From idea to business idea
How the market supports my business idea
Getting ready for the market
Financing - Profit analysis
Do I need other skills?
Tools & References
Stages in negotiation
In today’s increasingly competitive marketplace, effective negotiation skills are essential to the smooth running of any business.
Negotiation is an integral part of creating value for a business. Managers of micro businesses need to be able to negotiate with many different types of people in various business situations.
Whether you are faced with business transactions or personal interactions, negotiation is the best approach to deal effectively with conflicting interests. The outcome of a negotiation has the potential to change the course of our business.
The negotiation process can essentially be understood as a six-step process.
I. Preparation
Preparation is crucial to the success of the negotiation process. Being well-prepared builds confidence and gives an edge to the negotiator.
Goals - Defining and prioritizing your objectives is essential in order to have a clear idea of what you want from the other party. What are you trying to reach during the negotiation? what do you think the other person's objectives/positions are?
Trades – Define what might you be able to offer or ask for? What can the other party provide you?
Research - Gather as much information as possible about the subject to be negotiated.
Alternatives – In case you really can't achieve your goals, what would be your best option to a negotiated agreement?
Relationships – How effective have been negotiations with the other party in the past?
Expected outcomes – What precedents have been set? Based on those and on your current knowledge, what seems to be the most likely outcome?
Consequences – What do you and the other party stand to get or lose?
Power – Which party holds the power? How will this affect the negotiation?
Possible solutions – What do you consider to be a reasonable outcome of the negotiation?
II. Discussion/building relationship
This stage is the process of finding out about each party’s needs, starting with opening offers. These need to be realistic, otherwise there will be little possibility for an acceptable result.
III. Clarifying goals & First offer
From the discussion, the goals, interests and viewpoints of both sides need to be clarified.
This is an essential part of the negotiation process, without it misunderstandings can occur which may cause barriers to reaching a beneficial outcome.
IV. Negotiate towards a Win-Win Outcome
This stage focuses on what is called a 'win-win' outcome where both sides feel they have gained something positive through the process of negotiation and both sides feel their request has been taken into consideration.
V. Agreement
Agreement can be achieved once understanding of both sides’ viewpoints and interests have been considered.
Any agreement needs to be made perfectly clear so that both sides know what has been decided.
VI. Post agreement
Things to reflect on at this stage:
Negotiation is an integral part of creating value for a business. Managers of micro businesses need to be able to negotiate with many different types of people in various business situations.
Whether you are faced with business transactions or personal interactions, negotiation is the best approach to deal effectively with conflicting interests. The outcome of a negotiation has the potential to change the course of our business.
The negotiation process can essentially be understood as a six-step process.
I. Preparation
Preparation is crucial to the success of the negotiation process. Being well-prepared builds confidence and gives an edge to the negotiator.
It involves the following activities:
Goals - Defining and prioritizing your objectives is essential in order to have a clear idea of what you want from the other party. What are you trying to reach during the negotiation? what do you think the other person's objectives/positions are?
Trades – Define what might you be able to offer or ask for? What can the other party provide you?
Research - Gather as much information as possible about the subject to be negotiated.
Alternatives – In case you really can't achieve your goals, what would be your best option to a negotiated agreement?
Relationships – How effective have been negotiations with the other party in the past?
Expected outcomes – What precedents have been set? Based on those and on your current knowledge, what seems to be the most likely outcome?
Consequences – What do you and the other party stand to get or lose?
Power – Which party holds the power? How will this affect the negotiation?
Possible solutions – What do you consider to be a reasonable outcome of the negotiation?
II. Discussion/building relationship
This stage is the process of finding out about each party’s needs, starting with opening offers. These need to be realistic, otherwise there will be little possibility for an acceptable result.
III. Clarifying goals & First offer
From the discussion, the goals, interests and viewpoints of both sides need to be clarified.
This is an essential part of the negotiation process, without it misunderstandings can occur which may cause barriers to reaching a beneficial outcome.
IV. Negotiate towards a Win-Win Outcome
This stage focuses on what is called a 'win-win' outcome where both sides feel they have gained something positive through the process of negotiation and both sides feel their request has been taken into consideration.
V. Agreement
Agreement can be achieved once understanding of both sides’ viewpoints and interests have been considered.
Any agreement needs to be made perfectly clear so that both sides know what has been decided.
VI. Post agreement
Things to reflect on at this stage:
- What went well? Why?
- What didn’t go so well? Why?
- Were you sufficiently well prepared?
- Were you satisfied with the outcome?
- What will you do differently next time?
