Framework for Contract Negotiations
Negotiation is most frequently thought of as a professional term when, in reality, it's a part of everyday life. When people negotiate, they come together to discuss their needs and attempt to reach a compromise that addresses those needs. Whether negotiating a sales contract, where to go out to eat, the price of a car, or who does the dishes, it's all the same process.
Most people have more experience with negotiation than they give themselves credit for, but everyone, whether executive, associate, contractor, entrepreneur, student, or homemaker, benefits from understanding the negotiation process. Savvy negotiators can bring about their desired outcomes by building a logical framework for negotiations.
Process and Strategy
The negotiation process can be outlined in five steps: prepare and plan; define ground rules; clarify and justify the proposal; bargain and problem solve; and, finally, close and execute the deal. Negotiators employ various tactics and strategies throughout the process to build the framework for their desired outcome.
One effective strategy for achieving a desired outcome in negotiations is leaving room to bargain in the beginning and concede incrementally as talks move towards an agreement. As negotiators prepare and plan, it's important to identify the acceptable margin of value by evaluating the value they would like to receive, the value they need, and the lowest value they can accept. Negotiators can then lead with the value they want and ultimately concede to something close to the middle.
Another strategy negotiators employ is to identify the best alternative to a negotiated agreement or BATNA during the plan and prepare stage. The BANTA guides negotiators towards their next steps if negotiations come to an impasse and is the next best option outside of the current negotiation for bringing about the desired outcome.
Knowing when to walk away from failing negotiations can be difficult. However, if the money isn't right or the terms are too demanding then the deal may not be a good fit and could have negative long-term impacts on the business. Therefore, it's not always a loss when negotiations fail, and having a plan B ready in case they do gives negotiators a strategic advantage.
The sales contract itself plays an important part in the outcome of negotiations. Presenting a sales contract that clearly and completely details the terms of the agreement, including price point, description of goods or services, delivery, deadlines, and other provisions, aids in the negotiation and fulfillment of the agreement. For the most professional sales contracts and presentation materials, be sure to use convert JPG to PDF.
Negotiation Skill Set
Negotiation is a skill set that includes a variety of abilities, such as preparation, planning, communicating, bargaining, and executing, which are valuable personally and professionally. People from all walks of life benefit from cultivating their negotiation skills.
For more information about sales contracts and negotiation, the chamber of commerce is the place to go and offers a wealth of resources, including networking opportunities, knowledge of the local community, and business directories.
Join your local chamber of commerce today.
This Hot Deal is promoted by Kendallville Area Chamber of Commerce.