In today’s belt-tightening economy, both sides in a negotiation must fight for every dollar and term of a given deal—all this, while maintaining a cordial working relationship with vendors and clients. As a result, preparation is more important than ever before. Scott K. Mertz, principal of NAI Mertz Corporation, has leased and sold more than 11 million square feet of space, totaling almost $255 million in over 542 transactions. That includes his work with First Industrial Realty Trust, overseeing 1.5 million square feet of space at one of their most successful business parks in the United States. Mertz shares what he’s learned on how to effectively negotiate a deal.
1. Fully define your objective.
“Don’t enter into a negotiation without having a clearly defined objective and a vision of what your desired outcome would be. You must consider market conditions,” he urges, and consider all the unique facets of the deal that’s on the table. “Be open, up front and honest, with both sides laying out what they want to achieve right from the start.”
2. Be confident and assertive.
Don’t be afraid to ask for everything you want in a deal—and then some more, Mertz suggests. “Drive the negotiation as much as possible so that the outcome remains on target with your goal,” he says. “Ask for the world, knowing that you’re not going to get everything you want. If you don’t ask, you won’t know what you might achieve.”
3. Stay cool.
Letting yourself get flustered or angry is a sure way to get off track. Instead, he suggests, “Recognize the other party has their own agenda and is seeking to advance their own interests, not attempting to simply frustrate you. Don’t let emotions cloud your thinking…. Business is business. Try not to take the negotiation personally.”
4. Be prepared.
“Know your client’s requirements and demands inside and out. Research the other party as thoroughly as possible so that you can anticipate any direction that the negotiation may take. Understand their hot and cold points, and what they need to achieve. The other party will have some requirements that are musts, while others may allow for further negotiation. You need to clearly understand their needs,” Mertz says.
5. Think win-win.
“The smoothest, most effective transactions occur when both sides recognize and work toward an outcome that truly benefits everyone,” Mertz says. “When two parties enter a negotiation, there is a deal to be made. Everybody needs to make out for everyone to win.” Not only will this outlook ensure negotiations go smoothly—it will also lay the groundwork for you to do business in the future.
Published (and copyrighted) in South Jersey Biz, Volume 1, Issue 3 (March, 2011).
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