How to Negotiate like a Pro!

Whether it’s buying a house, getting the best business deal, disputing your cell phone bill, haggling in a shop, or paying off your credit card, the basic principles of negotiation are the same. Just remember that even the most skilled and experienced negotiators will feel discomfort when negotiating. The only difference is a skilled negotiator has learned to recognize, and suppress the outward signs of these feelings.

Here are some useful steps, tips and warnings on how to negotiate like a pro!

Steps

1. Decide on your breakpoint (the lowest amount or cheapest price you will accept in the deal, the “worst-case scenario”).
   • If you are representing someone else in a negotiation, get your client’s agreement in writing to a target deal before hand. Otherwise, when you get them a great deal, they may decide they don’t like it after all. Your credibility is the one that takes the hit.
2. Know what you’re worth. How much does the other party need you? Is what you’re offering hard to come by, or a dime a dozen? How desperate are they? Who needs who more? And if you need them more than they need you, how can you give yourself an edge?
3. Plan how you will move in your proposals. Your moves should be in ever-decreasing steps, which will give the impression that you are being “bled” and there is increasingly less bargaining range to be had.
4. Open extreme. Open at your maximum sustainable position (the most you can logically argue for). Ask for what you want, and then some. When starting off a negotiation, don’t be scared to make an outrageous request. You never know–you might get it! And what’s the worst that could happen? They might think you’re vain, or delusional; but they’ll also know you have guts, and you value yourself, your time, and your money. Are you worried about insulting them, especially if making a very low offer to buy something? Remember that this is business, and if they don’t like your offer, then can always counter-offer. Just be bold. If your opening offer is too close to your breakpoint, then you will not have enough bargaining range to concede to the other party as a way of giving satisfaction.
5. Offer or request extras. What else can they give you that is of low value to them, and high value to you? Or what can you offer that is of low value to you, and high value to them? This is why retail stores offer employee discounts. Think along the lines of bartering, andbe creative . What do you have a lot of, or what can you offer with ease, that they would find valuable? Make a list of your skills and your stuff. Calculate how much they cost you, then find out how much they sell for.
6. Research their costs (retail versus wholesale). Let’s say you’re doing business with a winery, for instance, and they want to pay you 5000 to perform there. You want 7500. Why not suggest that they pay you 5000 and give you a 3500 bottle of wine? It’s worth 3500 bucks to you because that’s how much you’d have to pay to buy it, but it costs them much less to produce that bottle. (This is, of course, assuming you like their wine!) Or, you can ask them for a 5% or 10% discount on all their wine. Presuming you buy wine regularly anyway, you’ll save money, and they’ll still make money from your purchases (just not as much).
7. Offer to pay up front. An up front payment is always desirable to a seller, especially in situations where most people do not pay up front (such as car dealerships). As the buyer, you can also offer to buy in bulk, paying in advance for a certain number of products or services, in exchange for a discount. One tactic is to come into the negotiation with a pre-written check; ask to buy the product or service for that amount, and tell them that’s your final offer. They may accept it, since the lure of an immediate payment is hard to resist. Finally, paying in cash rather than with a check or credit card, can be a useful negotiation tool because it reduces risk & transaction cost to the seller.
8. Shop around, and bring proof. If you are buying a car and you know the other dealer will sell you the same car for $200 less, tell them so. Tell them the name of the dealer and salesman. If you’renegotiating a salary and you’ve researched how much people in equivalent positions get paid in your area, print out those statistics and have them handy.
9. Always hold back a closer or two: One or two facts or arguments you can use when you sense the other side is close to a deal but needs that final push. If you are a broker and your client is going to buy this week whether this seller is willing or not, that is a great deal closer.
10. Be ready to walk away. You know what your breakpoint is, and you know if that’s not what you’re getting. Be willing to walk out the door if that’s the case. You might find that the other party will call you back, but you should feel happy with your efforts if they don’t.

