Negotiation - Planning For A Successful Outcome

In any kind of negotiation the planning stage is probably the most important. Too often we go in badly prepared and end up giving concessions that reduce the overall profitability of the final deal. The importance of planning is in having a very clear idea before entering into the negotiation i.e.

o What are my objectives?

o What does the other side wish to achieve?

Negotiation - Planning For A Successful Outcome

o What information will influence the final outcome of the negotiation?

o What concessions can I make?

o How am I going to achieve my objectives?

o What part will other people play in the negotiation?

Generally, the more time that is spent in planning and preparing for the negotiation,
the more beneficial will be the final outcome.

Objectives:

Before entering into the negotiation, you need to have a clear idea of your objectives
and try to work out those of the other side. Ask yourself the following questions:

o What exactly do I wish to achieve from this negotiation?

o Which of my objectives:

- Must I achieve?

- Do I intend to achieve?

- Would I like to achieve?

o What options or alternatives would be acceptable to me?

o What are the other sides. objectives?

o How does the other side see the negotiation?

Information:

It has often been said that information is power. In any negotiation, there will be four types of information that is important to the final outcome.

o What information do I have that the other side has also?

o What information do I have that the other side does not have?

o What information do I need to have before negotiating with the other side?

o What information does the other side need before it can negotiate with me?

This can be particularly important when negotiating with people who concentrate
on price issues.

o What other things are important to this person?

o What pressures does he have on him to conclude the deal?

o How well is his company doing at the moment?

o How important is it that he deals with my company? etc.

The early phases of negotiation consist of both sides finding out more information
before talking about a specific deal or set of alternatives. For example, if you find out
the other side has a time deadline that only your company can meet, it may give you
the chance to negotiate on more favourable price. If you know that the other side
has recently expanded their production capacity, you may be able to negotiate more
favourable terms in return for a commitment to buy certain volumes over an agreed
time period.

By spending time as part of your preparation in listing what you already know and
what you need to know, you will give yourself a better chance to negotiate well on
your company's behalf.

Concessions :

Negotiation is a process of bargaining by which agreement is reached between two
or more parties. It is rare in negotiation for agreement to be reached immediately or
for each side to have identical objectives. More often than not, agreements have to
be worked out where concessions are given and received and this is the area where
the profitability of the final outcome will be decided.

When preparing for negotiation, it is advisable to write down a realistic assessment
of how you perceive the final outcome. Find out the limits of your authority within
the negotiation and decide what you are willing and able to concede in order to
arrive at an agreement, which satisfies all parties.

Concessions have two elements; cost and value. It is possible during negotiations to
concede issues that have little cost to you but have great value to the other side. This
is the best type of concession to make. Avoid, however, conceding on issues that
have a high cost to you irrespective of their value to the other side.

When preparing for negotiations, ask yourself the following questions:

o What is the best deal I could realistically achieve in this negotiation?

o What is the likely outcome of the negotiation?

o What is the limit of my authority?

o At which point should I walk away?

o What concessions are available to me?

o What is the cost of each concession and what value does each have to either side?

Strategy:

Planning your strategy is important in negotiation. Once you know your objectives,
you need to work out how you are going to achieve them. It is also useful to try and
see the negotiation from the other side and try and work out what their strategy will
be.

During the negotiation there will be opportunities to use various tactics and you
need to decide which of these you feel comfortable with and at the same time recognise the tactics being used by the other side. Ask yourself the following questions:

o How am I going to achieve my objectives in this negotiation?

o What is the strategy of the other side likely to be?

o What tactics should I use within the negotiation?

o What tactics are the other side likely to use?

And Finally - Tasks :

If you go into negotiation with a colleague or colleagues, you need to decide during
the preparation phase:

o What role will each team member take in the negotiation?

o How can we work together in the most effective way?

Some teams of negotiators appoint team leaders, note takers, observers and
specialists, each with their own clearly defined authority and roles to perform.
Having a clear understanding of roles within the negotiation will make the team
approach much more effective.

Copyright © 2007 Jonathan Farrington. All rights reserved

Negotiation - Planning For A Successful Outcome
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How to Buy and Sell Things For Profit - Seven Ways

There are basically seven ways to buy and sell things for profit.

If you make a living you already buy and sell things. You can buy and sell services which is called work, or you can buy and sell property. Most of us are better at buying than we are selling. By that I mean we manage to buy more in dollars than we make. It doesn't have to be that way.

