Creating a planning checklist, positioning yourself, understanding other party’s point of view and creating a contract within the “shadow of the law” is integral in good negotiation. I’m very fortunate in closing small and big deals using those concepts and I would like to help you by sharing my thoughts on achieving the best possible outcome in your negotiation.
Negotiation Planning Checklist
- Determine your goal in the negotiation and know what you want to achieve.
- Prepare your BATNA (Best ALTERNATIVE TO a negotiated agreement) and think whether to disclose it during negotiations. If your BATNA is strong, you can disclose it to show your good position. Hide it if its weak. Never negotiate without a BATNA as you might lose control of important matters such as pricing and contract clause. Improve your BATNA to increase your power.
- Think of the other side’s goal in a negotiation. Walk in his shoes so that you can have a feel of his interest and what he is trying to accomplish. If you can, try to know his BATNA.
- List all the issues that are likely to arise during negotiation. Do your assignment to solve this problem and prepare for the possible answer in case the other party might ask.
- Determine your reservation price and your reasonable target price. (Reservation price is the lowest price you are willing to accept while the reasonable target price is one of your goals.)
- Ask yourself if you should be the first to state a price, or you will let the other side to state it. If you’re confident about the price, you can state it first provided that you can anchor it to the other side offer.
Positioning is about framing the way you want to be perceived by the other party. It will enhance the outcome of negotiation and will position you nicely prior to a negotiation. If you done it right and if it seems that you are accepted in that manner, the other party’s will follow your lead. They will feel at ease when making concessions and will trust you what you say you’ll do. Make sure that your positioning is believable because if it’s not, it could do more harm than good.
Understanding other party’s point of view
You need to understand the other party’s point of view to align it with your own interest and goal. Negotiation often fails because of people who tend to be egocentric in their approach. They tend to only see their own perspective. As a result, they fight vehemently to come to a possible outcome that is only beneficial to them. A good negotiator should assume that what’s important for their side is also a priority for the other, and vice versa. It should be a win win approach that helps both parties finding a solution to their differences by determining each others perspective.
Creating a contract within the “shadow of the law”
Even though you will be hiring a lawyer in creating the contracts, it’s very important that you understand the laws. As contracts are based from the existing laws. If the other side of the table is from another country, make sure you and your lawyer is familiar about it to avoid conflicts in your contract. It’s not good chasing each other in a court later because of a misunderstanding in a contract. Here are my contract law checklists:
- If you are using a preliminary document such as a Letter of Intent, Memorandum of Agreement, or Agreement in Principle, you should state in the document that it is for a negotiation purpose only and the final contract will be prepared by a lawyer.
- If you reached an agreement, be sure to use the term “acceptance” carefully, and to have a second and third opinion in vague terms used in the contract.
- Make sure that the agreement is legal as legality of requirements extend beyong violation of criminal law.
Its a must that the agreement should be in writing. Any contract modification should also be in writing.