Tips

• If they surprise you with a very appealing offer, don’t let on that you expected something less favorable.
• Preparation is 90% of negotiation. Gather as much information about the deal as you possibly can, evaluate all the key variables, and understand which concessions you can trade.
• Even when you are unsure, speak with authority, speaking louder than usual and giving the impression that you have done this many times before will close deals with people who are not experienced.
• Avoid soft exposing language when making your proposal. E.g. “the price is -about- £100″ or “I’m looking for £100″. Be firm in your proposals – “the price is £100″ or “I’ll give you £100″

Warnings

• Never talk about their figure or price, as this subconsciously validates it- always talk about your figure instead.
• Acrimony is a deal killer. People will refuse deals just because they are pissed. This is why divorces drag on for years. Avoid hostility at all costs. Even if there has been hostility in the past, start each contact upbeat, positive, don’t hold a grudge.
• Watch your body language – a skilled negotiator will pick up on non-verbal signals which may give away your true feelings.
• Never negotiate after receiving an unscheduled phone call. They’re ready but you are not. State that you are not currently able to talk and ask to reschedule. This will give you time to plan ahead about responses to questions and to perform simple research.
• If someone is totally unreasonable, don’t negotiate. Tell them to keep you in mind if they come down in price (or whatever). Negotiating when they are way out of line starts you out at way too weak a position.

“A successful investor is not one who never loses, but who stays invested in the market.”

Contrary to popular belief, one does not have to earn a lot of money to become wealthy. Here are some simple Mantras to secure your financial freedom!

Dont procrastinate on wealth creation – Many people procratinate on saving money. They always wait for the next year, next increment, next bonus to start savings and then the cycle repeats again. You do not need to start investing large amounts, start small. Even a years delay makes a huge difference as wealth compounds with time.

Prepone Investments, Postpone expenses - Set targets on how much you want to invest and invest it as soon as you get the money. Do not spend first and save (whatever is left) later.

You do not need crores – It’s a myth that you need lots of money to start investing. Even small amounts over time become large due to the magic of compounding.

Go for the long term – Especially in Equity it is important to invest for the long term. They give the best returns in the long term. For short term look at debt.

Invest Regularly – This is very important. You can invest in SIP’s which average out your risk. For eg. investing 10,000 rupees a month would yield 1 crore in 15 years at a annual rate of 20%.

Don’t link your lifestyle to stock market - When the stock market is rising, our notional wealth increases. Soon we start believing that growth of our wealth is real and long term. This false state of suddenly feeling wealthy leads to change in lifestyle. One of the perils of increasing expenses on your lifestyle during stock market boom is that we get used to comforts and luxuries in life. When economic situation turns bad we will then struggle to curtail our expenses. In fact in reality while markets are rising, we should control our expenses and let our wealth grow. On the other hand when equity markets are down, our wealth is not growing in real terms. Things are also cheaper generally during such periods.

Ignore Rumours - If you are confident about the company you have invested in, leave it. Ignore rumours.

Research & Learn – Learn about budgeting, credit, and debt. Learn how credit cards work! If you get into debt early it can sabotage your progress. Whenever you buy a stock or fund, don’t do it on a tip or whim, but do solid research to back up your buy. Investing can be very interesting and rewarding!

“Remember, we all stumble, every one of us. That’s why it’s a comfort to go hand in hand.” - Emily Kimbrough

Just as important as what you should do is what you shouldn’t do — and I’m sure many of you have stepped into these pitfalls yourselves. I know I have. I’ve learned from my mistakes, and have learned to recognize when I’m making a fatal error, and how to correct it.

If you can avoid these seven things, and focus instead on doing the four things above, you should have a strong relationship. I’m not going to guarantee anything, but I’d give you good odds.

