When it comes to negotiations, there are two basic truths.
One, everyone negotiates.
And, two, everything is negotiable.
At least that’s how Moez Limayem, dean of the University of South Florida’s Muma College of Business, sees it.
He shared his expertise on the art of negotiations at a recent North Tampa Bay Chamber of Commerce breakfast meeting, at Pasco-Hernando State College’s Porter Campus at Wiregrass Ranch in Wesley Chapel.
“We all negotiate every single day, from the time we wake up, until we sleep. We negotiate with our kids, spouses, friends, business partners, employees, bosses, that’s what we do,” Limayem said.
Over the course of his life — in which he has lived, worked and studied on four continents — he has had the opportunity to observe “how ill-prepared most people are, for negotiation,” he said.
So, he offered the breakfast crowd a short course in effective negotiations.
He outlined 10 rules that apply in all types of negotiations — whether you’re buying a house or a car, or working out a business deal.
It’s important to remember that “negotiation is a discussion between two parties, two equals.
“Neither party has the power to get his or her way. If I can impose my way, that’s no longer a negotiation,” he said.
That being said, here are Limayem’s 10 rules for successful negotiations.
- Rule No. 1: “Never start negotiating until you are ready.
“It’s amazing how many times a good negotiator will push you to start very, very quickly. Why? Because they want to catch you ill-prepared.”
“How do you get ready?
“There are three things to properly prepare.
“First one, do your research.
“For example, you want to negotiate a job, salary. What type of research do you do? What are other people making? Adjust for cost of living. Go to the website; it’s amazing how much information you can find there.
“No. 2: Research. More research.
“No. 3: Research.
- Rule No. 2: “Always be faithful to your BATNA (Best Alternative to a Negotiated Agreement).
“Based on your research, you need to know that level at which it (the deal) is not worth it anymore. What do you need to do? Walk away.
“If you are buying a car, what would be your BATNA. The maximum price you are willing to pay.
“How do you decide on your BATNA?
In “2008, 2009, people did not stick to their BATNA. They were buying houses, more than they could afford and that led to a disaster.
“Do your research. Decide on your BATNA and be faithful to your BATNA.
“A good negotiator will always want to know your BATNA. Resist that. Don’t disclose your BATNA. That’s your secret. And, be willing to walk away.”
- Rule No 3: “Never make the first offer.
“A good negotiator will push you to make your offer.”
But, don’t do it, he said, because “you might be losing out.”
- Rule No. 4: “Listen more than you speak. We’re born with two receivers and on transmitter, so we should at least listen twice as much as we talk, especially in negotiations.”
- Rule No. 5: “Never accept the first offer. Everything is negotiable.”
When someone is selling a house and they ask for $200,000, your first step, Limayem said, should be to: “Look the person in the eyes. Pause. Repeat the offer.”
Typically, just that alone will cause the seller to lower the asking price.
“Most of the time, that’s how it works. Try it.”
- Rule No. 6: “Never make a quick deal.
“You need some time. Go back. Think about it. Analyze it. Talk to people you trust, then go back.”
- Rule No. 7: “Do not negotiate with yourself.
“What happens when you negotiate with yourself? Bad things happen. You start negotiating with your BATNA and then you go to your emotion, and you leave a lot on the table.”
- Rule No. 8: “Watch for the Salami effect.
“You give me a quote for renovating my house. One lump sum.
“A good negotiator (wants to know) how much for labor, how much for material, how much for this and for that,” he said.
A good negotiator would push for that because “he or she can select the things that make sense and forget about the things that don’t make sense.
“If you, as a negotiator, can do the Salami effect, that’s great. But, if you’re the other side, watch for it. Resist it.”
- Rule No. 9: “We live in a world that is truly global.”
So, it’s important to be aware of cultural differences and norms, when doing business with international partners.
- Rule No. 10: “Avoid the rookie’s regret. You did your research. You decided on your BATNA, you followed your rule. Move on. This will only hurt you.
“Always avoid regrets,” he said.
Published April 24, 2019