Winning Negotiations in 10 Easy Steps

If you're like most people, you dread the prospect of sitting across from that salesman, or vendor, or banker, trying to negotiate a "deal." Here are ten tips on how to prepare a negotiating strategy, make the process less intimidating - and make you more likely to get what you want.

1. Do your research -- Depending on the type of negotiation, there are many resources available to tell you what other people have paid for similar items. If it's a bank loan you're after, look at the business section or ads in your local newspaper to see what interest rates are being offered. If it's for some other product or service, surf the web, comparison shop, call others in your industry to get recommendations. If it's a car, there are several good websites with lots of information. Once you've armed yourself with information, you're ready for the next step.

2. Set your goals -- Ask yourself: What is the most important outcome for me? You should have your desired outcome in mind and know why it is important to you. If you are negotiating to buy a car, you should know if it's most important to you to have a low monthly payment, a low interest rate, or a car with special features. Then - and this is the most critical part of any negotiation - you must be prepared to stick to it! Yes, you must be prepared to walk away if you don't get the most important thing. Knowing your "bottom line" and being determined to stick to it will make you a successful negotiator.

3. Determine your style -- Your personality will dictate what negotiating style is in your comfort zone. There are two basic negotiating styles, competitive and cooperative. Competitive negotiation is one-sided and focused on "what's good for me," while cooperative negotiators try to come up with a solution that is "win-win," in other words, where both sides benefit. Many people can be competitive in one situation, and more cooperative in others. Think about yourself and the situation you will be facing, then decide if you will more comfortable being competitive or cooperative so you can plan your strategy.

4. Plan a strategy -- Make a list of all negotiable elements: price, timing, interest rate, features, downpayment, term, etc. Then rank these elements by order of importance. This will show you what areas you are willing to negotiate. For example, say you want a car payment of $300 a month and only want to spend $1,000 as a downpayment. In order to get the deal you want most, you may have to accept fewer features, a longer term for your loan, or a higher interest rate. Or if you really want the car with the 10-disc CD-changer and leather seats, you may have to make a larger downpayment, or pay a higher interest rate. It depends on what matters most to you. But knowing what you MUST HAVE versus what you would LIKE is an important distinction that should be made before you walk into any negotiation.

Whenever possible, you should also try to evaluate your opponent's position and try to determine, as best you can, what is going to be most important to them. You can't always know, but you should be able to have a pretty good idea.

Once you have your list of negotiable elements, it's time to determine your "opening bid." The opening bid should reflect the most important items and your absolute best outcome. It's usually best to start out asking for everything on your "must-have" list, plus one or two items that can be negotiated away. Don't be afraid to ask for the moon! Sometimes, what you consider an extraordinary request is not all that important to the other side. The word "No" is not the end of any successful negotiation. Always try to keep some options open and allow for the needs and goals of the other side.

5. Put your goals and desired outcome in writing -- Arrive at any negotiating table with your goals and "bottom line" in writing. Make a list of "must have" items and what is negotiable. Refer to it often as the conversation progresses. It will keep you focused on what you want to achieve and prevent you from being side-tracked from what is important. Take notes on what the other side stresses as important to them. If it takes several conversations to reach an agreement, keep your notes handy and review each time a new negotiation session takes place. But a word of caution: don't share your written notes with the other side. You will put yourself at a distinct disadvantage.

6. Pay attention -- Successful negotiations require full attention. Do not allow your cellphone to interrupt, do not let the other side distract you with non-essential items designed to get your to accept less than what you really want. On the other hand, if the other side offers something that you had not considered in your strategy planning, keep an open mind. Ask to take a few minutes to consider any new items and see if they fit into your ultimate goals. Allow yourself to be creative, but always refer back to your written goals and outcomes so you do not lose sight of your objective.

7. Deal in good faith -- In order to be a successful negotiator, you must have a serious interest in making the process work. If you have honestly evaluated your needs and goals, and the other party knows their bottom line, both parties can almost always come to an agreement.

8. Enjoy the game -- Keep your goals and objectives in mind, then make it a game. Try to see how many extras you can get for the same price. See if you can do better than your goal. But don't be greedy. Be satisfied when you get what you want.

9. Hire help if you need it -- If all else fails and you just don't think you can negotiate to win what you want, ask someone else to negotiate for you. There are companies out there who will negotiate that new car deal for a fee, or get a package-deal on your new stainless steel appliances. In many situations, like negotiating a commercial lease, a real estate agent or attorney can assist you. Professional negotiators acting on your behalf are much less likely to be swayed by distracting tactics and enticements because you will have discussed your goals and desired outcomes with them and they will authority to get you only what you want, not bargain for things that do not matter to you. They do not have emotional strings to be pulled. They are likely to be results-oriented.

10. Get any agreement in writing -- Do not leave a negotiating table without a written memorandum of agreement that details what was decided. Too many times, the parties walk away from the table and have second thoughts, or forget some key element. If you are able to put the final agreement in writing, do it. Don't depend on the other side if it can be avoided. And of course, before you sign any document with legal consequences, you should ask your attorney to review it.

Good luck!