If we learn to buy well, then we can not only get more with the money we have, but we can make a very good living buying and selling. If we buy right, the property will almost sell itself. We intuitively know the seven ways to buy and sell things, but it helps to have a clear vision in your mind in order to develop the skill to buy better and sell better.

How to Buy and Sell Things For Profit - Seven Ways

Many people made fortunes in the last decade buying and selling real estate. These seven ways to buy and sell property are very familiar to the real estate flippers, but the same basic ways can be used for buying and selling any type of property. eBay is bigger than Donald Trump.

1. Buy Low, Sell High

The first and simplest way to make money buying and selling is to find an item in demand, negotiate a low price, buy it, and then sell it for a higher price. In addition to good negotiation skills, you have to develop a good eye to make this work. You also have to be careful your expenses during the acquisition process don't eat up any potential profit.

With this method, you want to buy only excellent quality items that are ready to sell as is. You'll want to find a motivated seller-one who wants to get rid of the property more than he wants to make money. It is also necessary to acquire the property at a significantly low price to be able to add your expenses in and still sell below market. Selling below market is the best way to sell quickly. If you depend on your selling skills to make the deals, you don't need to bother with the investment. You can just get a job as a salesman-work.

2. Buy it, Fix it, Sell it

The second way to make money buying and selling is to look for property that is broken, dirty, ugly, or in need of a missing part or repair. This is a great way to find a motivated seller and a good price. The owners of this kind of property would rather have a new one. If they were inclined to fix it, they'd have done so already. Know your market; know your costs. Allow a generous profit to cover your repairs, acquisition expenses, and potential selling expenses. Negotiate hard and don't be afraid of deadlock. It's your money, so be prepared to walk away from an offer if they won't meet the price you need. Sometimes all you need to do to get a property in pristine condition is to clean it.

3. Buy it, Rent it

A third way to make money over a longer period of time it is to buy and rent it out. Just about anything can be rented to others-tools, cars, camping equipment, boats, motorhomes, and of course, residential homes. An alternate to this same method is to invest in special equipment, use it and then sell the service the equipment provides. All of these ways are good ways to make money, but though they are buy and sell strategies beginning to end, in the interim, they are ongoing businesses-more work.

4. Buy for cash, sell on time

A fourth method is not so effective for inexpensive items, but boats, cars, trucks, and even big screen televisions can be bought at bargains with cash and then resold on terms with interest. People are often willing to pay very high prices if they can get it now and pay later.

Some people make unbelievable profits buying mobile homes for a few thousand and financing over time for tens of thousands. Often before the buyers have finished paying the notes, their financial status has improved enough that they can buy higher end property with conventional finance. When this happens, it is common to get the item back after it has nearly been paid for. Some mobile home resellers have sold and resold certain properties four or five times. Each time they nearly double their investment with the original down payment then collect the payments over time plus interest.

5. Buy and sell wholesale

If you have the ability to purchase in quantity and move quickly, you can locate sources that will bring you deals in bulk at prices so low you can sell wholesale and still make money. You can even buy homes in quantity and sell them to others for resale. Once you spread your name around, this can be very lucrative and happen very quickly.

6. Buy on speculation and sell on demand

When the market is hot, it is possible to buy when the item is first introduced at a lower price than what will be charged later. If you can spot these trends, you can make good money buying when first offered and selling after the item is sold out. In certain real estate markets you can order a new home before it is built and count on the price to go up after the neighborhood fills in. This is dangerous, but some people have made really good money doing just this.

7. Buy for others, sell back with fee added

Sometimes people do not want to do their own bargaining. Celebrities or people known to be very wealthy often allow scouts to buy for them. Sometimes the price goes up when the buyer is well known or very wealthy. The difference in price can be so great that it becomes profitable for a middle person to buy and resell to his principal for a fee.

There are millions of ways to buy and sell, but these are the basic seven ways to buy and sell. Everything else is some variation or combination of these seven. Buying and selling can be done in rising and falling markets. When the market is deteriorating the buyer has to buy drastically below market and move very rapidly to turn his investments. There is always a risk of losing money in any market. A person engaged in these tactics must be good negotiators on both the buy and the sell, and they must be flexible enough to take the losses quickly when they are inevitable to prevent even larger losses later.

How to Buy and Sell Things For Profit - Seven Ways
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Randy R Cox

If you have buying and selling skills, you can do well in good economies or bad. If you'd like to sharpen your buying and selling skills or share your ideas with us drop by for a visit.

