The things that you could not agree to a deal without
• Ideals €“ The things that you want to achieve
• Options €“ The things you would like, but would not break the deal if you had all your must haves and most of your ideals.

Creating this clear understanding gives you clarity when negotiating and allows you to make decisions effectively.

Looking at alternatives helps with negotiation

Often people go into a negotiation with an eye on the bottom line and the lowest deal they will accept. When selling a house for example, you might put it on the market for £250,000 €“ because talking with your family and friends you believe it is worth at least £230,000 and your bottom line might be £210,000. Using the bottom line approach can be arbitrary and lead you to be inflexible to things you learn during the negotiation and to more imaginative options.

Understanding the alternatives and identifying the best alternative is much better. It allows you to remain flexible and choose options that develop during the course of the negotiation. The example about regarding the bottom line for your house sale would completely limit your ability to sell the house if you had overvalued the house, something easily done when you consider the emotional investment you make in a home.

What are the alternatives? You could stay where you are or keep the house and rent it out. Would either of these alternatives be better than taking £190,000 for a guaranteed sale from a cash buyer? This would depend on a host of other factors, but if you kept to your bottom line, this option would be excluded and in the long run you may be worse off.