Preparation is what gives you the upper hand in negotiations. The trick is working out what the best alternatives to a negotiated deal are for you and for the opposition

Negotiation is about gaining power and preparation is how we generate information that gives us power. A skilled negotiator would not enter any negotiation unprepared. And exploring all alternatives to make sure you get the desired outcome is key.

A Best Alternative to a Negotiated Agreement or BATNA is your contingency plan to protect you from accepting an agreement that is unfavourable. Your BATNA gives you a benchmark with which you can compare the negotiated outcome with one you could get elsewhere.

Imagine this scenario. A retailer has a gondola end available for a promotion. It contacts one supplier to negotiate terms for that gondola end. The retailer must consider what alternatives it has available should it not agree terms. If it only has one supplier, what are the consequences of not coming to an agreement?

It can't have an empty gondola end. If the retailer had contacted three or four suppliers, alternatives could have been suggested and the best would have been selected. This would give it BATNA, putting it in a stronger position to negotiate better terms with the other two or three suppliers.

So how do we establish our BATNA? Part of the preparation must be to carefully consider all eventualities and predict what the response would be to certain outcomes. Where is the balance of power before the negotiation; who needs whom the most? What are the most important issues to you and them? What will be the impact of not coming to an agreeable solution on these important issues? And so on.

Consideration must also be given to the type of relationship and what deadlines are in place. This will also allow accurate understanding of what the best alternative is for the given circumstances. Once we have these questions answered we must identify, then decide on the best options.

You should gauge what the BATNA of the other party is through effective questioning and by valuing all issues in its terms and considering what your response would be if it introduced its BATNA.

In negotiation the balance of power swings like a pendulum between both parties. Preparing your BATNA will increase your balance of actual and perceived power. The timing of when to exert this power is critical. Don't position your BATNA too soon as you could give the other party too much information, transferring power to it, or it could be seen as a threat and therefore destroy the relationship.

Whatever preparation you do or don't do before your negotiation, consider your best alternative to a negotiated agreement.n

Graham Botwright is a partner with The Gap Partnership specialising in commercial negotiation consultancy and development solutions.