The four basic phases of any business negotiation

Four Seasons

Four Seasons

 

We all know the four seasons and we have our preference for each. I recall in the movie “Being there” with Peter Sellers, he plays the role of an uncomplicated gardener who is sought out for his apparent wisdom. When asked a question relating to some investment advice, the dialogue with the President went something like this:

President “Bobby”: Mr. Gardner, do you agree with Ben, or do you think that we can stimulate growth through temporary incentives?

[Long pause]

Chance the Gardener: As long as the roots are not severed, all is well. And all will be well in the garden.

President “Bobby”: In the garden.

Chance the Gardener: Yes. In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.

President “Bobby”: Spring and summer.

Chance the Gardener: Yes.

President “Bobby”: Then fall and winter.

Chance the Gardener: Yes.

Benjamin Rand: I think what our insightful young friend is saying is that we welcome the inevitable seasons of nature, but we’re upset by the seasons of our economy.

Chance the Gardener: Yes! There will be growth in the spring!

Benjamin Rand: Hmm!

Chance the Gardener: Hmm!

President “Bobby”: Hmm. Well, Mr. Gardner, I must admit that is one of the most refreshing and optimistic statements I’ve heard in a very, very long time.

[Benjamin Rand applauds]

President “Bobby”: I admire your good, solid sense. That’s precisely what we lack on Capitol Hill.

 

 

Humoristic as it is, a great truth is spoken in jest. Any process of negotiation can be reduced to the essence of four phases.

1.            Prepare

This phase if probably the most neglected. Often a party thinks the deal means one thing but if the preparation was done beter, the true extent of events will be clear. Know wat you are negotiating about. Know the background or historical events if it is relevant, understand the qualities of the product, be aware what is happening in the market with similar items. Too much information is never a drawback.

 

Let us use that example of buying a classic MGA sports car. One should know which ones are more desirable by looking at the evaluations in classic car magazines and talking to owners of such cars. You will soon find out that disc bakes are preferred above drum brakes and that the five bearing BMC engine is much more sturdy that the three main bearing ones. Roadsters fetch much higher prices that the coupe but then again the roadster roof leaks and needs quite some assembling when required.

2.            Discuss

It is always advisable to talk about your respective view and stances in respect of the topic of negotiation without giving anything away you don’t want to.

So in line with our example one should ask how long the present owner had the car, what he did to it in terms of maintenance and modifications and if the engine and chassis numbers match. Repairs are expensive and any preventative maintenance is a plus.

Let us suppose the person. knows very little about the car as it is part of aan deceased estate you might be on to a “find”.

Get as much information about the product or service under discussion and cross reference it in your head with what you established in your preparation in step 1.

 

 

  1. Propose

The propose phase is the most difficult in my opinion. It is here where the groundwork for the transaction is made and the key are these of the words “if I do this and that, will you then…”

So you discovered the MGA is a rare twin cam model that is not in a running condition. You are unfazed by this as later modification made the engines much more reliable.

“I will buy the car in it’s present as-is condition, if you are prepared to reduce the price to ..”

4.            Bargain

And now the final phase. Concluding the deal. If the parties reach agreement the finals aspects of the deal is clarified and then reduced to writing and legally signed. Now you have a deal.

 

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