Why planning for negotiation is important

Why planning for negotiation is important

Negotiation planning plays a huge part in the overall negotiation process. Without effective planning, you’ll find that your desired outcome will not be achieved. The more resource you use in the planning stages, the more successful your negotiation will be, so it’s worth putting in the time.

How to prepare for negotiation

Good preparation will help you to achieve your desired outcomes from the negotiation, so it’s worth putting in the extra resource to help you. Take a look at some of the things you’ll need to plan before you go into the negotiation.

• Price:
  Preparation should be done surrounding the price. Work out how much you are willing to pay based on available budget and volumes of product or services that are being negotiated.
• Research:
  Research should be done into your market to understand the structures, levels of competition, external factors and supply and demand.
• Evaluate:
  Evaluate the supplier’s financial position. This will help you understand their cash flow and potentially how much the supplier needs your business.
• Plan:
  Plans should be created if an agreement is not reached. A BATNA should be created, fall back positions arranged and a walk away point agreed.
• Achieve:
  By preparing costs, you’ll be in a strong position to present facts and negotiate their preferred terms.
• Retreat:
  To achieve a satisfactory outcome, something may have to be conceded by either party. Thorough preparation can ensure that the areas that may need to be conceded are known, as well as the area that cannot be relinquished.
• Exchange:
  Understand what can be exchanged to ensure that the supplier believes that they are getting something in return for giving something.

Without the appropriate time spent on planning and preparation, you may end up being caught unaware and not have the knowledge to get the best possible outcome for your organisation. Your opening statement is also particularly important to be confident and professional and set the scene for the negotiation.

What is BATNA

BATNA stands for Best Alternative To a Negotiated Agreement and is a strategy that should be prepared before entering negotiation. Without a BATNA or back up plan, either party could find themselves being forced into agreeing something that does not benefit their own organisation. In worst case scenarios, cause additional costs or risks. Here are some advantages of having a BATNA as part of your negotiation planning

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