Stages Of Negotiation - From Preparation To Agreement
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    Negotiation is a skill that comes handy in almost any life situation. You negotiate when you are trying to motivate your son to do his homework.
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Stages Of Negotiation - From Preparation To Agreement

Negotiation requires methodology. The expert negotiator invests more time in preparing a
negotiation than an average one, and that’s why he takes the time to think in advance a set
of arguments with which to defend his position, and downplay his concerns and
expectations.

Negotiation is a skill that comes handy in almost any life situation. You negotiate when you are trying to motivate your son to do his homework. You negotiate when you and your friends are deciding on whose turn is it to be in charge of the grill on your next gathering. And you even negotiate with yourself when you are saying “no” to that piece of cake on a Monday because you are on a diet and you are supposed to eat perfectly clean up to Saturday.

​​​​​​​But even though negotiation is ubiquitous, in this article we’ll focus on it from a business
point of view. Without a doubt, being a skilled negotiator can be a very valuable asset in
many business situations so putting in work to improve negotiation skills can’t be
underestimated.


The Five Stages of Negotiation

1- Preparation:

Without preparation, there’s no result. Preparation increases your flexibility, imposes rigor and forces you to follow certain automatic patterns, or basic negotiation skills, that get better with time and practice.

The more automatic patterns you have at your disposal, the more ready you’ll be to face the many unforeseen events so typical of negotiations. In this stage, you need to define and note down which are the points that need to be discussed, the milestones you want to reach in the negotiation, the concessions you are willing to make and the limits below which you are not willing to go.
Key questions to ask during the preparation stage:

- What do you need from the other part? In which order of priority?
- Being a good negotiation involves good preparation and practicing negotiation skills
exercises. How do you plan to prepare yourself for the negotiation at hand? What’s
the minimal amount of time that you need to devote to this particular negotiation?
- Are you B.A.T.N.A calibrated? (B.A.T.N.A stands for Best Alternative to Negotiate an
Agreement)


2- Exploration:

This stage involves researching, exploring and establishing a dialogue with the other part, so it can be considered part of the pre-negotiation process. Because in order to propose (stage number 3) your first need to know what the other part wants.

The dialogue and the meetings will allow finding the common ground between both of you
and uncover what matters most to each part as well as discover the motivations or inhibitions of the parts involved.


I- Calibrate your B.A.T.N.A:

Once you have determined your B.A.T.N.A during the preparation stage and you RP
(Reserve Price) you have all you need to know which is the lowest offer you can accept in
the negotiation. In the exploration stage, you need to find out which is the highest price you think you could get and find out the RP of the other part.


II- Calculate the RP of the other part.

3- Proposal:

A proposal is a provisional offer that one of the parts makes. The proposal gives an answer
to the following question: What does the other part want and in which order of priority?

Creating an anchor (price) in the initial proposal is useful for finding out the BATNA of the
counterpart, setting the negotiation rhythm and building a foundation for the next rounds of negotiation. If this wasn’t the case, because the anchor is below or above the RP, then
the correct answer is to counterbalance its influence with an aggressive counter proposal and pointing out the need to work together to close the distance in the negotiation.


The negotiation progresses when both parts exchange realistic proposals and it stagnates if
what is being exchanged are arguments, opinions, and emotions instead.


4- Exchange:

This is a key moment in the negotiation, where it is of utmost important being able to listen and interpret every word the other part says in order to detect flexibility or weakness.

There is always a need for hiding behind any proposal. Concessions are a tool to close the gap between us and the other part and it’s only possible to negotiate if concessions are made.

In the exchange, the rule of thumb is asking before giving. Conditions before offers.
Every word said during a negotiation has a why, and the data they reveal can be either
conscious or unconscious.


At this stage, a negotiator must always be taking into account the following:
- Review of the milestones reached in each of the stages.
- Highlighting the points in common between both parts.
- If there is still a considerable gap between the parts, it is important to point out the
  common ground, no matter how insignificant it still seems to be.
- Avoid reaching isolated agreements. Always take into account all the petitions of the
  other part in order to evaluate their priorities.
- Realize that there is a correlation between a high aspiration level and a good result.
  In other words, if you ask for more from the get-go, it’s very likely that you’ll end up
  with more.


5- Agreement:

The goal of every negotiation is to close a deal. The negotiation goes on until the very last
second before an agreement is reached.

Written agreements usually reduce the risks. In any negotiation that involves plenty of data and specifications, it is crucial to put into the paper the most important points discussed until the definite documents arrive.

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