When you decide you are ready to negotiate regarding an issue you should write out a list of goals you have in mind to achieve. This sounds elementary and obvious, but you would be surprised how many of the people I coach fail to approach their negotiations in an orderly fashion. There are three things you need to consider when you set your negotiating goals.

First, you have to think about the absolute limits of what you want. This means what is the most you think you could get. One gentleman I worked with recently wanted to get a recording contract with a major record label. This guy was a musician of some ability and he thought he could get one million dollars in the contract. He failed to see that money is not the only thing a major label could offer a musician. What about promotion? The label has one of the best radio station promotions teams in the country. What about publicity? Musicians are fair game for the nightly entertainment news and the labels are major informants to the media. What about appearances with other, established, artists? Appearing on the bill with famous groups is a sure-fire method for getting notice. Labels can easily help insure their best groups work with their baby acts. There are a number of other things this musician could ask for. Money is not the only target in his young career.

Other hand, the youngster failed to ask himself what is the lowest payoff that would make him say "Yes!" For example, let's say the label announced they would give him only $250,000. Is that a deal killer? What if they guarantee appearances for him over a nine-month period with ten of their top acts? What would the value of that be? What if the label said they would get him exposure on the cover of a top music magazine? The list goes on. You have to decide what are the limits or parameters of what you will take when you sit down for a negotiation.

Second, you have to decide what the best alternatives are available in negotiating this agreement. This means you must preplan a negotiating response for what happens if you cannot accept certain terms of an offer under the limits you have set and yet, almost there so that it may not be smart to turn the deal down. Let's say our musician decides he MUST have the million, just because he wants to tell his friend that is what he got. The label says nope, will not happen. The door is going to slam shut if he keeps talking like that. Does that mean the negotiation is over? No. An alternative is possible. But what if the offered money payment is lousy? Does the singer just take the offered negotiations deal any way, go home and cry? If he has already decided what the lowest payoff he will accept and the offer is less than that, he should re-approach the record moguls and try to get something else he wants. If he cannot improve the offer he should consider walking away from the negotiations. Maybe it is best for our musician to find an angel investor who will pay for pressing his record and release it himself. That has been the strategy of many top name musicians lately. If you know your counter-party's goals and situation you can best determine the alternatives. If you go to a bank asking for a loan and they do not have any money, it is impossible to structure a deal, even if you are willing to undertake usury payments and give them your prize tulips as collateral. The deal cannot be done. Walk away. If your counter-party is desperate to make the loan since it is the last of the month and they have money in the vault you can get some other term you seek, such as a longer period of repayment, even if the rate is set by bank policy and cannot talk the loan officer into a lower rate.

Third, when you first plan your negotiation you need to ask what the goals of your counter-party are. If the label has already signed one million singer-songwriters, because they are extremely popular just now, they may not need another. Preparation demands you know what your counter-party is likely to accept. Think about it: they are not going to tell you this is the highest I will pay. But you may be able determine that by yourself.