by Jacqueline Trovato

Created on: July 30, 2009   Last Updated: July 31, 2009

Preparing for Business Negotiations

Any experienced negotiator knows to do their homework before a negotiation. Obviously, homework takes time and costs, money and the smaller the deal; the less homework can be justified. But within the limits of time and budget, the good negotiator does as much homework as possible.

A Homework Checklist

Subject matter. The good negotiator will be thoroughly knowledgeable about the subject of negotiation. If they are not an expert on the topic, they must quickly learn as much as they can on the matter

The negotiator's organization. The fully prepared negotiator searches his whole organization for carrots and sticks. The more carrots and sticks, the more leverage. Go on a leverage hunt. Who else in the organization has something the other side might want? Purchasing, credit, sales, and other departments should be polled to insure that no potential trade offs are being overlooked or wasted. Any handy requirements to fulfill, adjustments to make, or disputes to resolve can become trading ammunition.

The counterpart's organization. What's their history, financial situation, political situation, culture, and reputation? What are their short-and long-term goals What does their organization chart look like? Who reports to whom? What's their deadline? Are there potential cross-cultural negotiating issues?

The individual counterpart. What's the counterpart like? What is his reputation? What is his position? What are his interests and possible secondary interests? What concessions-obvious and obscure-might appeal to him? Is he known to use specific negotiating techniques (such as starting high, limited authority, good guy-bad guy)? Does he tell the truth? Does he keep his word? Has he written anything that might reveal some information? What personal interests might he have that could be used as small-talk material? Is he from a different culture and/or country?

Setting an envelope*. More than anything else, homework is about Envelope-setting. It's by far the most important homework task. Everything learned while doing homework will ultimately be reflected in the envelopes. If there are multiple issues, envelopes must be set for each issue and given a relative value. If the negotiator takes the time to determine his envelope with care, he's almost surely going to do most of the important things right. He'll start high. He'll trade concessions. He'll make each concession smaller than the one before. He'll nibble (go for some small

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