Negotiating is not only just important in business and a part of everyday life, being a skilled negotiator is essential for business survival.
While some picture negotiations as two suits on either side of the table in a high rise office taking about a million-dollar deals or maybe politicians discussing trade agreements for months, negotiation is more common than realized in our everyday life.
“I’ll pick up the kids from school if you can take care of dinner”
“I can’t make it at 5pm. Can you move your meeting so we can meet at 4?”
“I don’t think that task is that urgent, can I handle these other things and get to it next week?”
Not knowing how to have effective two-way communication, find agreements with people you interact with, large or small, can be crippling to your relationships.
Here, I want to address just one aspect of the process.
B.A.T.N.A.This stands for Best Alternative To a Negotiated Agreement.
Your BATNA is not a number or a term sheet, it is a potential course of action you would take rather than accepting the terms and/or the deal itself that is on the table.
An enormous part of negotiating is preparing. Understanding both sides of the table will give you the strongest advantage. In every case you need to find alternatives to your best case scenario and BE OPEN for alternatives that come up during the conversation. Negotiation is not linear! It can move forward, backward, lateral, fast, slow, stop dead or go on for years. You need to be prepared to be open and flexible with the situation and possibilities as they unfold. Consider and WRITE DOWN things you cannot give up, things you can, other creative alternative, and most importantly during negotiation actively listen for these things to come up or change during the process.
If you are clear with even just your own position you have a significant strength of mind. If you walk away not giving up the thing you could not, you’re ok. If you gave up things you were ok to give up for the bottom line, then you’re still ok.
Business BATNA Sample: You find a private home seller who has moved out of his house and you want to buy it for a deal to fix and flip. It is vacant and he is spending too much money every month to hold it. After your calculations you make your best offer. He ultimately cannot sell at that price. You remember on the way to see him you noticed the college nearby. “What about renting it?” you ask. He says he is not interested in being a landlord and can’t as he is out of town. He just can’t afford the house payments. After some discussion you agree to property manage the place for him and now you are both making cash flow from the house. (This one really happened)
Day to day BATNA Sample: You’re headed to lunch. You can’t compromise eating healthy and sticking to your diet plan. You look at the lunch menu and you choose you are going to order the salad because it’s the heathiest choice and you do like the taste. On the way to your table the server drops off what looks like a breakfast plate with eggs and fruit at another table. You salivate. When he comes by, you ask “Are you still serving breakfast? I don’t see it the menu.” Server replies “We are after the cut off, but if you order a side of egg and fruit I can bring you out what that gentleman is having.” (This one did not really happen. I like burgers)
The main points here are:
- Be open and fluid during the process
- Actively listen and find out the real “WHY”
- OVER PLAN and identify as best as you can your BATNA
Thanks for reading. We are always providing investors with above average returns on the easiest investment to control. Maybe you feel you are not ready or don’t have the capital to earn from.
Ever thought about collecting referral fees for mentioning an opportunity to a friend? 😉
NaNa NaNa NaNa NaNa… BATNA!