Negotiation Preparations and Strategy

Many components of life are a negotiation, from deciding where you and your spouse, friends, or boyfriend/girlfriend want to dine out for dinner to buying a car. In business, the failure to effectively participate in the negotiation process can cause an enterprise or investment to fail. A common fallacy is to oversimplify the negotiation process and not practice the art of negotiation because negotiation is seen merely as “basic common sense.” In reality, negotiation is built on the hard work of emotional discipline and preparation, and the practices discussed below will assist you in developing these skills.


Preparing for a negotiation is critical if you want to win the negotiation, or at least not get completely steamrolled. You can focus your negotiation preparation by studying the opposing side, your own defined objective and price range for the negotiation, and the product or service you are seeking if you are a buyer.

Studying the other side of the negotiating table can reveal a lot before the negotiation even begins. It can reveal weaknesses and strengths in the bargaining position of the opposing party. Take advantage of your connections. If you know people who have dealt with the opposing party before, discuss with them the opposing party’s negotiation tactics. Negotiation tactics are often recycled as part of an individual’s patterns and styles. Also keep in mind that an experienced opposing party will conduct a similar study on your side. So be prepared for them to know your tactics.

Another component of this opposing party preparation is ensuring that the party that you will be speaking with is authorized to make the binding commitments that you seek. This is akin to the car salesman maneuver of “let me see what my sales manager says.” Prevent this tactic by researching your opposing party and asking them outright if they have authority in the early stages of negotiation.

Preparation is also required in setting a defined objective and price range before entering the negotiation. The defined objective or price range should be supported by objective criteria such as industry rates. If it’s not objective, you risk getting laughed out of the negotiation for lack of a basis. You will also have limitations on your end imposed by management, policies and procedures, budgeted amounts and other factors outside of your control. Learn these limitations well before you step up to the negotiating table. The defined objective or price range should also factor in contingencies and should not limit you to one rigid offer. Rigidity is generally incompatible with a truly successful negotiation unless you truly have that much of an upper hand on the other party, but I wouldn’t count on it.

Further, studying a product or service as a buyer helps you to generate objective criteria in addition to protecting you from being subject to deceitful negotiation techniques. Sellers may attempt to employ deceitful tactics if they perceive that the buyer has not done their homework. This can be accomplished by omitting certain details, bluffing or misrepresenting details. The opposing party may employ these deceitful techniques in order to corner you into a buying decision that is driven by emotion and not objective facts.


Studying your potential strengths in the negotiation is another important component to a successful negotiation. These strengths will be specific to your circumstances, such as being the only provider of a certain good or service or offering a better way to capitalize on the current market conditions. For instance, if you are buying the last vacant lot in a burgeoning commercial district, then the seller has significant leverage.

Your preparation in the area of developing objective criteria is also a strength to be leveraged in a negotiation. Such information can reveal whether the other party is prepared or not.  This can affect their reliability during the negotiation, especially if the negotiation has multiple parties and opposing sides involved, and their unpreparedness can make it easier to uncomfortably put them on the spot.

Negotiating Strategies

The field of negotiation is filled with aggressive tactics such as the bait and switch and the take it or leave it offers. While these tactics may often put the other side on the defensive, they also may destroy relationships. There are multiple strategies out there that can be used without killing or undermining relationships.

The first offer often sets the tone for the remainder of the negotiation. Many negotiators often throw out assertive first offers to test the waters and then retreat back to a number or stance that is more acceptable. This first offer strategy is often more persuasive if you have effectively prepared and can communicate why your first offer should be accepted. If you are entering a negotiation as a buyer, the maximum amount you are willing to pay should never be disclosed. If a seller has this information, then they may attempt to convey a good or service that is substandard or start their first offer at a point where you may never recover.

Another strategy is to find ways to integrate additional items into your negotiating request that you may not necessarily really care about. This provides you with the room in a negotiation to concede items without sacrificing your core objectives and the things you really care about. For example, if you are a landlord negotiating with a tenant, you may want to consider adding in fees to the base rent for services to the property such as landscaping. When you eventually offer a reduction in rent in exchange for the landscaping fee, this could establish cooperation and goodwill in the negotiation. However, keep in mind that this tactic is not always helpful when the room for price fluctuations in a negotiation is cramped.

Nonverbal communication is also a part of negotiation that must be strategized. Tone of speech, body movement and eyes can reveal a lot about whether you are close to a break through or are stuck at an impasse. If the tone of the negotiation is drifting toward impasse, then consider halting the negotiation and communicate the desire to walk away. This may cause the other party to be more willing to strike a deal due to pressures on their side (i.e. patience is a virtue). Conversely, do not communicate or imply that you are under pressure to make a deal to the other party. This is a vital weakness that could destroy your advantages.


            Negotiation is a critical skill to be developed by business owners. The success of your business or investment will be a product of the terms and services acquired through some form of the negotiation process.

Find out more about how the legal professionals at Dodson Legal Group can assist you in your business negotiations and place your negotiated terms into a legally enforceable agreement. Call 844-4DODSON for your consultation today.