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How to Avoid the Four Most Common Sales Negotiation Traps

Do you want to increase your sales, profits and income? Improving your effectiveness negotiating may be the answer. Al­though there are no "silver bullets" for negotiation suc­cess, there are predictable mistakes that sabotage negotiation success. Knowing these mistakes in ad­vance and taking the action that top performing salespeople do to avoid them, can go a long way towards improving your negotia­tion effectiveness.

This article identifies the four most common sales negotiation mistakes and out­lines several approaches for mini­mizing or eliminating their impact on the negotiation outcome.

1. Failure to plan.

How to Avoid the Four Most Common Sales Negotiation Traps

People don't plan to fail in a negoti­a­tion, but they often fail to plan. Many sales­people walk into a negotiation virtually blindfolded. They have only a vague idea of what they want and an even vaguer idea of what the other party wants or needs.

S­o­lu­ti­on: Know where you're going and how you're going to get there before you start. Before each nego­ti­ation:

Schedule planning time. Identify for yourself, the buyer (or buyers), and the competition: Needs (must have) Wants (like to have) Currencies (things of value to the other party in the negotiation) Your best case proposal Options (listing alternative solu­tions that would be acceptable to both sides and what to do if no agree­ment is reached) Anticipate resistance, objections, and tactics. Identify internal obstacles and solu­tions. Visualize success.

2. Setting low aspiration levels.

Most salespeople take one of two ap­proaches when setting their initial aspi­rations for a negotiation. Some sales­people lower their expectations in antic­ipation of buyer resistance. While oth­ers have unrealistically high expecta­tions that aren't defensible which often leads to large conces­sions or unnec­es­sary lost sales.

Solution: You get what you expect, so expect what you deserve. Higher aspi­ration levels are generally a result of confidence and a great confidence build­er is preparation. Good prepara­tion can help salespeople discover a higher price that is realistic and de­fend­able.

A good technique for increasing your aspiration level is to add five to ten per­cent to every proposal and then defend your price to someone (e.g., manager, another salesperson). If you can defend your price, you in­crease the chan­ces of getting some, if not all, of the five to ten percent in­crease. If you can't de­fend your price, you'll need to do some more home­work.

Stating your highest but defendable price establishes the upper limits of your price, but gives you the flexibility to adjust it based on the buy­er's response and needs. Remember, it's easier to negotiate down than to negotiate up.

3. Negotiating price before the value of the prod­uct is established.

Discussing price before you've estab­lished the value of your product great­ly reduces the options available to create a win/win agreement. Talking price up-front usually results in a "single curren­cy negotiation." These negotiations are generally not in the salesperson best interest because the only thing to nego­tiate is price. The options facing sales­people in this situation is either meet the price de­mand or lose the sale.

Solution: Sell the value of your prod­uct before you negotiate price. Be­fore you discuss price, review and gain agree­ment on the buyer's needs and buying criteria. Simply say, "Be­fore I discuss the price, I'd like to review my under­standing of your needs. To begin with, you're interest­ed in X,Y and Z?" Be sure to get the buyer's agreement on his/her needs before you move on to the presenta­tion and price. This can even be ac­com­plished if you don't get an oppor­tunity to discuss your proposal with the buyer by starting your proposal with a review of the clients needs, and then presenting your solutions to the needs.

4. Not being ready to walk-away.

If you feel you "need to make a deal at all costs," that's usually what you'll do. Not being ready to walk away from a win/lose negotiation, is like surrender­ing uncondition­ally to the enemy. Your plight is left to the com­passion of the buyer and most of the time, sets a bad precedent for future negotia­tion.

Solution Don't negotiate if you're not ready to walk away. Before you negotiate, establish your walk-away price. This is the price or set of terms and conditions that absolutely must be met in order for your needs to be met. If your needs aren't met, it's not a win­/win negotiation.To give yourself co­nfi­dence and prevent your­self from being painted in a no-win corner, have a viable option to a ne­gotiated agreement. In your own mind, decide what's your best alter­native to making this deal. If you have a good alternative, (e.g., selling to another account, making up the lost revenue next week) it's easier to walk away from a bad deal.

If you've tried a number of options and still feel the pro­posed solution will not work for you, simply agree to disagree. One possible ending is to say, "thanks, but I can't make this work for us." Then give your rationale and keep the door open for future negotiations, as well as last-minute concessions by the other party. Re­member, when you walk, the pressure to make the deal falls back on the buyer. This pressure often leads to the buyer altering their demands and creating opportu­nities for a win/win solu­tion.