1. Resentment. This is a poison that starts as something small (”He didn’t get a new roll of toilet paper” or “She doesn’t wash her dishes after she eats”) and builds up into something big. Resentment is dangerous because it often flies under our radar, so that we don’t even notice we have the resentment, and our partner doesn’t realize that there’s anything wrong. If you ever notice yourself having resentment, you need to address this immediately, before it gets worse. Cut it off while it’s small. There are two good ways to deal with resentment: 1) breathe, and just let it go — accept your partner for who she/he is, faults and all; none of us is perfect; or 2) talk to your partner about it if you cannot accept it, and try to come up with a solution that works for both of you (not just for you); try to talk to them in a non-confrontational way, but in a way that expresses how you feel without being accusatory.
2. Jealousy. It’s hard to control jealousy if you feel it, I know. It seems to happen by itself, out of our control, unbidden and unwanted. However, jealousy, like resentment, is relationship poison. A little jealousy is fine, but when it gets to a certain level it turns into a need to control your partner, and turns into unnecessary fights, and makes both parties unhappy. If you have problems with jealousy (like I once did), instead of trying to control them it’s important that you examine and deal with the root issue, which is usually insecurity. That insecurity might be tied to your childhood (abandonment by a parent, for example), in a past relationship where you got hurt, or in an incident or incidents in the past of your current relationship.
3. Unrealistic expectations. Often we have an idea of what our partner should be like. We might expect them to clean up after themselves, to be considerate, to always think of us first, to surprise us, to support us, to always have a smile, to work hard and not be lazy. Not necessarily these expectations, but almost always we have expectations of our partner. Having some expectations is fine — we should expect our partner to be faithful, for example. But sometimes, without realizing it ourselves, we have expectations that are too high to meet. Our partner isn’t perfect — no one is. We can’t expect them to be cheerful and loving every minute of the day — everyone has their moods. We can’t expect them to always think of us, as they will obviously think of themselves or others sometimes too. We can’t expect them to be exactly as we are, as everyone is different. High expectations lead to disappointment and frustration, especially if we do not communicate these expectations. How can we expect our partner to meet these expectations if they don’t know about them? The remedy is to lower your expectations — allow your partner to be himself/herself, and accept and love them for that. What basic expectations we do have, we must communicate clearly.
4. Not making time. This is a problem with couples who have kids, but also with other couples who get caught up in work or hobbies or friends and family or other passions. Couples who don’t spend time alone together will drift apart. And while spending time together when you’re with the kids or other friends and family is a good thing, it’s important that you have time alone together. Can’t find time with all the things you have going on — work and kids and all the other stuff? Make time. Seriously — make the time. It can be done. I do it — I just make sure that this time with my wife is a priority, and I’ll drop just about anything else to make the time. Get a babysitter, drop a couple commitments, put off work for a day, and go on a date. It doesn’t have to be an expensive date — some time in nature, or exercising together, or watching a DVD and having a home-cooked dinner, are all good options. And when you’re together, make an effort to connect, not just be together.
5. Lack of communication. This sin affects all the others on this list — it’s been said many times before, but it’s true: good communication is the cornerstone of a good relationship. If you have resentment, you must talk it out rather than let the resentment grow. If you are jealous, you must communicate in an open and honest manner to address your insecurities. If you have expectations of your partner, you must communicate them. If there are any problems whatsoever, you must communicate them and work them out. Communication doesn’t just mean talking or arguing — good communication is honest without being attacking or blaming. Communicate your feelings — being hurt, frustrated, sorry, scared, sad, happy — rather than criticizing. Communicate a desire to work out a solution that works for you both, a compromise, rather than a need for the other person to change. And communicate more than just problems — communicate the good things too (see below for more).
6. Not showing gratitude. Sometimes there are no real problems in a relationship, such as resentment or jealousy or unrealistic expectations — but there is also no expression of the good things about your partner either. This lack of gratitude and appreciation is just as bad as the problems, because without it your partner will feel like he or she is being taken for granted. Every person wants to be appreciated for all they do. And while you might have some problems with what your partner does (see above), you should also realize that your partner does good things too. Does she wash your dishes or cook you something you like? Does he clean up after you or support you in your job? Take the time to say thank you, and give a hug and kiss. This little expression can go a long way.
7. Lack of affection. Similarly, everything else can be going right, including the expression of gratitude, but if there is no affection among partners then there is serious trouble. In effect, the relationship is drifting towards a platonic status. That might be better than many relationships that have serious problems, but it’s not a good thing. Affection is important –everyone needs some of it, especially from someone we love. Take the time, every single day, to give affection to your partner. Greet her when she comes home from work with a tight hug. Wake him up with a passionate kiss (who cares about morning breath!). Sneak up behind her and kiss her on the neck. Make out in the movie theater like teen-agers. Caress his back and neck while watching TV. Smile at her often.
8. Bonus sin: Stubbornness. This wasn’t on my original list but I just thought about it before publishing this post, and had to add it in. Every relationship will have problems and arguments — but it’s important that you learn to work out these problems after cooling down a bit. Unfortunately, many of us are too stubborn to even talk about things. Perhaps we always want to be right. Perhaps we never want to admit that we made a mistake. Perhaps we don’t like to say we’re sorry. Perhaps we don’t like to compromise. I’ve done all of these things — but I’ve learned over the years that this is just childish. When I find myself being stubborn these days, I try to get over this childishness and suck it up and put away my ego and say I’m sorry. Talk about the problem and work it out. Don’t be afraid to be the first one to apologize. Then move past it to better things.