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LogoutIn a negotiation, the initial price quoted is known as the anchor price. This sets the base price upon which negotiation proceeds and has an effect on the future perceptions of price. A buyer generally sets a lower anchor price, while a seller would set it higher. Both parties come to the table keeping in mind the last price (final offer) at which the deal remains viable. This is the walkaway price.
In all negotiations, you must have a walk away price and/or condition. This is the price and/or condition at which you walk away. I have seen too many negotiations go on for way longer than they should have because one party didn’t have a walk away condition, they just kept trying to make it work but without letting the other side what the limits were to the deal.
As in life, you must communicate your limits to the world around you.
Along the same lines, but more generally, you have to go into a negotiation knowing what are your must have terms and conditions, what are the nice to have ones, and what are the deal breakers. These must be very clear for you as well as all those on your team. You use this list as your guide during the process and adapt it as you move forward based upon whatever the other pay has on their list. Of course, if you must haves are must haves it is harder to adapt those points but sometimes you have to change their priority which might allow you to move one down to nice to have status.