Negotiating successfully takes time, preparation and discipline. Avoiding the four mistakes and properly implementing the solutions outlined will help you win more sales while increasing profits and your income.

For more information on negotiation skills and selling go to: philfaris.com

How to Avoid the Four Most Common Sales Negotiation Traps
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Phil Faris is a business development consultant, coach, speaker and author. He is president of Phil Faris Associates a firm that specializes in helping organizations hire, train, develop, lead and retain the sales talent required to succeed in a competitive marketplace. For more information on how to increase sales, profits and customer loyalty go to: http://philfaris.com

Negotiation: The Win Win Strategy

Negotiation takes two parties to carve some outcomes based on mutual interests. This mutual interest can be some dealing or even can be some dispute. But as in this topic I will only consider dealings not disputes. A good negotiator is one who produces a WIN-Win situation between both parties. Gerard I. Nierenberg, author of The Art of Negotiation, argued that "everybody wins" is better than "winner takes all" approach. This WIN-WIN philosophy assures that all parties benefit from the negotiation process.

With the global business, distances are shrinking and we have created a global village. Merger, dealing, employing and procurements are taking more and more time of management. Lack of better negotiation can lead to failure. So, firms throughout the world are concentrating on negotiation skill of their employees.
In past it was considered that negotiation skill is a personality trait and the person having such skills can only do good business. They also believed that anyone can't achieve it as it is god gifted. But in my opinion negotiation is not a personality trait at all; anyone who has zeal for it can achieve it. This article will try to give out the best negotiation strategy, which once followed will generated WIN-WIN situation.

The process of negotiation

Negotiation: The Win Win Strategy

Different literatures talk about different steps of negotiation. I will try to put up the optimal from them. We can classify negotiations in three chronological steps - before, during and after.

1. Preparing for the negation -

a. Know your goals. Negotiation can be of vivid shades like, you want to approve your conditions, you want to take agreement of someone or you have to win a better price tag. All these must be clearly stated in your mind. Also draw out flexibility in your goals.

b. Set floor and ceiling. Any agreement has some points to ponder, and each point has a range. First chart out all the points in the negotiating agreements and also the floor and ceiling of each point. Like, if you are a human resource manager and you have to negotiate for an employee, the salary and benefits ranges should be set, before going in negotiations.

c. Know your authority limits. If you are negotiating on behalf of someone else like for your company, you also know what exactly what are your capabilities and what are your limitations. See, when you are negotiating for your company always remember that you are not the company, but you are only the employee of that company, so, don't take anything personal.

d. Fix a meeting. This is obvious point, but it is worth mentioning. Make sure that your meeting time, place and person to meet should be well decided. The time and place chosen must be comfortable to both the parties. Also make sure that you are communicating directly to concerned authorities not to mediators.

2.Negotiating Process

a. Generating the best deal for you. Always make sure that you got the most from the negotiation. Even if you have some compromise, the over all outcomes are in your favor. This should be the first policy of your whole negotiation.

b.Communicate directly to concerned stakeholder. Whatever your communication media be (face to face, telephonic, mail or online), always talk directly to the concerned authorities. If you are communicating to middle man (like secretaries or receptionists) you can never final a deal.

c. Let them speak first. This is helpful in some cases when the other party is making more favorable deal than what you have thought of. If you speak first they will change their tone. This is also applicable in your side.

d. Setting wins conditions of the other party. See what points are WIN conditions for the other party. Sometimes other party is more concerned about some less useful part of agreement; you can take advantage of it by popping up that portion as core issue and make them feel that they have won the agreement.

e. Be trust worthy. Do not try to dodge your opponents in negotiation, try to make them understand you and trust you. And when I said "make them" I never mean "fake them", so, you must be trustworthy and this is one quality that will help you most in getting the 'YES'.

3. The aftermath of negotiation

a. Nothing should be considered as a full and final in any agreement. Verify that the outcomes are exactly according to the agreement of negotiation, if they are not, we can go for a further step in the negotiations.

b. Analyze the negotiation. We can learn from old experiences, this also works in negotiation. Try to analyze whole process, "what worked what not", "what went wrong" these should be analyzed, so that we can improve our skills for future negotiations.

New research in the field

Now some more topics are added and being researched in negotiation skill. One of such topic is "adding emotions to win negotiations." Anything that makes you win your goals must be considered in business dealings, so this can also be tried.

Conclusion

Negotiation is something that can only be won by will power and confidence. Your thinking of better alternatives and understanding the limits of your negotiation can help you most. Any negotiation is called successful only when both parties win, "Winner takes all" approach is not a better negotiating policy.

