Knowing Your Best Alternative Gives You Power to Walk Away From a Bad Deal

During a negotiation, in addition to knowing your goals(needs), you must know your best alternative to a negotiated agreement. In other words, have a Plan B that is really acceptable. If you know your best alternative you will truly know your bottom line and you will carry much more unspoken power at the negotiating table – no scent of desperation. For instance, if you are a small business and you are negotiating with the vendor of choice make sure you have the best alternative vendor. If your vendor of choice will not meet key terms be prepared to negotiate with your best alternative vendor. This prevents you from making a bad deal despite your bottom line and wasting time with fruitless negotiations that often turn into concessions on your bottom line.

These means be prepared to walk. Although your goal is to obtain agreement, if the other party is unyielding you may have to walk to prove you mean business. Sometimes “walking” is a necessary strategy such as in buying a car or real estate. In those situations, dealers and agents often call you back or re-contact you once you implement this strategy. That is just the game they play. But when the decision to walk comes about as a result of the negotiation you must never be afraid to do it and therefore you MUST know your best alternative and be ready to accept it or negotiate with it.

More tips for small business owners can be found here.