1、Decide on your break-even point. In financial terms, this is the lowest amount or cheapest price you will accept in the deal. In non-financial terms, this is the “worst-case scenario” you are willing to accept before walking away from the negotiating table. Not knowing your break-even point can leave you accepting a deal that is not in your best interest.
– If you are representing someone else in a negotiation, get your client’s agreement for a target deal in writing beforehand. Otherwise, when you negotiate deal, and they decide that they don’t like it after all, your credibility is the one that takes the hit. Proper preparation can avoid this from happening.
2、Know what you’re worth. Is what you’re offering hard to come by, or is it a dime a dozen? If what you have is rare or noteworthy, you have the better bargaining position. How much does the other party need you? If they need you more than you need them, you have the better position, and can afford to ask for more. If, however, you need them more than they need you, how can you give yourself an edge?
– A hostage negotiator, for example, isn’t offering anything special, and needs the hostages more than the abductor needs the hostages. For this reason, being a hostage negotiator is very hard. In order to compensate for these deficiencies, the negotiator must be good at making small concessions seem big, and turn emotional promises into valuable weapons.
– A rare gem vendor, on the other hand, has something that is rarely found in the world. She doesn’t need a particular person’s money — only the highest amount of money, if she’s a good negotiator — but people want her particular gem. This puts her in excellent position to extract extra value from the people she’s negotiating with.
3、Never feel rushed. Don’t underestimate your ability to negotiate for what you want by simply outlasting someone else. If you have patience, use it. If you lack patience, gain it. What often happens in negotiations is that people get tired and accept a position that they wouldn’t ordinarily accept because they’re tired of negotiating. If you can outlast someone by staying at the table longer, chances are you’ll get more of what you want.
4、Plan how you will structure your proposals. Your proposals are what you offer to the other person. A negotiation is a series of exchanges, where one person offers a proposal and the other person counter-proposes. The structure of your proposals can spell success or lead to disaster.
– If you’re negotiating someone else’s life, your proposals need to be reasonable right off the bat; you don’t want to risk someone’s life. The downside of starting off aggressive is just too much.
– If, however, you’re negotiating your starting salary, it pays to start off asking for more than you expect to get. If the employer agrees, you’ve gotten more than you asked for; if the employer negotiates you down to a lower salary, you’re heightening the impression that you’re being “bled,” thereby increasing your chances of securing a better final salary.
5、Be ready to walk away. You know what your break-even point is, and you know if that’s not what you’re getting. Be willing to walk out the door if that’s the case. You might find that the other party will call you back, but you should feel happy with your efforts if they don’t.