Negotiation: The Win Win Strategy
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Manu Dutt Tripathi is a young energetic computer professional working as a consultant DBA in leading IT firm of Bangalore, India. He has a master degree in computer science. He is an active member of many technical forums and help users and computer professional through out the world.

Reasons for Globalization

Most companies move their business operations to foreign countries by going global. They take their business overseas for different reasons. These companies adopt the reactive or defensive approach to stay ahead of the competition. A few of them take the proactive or aggressive approach to accomplish the same purpose. A majority of them choose to adopt both approaches to avoid a decrease in their competition. In order to remain competitive, companies move as quickly as possible to secure a strong position in some of the key world or emerging markets with products customized for the need of the people in such areas in which they plan to establish. Most of these world markets are attracting companies with new capital investments with very good incentives. Some of the reactive or defensive reasons for going global are:

(1) Trade Barriers

(2) Customer Demands

Reasons for Globalization

(3) Globalization of Competitors

(4) Regulations and Restrictions

In the case of trade barriers, companies move from exporting their products to manufacturing them overseas in order to avoid the burden of tariffs, quotas, the policy of buy-local and other restrictions that make export too expensive to foreign markets. Companies respond to customer demands for effective operations and product assurance and reliability, or/and logistical problem solutions. Most foreign customers, who seek accessibility to suppliers may request that supply stay local in order to enhance the flow of production. Companies usually follow that request to avoid losing the business. For the globalization of competitors, companies are aware that if they leave companies overseas too long without challenge or competition, their investments or foreign operations in the world market may be so solid that competition will be difficult. Therefore, they try to act quickly. Most companies' home government may have regulations and restrictions that are so inconvenient and expensive, thus limiting the expansion, encroaching in the companies' profits, and making their costs uncontrollable. Hence the reason for the companies moving to different market environment with few foreign restrictive operations. The proactive or aggressive reasons for going global are:

(a) Growth opportunities

(b) Economies of Scale

(c) Incentives

(d) Resource assess and Cost Savings

Many companies will prefer to invest their excess profits in order to expand, but sometimes they are limited because of the maturity of the markets in their area. Therefore, they seek the overseas new markets to provide such growth opportunities. So, these companies, in addition to investing their excess profits, also try to maximize efficiency by employing their underutilized resources in human and capital assets such as management, machinery, and technology. Companies seek economies of scale in order to achieve a higher level of output spread over large fixed costs to lower the per-unit cost. They also, want to maximize the use of their manufacturing equipment and spread the high costs of research and development over the product life cycle. Some of the developing countries that need improvement and development through capital infusion, skills, and technology voluntarily provide incentives such as fixed assets, tax exemptions, subsidies, tax holidays, human capital, and low wages. These incentives seem attractive to these companies due to their increase in profits and reduction of risks. Caution: The repatriation of profits and foreign exchange risks due to instability in leadership of these developing countries should be put into consideration in negotiation. Access to raw materials and low operational costs in financing, transportation, low wages, lower unit costs, and power are attractive in terms of resource access and cost savings. Most companies move their headquarters to overseas to avoid their respective home countries' high taxes and other costs associated in business operation in those countries.

Companies need to develop strategies, design and operate systems, and also work with people, different companies, and countries around the world in the form of strategic alliance to ensure sustained competitive advantage. Global management and management functions are usually formed by the prevailing conditions and ongoing stable and unstable developments in the world. A few countries take advantage of these companies, but when companies become aware that they are being used, they should then learn how they can be useful in that different cultural environment in order to make a lot of profits.

Reasons for Globalization
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Dr. Sidney Okolo is a professor, consultant, strategist, and Africa expert. He is affiliated to several universities, the Managing Director of International Business Associates, a management consulting firm, and also the President of Virtual Classrooms Institute, an online education solution.

Among other things, he engages in all aspects of learning, knowledge, organization and human change. His focus is on leadership, management, entrepreneurship, profit engineering, human potential, excellence, achievement, business strategy, research and development. Product management, change management, conflict management, athlete management, marketing, business development and operations. He works with clients to adapt to change due to change in factors of production, technology, goods and services. He engages clients in training, retraining, development, skills enhancement, association, behavior modification, ways of thinking, and attitude adjustment. In addition to his work in the United States, his focus is also on developing countries in the continent of Africa, their leadership, culture, economic and market structure, community planning and development, and his coined the phrase; "AFRICAN PIES", which stands for: poverty, instability, ethnicity, and sectarianism in Africa.

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