The Role That Power Limits Play In Negotiations

In a negotiation, nobody is operating without constraints. We all have limitations on what we can and cannot do. It’s how we deal with these power limits that can have a big impact on the outcome of the negotiations. As negotiators, we need to understand that we are dealing with limits and then come up with ways to deal with them.

Time As A Power Limit

One of the most common limits that we will all run into during the course of a negotiation is time. It can be all too easy for us to judge ourselves based on how much time we have and how much time a negotiation is taking. We often judge ourselves much more harshly than anyone else does.

If we feel that we don’t have the amount of time that we believe that the negotiation will require to do properly, then time will be a real power limit for us. A great deal of this can be related back to the concept that “time is money” and the more time that we have invested in a negotiation, the more that we feel we have invested in a successful outcome. Taken together, we may find our options to be limited.

Money As A Power Limit

Another power limit in a negotiation is money. This all has to do with our ability to commit the amount of money that this particular opportunity is going to cost. Not having enough money to make a deal happen is what can cause money to act as a limit.

If during the negotiation you start to feel as though you are not going to have enough money to pull off a deal, then things start to happen. Specifically, you’ll discover that how you go about conducting your negotiations will start to change based on this belief.

In order to deal with this type of limit, you need to take action before the negotiations start. Your best bet is to take the time to discover what limitations the other side of the table are operating under. Once you know this, you can work it into your negotiation tactics and you’ll be able to overcome this limit.

What All Of This Means For You

In a negotiation, nobody has a free reign, We all operating under power limits. The key is to make sure that we understand what our limits are and find ways to deal with them.

One of the key limits that shows up in most negotiations is time. When we feel that we don’t have enough time to negotiate properly, we start to feel as though our options are limited. Additionally, money can also create a power limit in a negotiation. Taking the time to understand what limitations the other side has can help to equal things out.

Realizing that we are dealing with power limits is an important first step in dealing with them. Once we know what may be limiting our ability to successfully negotiate with the other side, we can start to take steps to deal with these power limits. Once we master them, we’ll find that we’re able to create better deals and do it faster.

Business Networking – The 10-Minute Presentation

In most structured networking groups, members have the opportunity to do a ten-minute presentation at their local chapter meeting to further educate their fellow members about their business, the types of leads they seek, their unique selling points and the ways in which members can assist them. The one-page business description can be used as an outline for this presentation.

In addition, the ten-minute presentation should contain ideas or directions regarding ways in which members can find leads for you or assist you in other ways. This portion of the presentation could contain information about the types of referral or strategic partners that would be best for you, what types of questions to ask to uncover leads, materials like discount coupons or free samples that could be shared to help generate first time customers, etc. Most members do a good job of describing their businesses but few do a good job of instructing others on how to help them. This portion of the presentation is extremely important, because your fellow members want to help with your business, but don’t always know how to help.

The purposes of your ten-minute presentation are to focus your chapter members on helping you and to provide them with the information they need to help you. Conclude your ten-minute presentation with a call to action or specific assignment that members can easily complete. For example, you could provide each member with coupons they can distribute to a specific target customer group with which they all have contact. Or, you could identify specific types of referral partners and ask members to think through their contacts and let you know if they know anyone fitting that description. The simplicity of these tasks increases the likelihood that your fellow members will complete them. The feeling of accomplishment resulting from their ability to fulfill the simple assignment will predispose them to take additional steps to help you.

Debt Negotiation

Debt Negotiation happens in two basic ways: by a professional, or by yourself.

Here are a few strategies the professionals use when handling a debt negotiation on your behalf.

In this discussion, we are only looking at “unsecured debts”, which includes credit cards or medical debts most commonly. It simply means any debt which has no collateral, such as a car loan, home loan, boat loan, etc.

Before you start any debt negotiation, you should expect that you’ll take a “hit” on your credit score. Any creditor who lent you money is not going to just let you get out of paying any less than the full balance and let you retain perfect credit.

That said, all credit automatically repairs itself when all future payments are made on time. In many cases someone can suffer credit damage from a debt negotiation and within two years, provided all future payments are made on time, have an excellent “A+” 730+ fico score.

In addition, many people confuse credit “Score” and credit “ability”. If you have a perfect 850 fico score, but do not qualify for more financing because you are carrying too much debt already relative to your income, then you have zero credit ability. Frankly, the creditors have worked hard to make you believe these are the same, so that you keep paying. If you are looking for debt negotatiation, you are probably carrying too much debt. If you’re willing to stop using your credit cards for a while and don’t plan to buy a home or car in the near future, then it may save you many thousands of dollars.

The most common strategy the professionals use is to stop making payments, and instead save the money up so that a single lump-sum payment can be offered.

In addition to this, a debt negotiation professional will also prepare a specially formatted letter containing a legitimate reason why you could afford the debt before, but cannot afford it any longer, and if things continue, it will end in bankruptcy or charge-off. This usually contains a factual story, referred to by professionals as a “hardship”. This can include medical events, loss of job or income, dramatic increase in expenses due to some sudden unforseen reason i.e. divorce or adjustable mortgage changes, or a natural disaster.

There are a few reasons why a debt negotiation professional can reach a better, lower debt negotiation settlement offer than you doing it yourself.

First, debt negotiation companies deal with thousands of clients at a time, so they’re able to reach higher up the chain of command. A consumer will usually reach a lower-level technician, who is not authorized much leeway for debt negotiation. An attorney or non-attorney professional can speak with a vice president because they are offering sometimes hundreds of thousands of dollars spread over many accounts based on certain status and net discount amount.

Second, debt negotiation companies know how to say and how to package what needs to be said, at the right time, to the right people.

Third a debt negotiation expert knows the system and averages for each company. A creditor has the legal right to sue you in court for non payment, which could result in a legal judgement, which can mean garnishment of wages directly from your employer, additional court fees, and more credit damage. A professional debt negotiation company can minimize the risk of being sued while still reaching a settlement around 42 cents on the dollar.

Last, because a debt negotiation company has either attorneys on staff, or non-attorney trained negotiators on staff (depending on your state’s laws, and your file), they know the creditor’s tricks. The credit card industry makes literally billions of dollars per year in profit, and they don’t make this by being nice. However nice the customer service representative may seem on the phone, they have one agenda: to get as much money from you as possible. Most typically, for anyone in a bit of debt trouble, the creditor will suggest “Credit Counseling”.

The dirty secret about credit counseling is that “Credit Counseling” was invented by the credit card companies. They want you to feel like they’re helping, but when you enroll in these programs, you’ll repay 100% of your debt plus interest, suffer credit damage, and they’ll often collect a monthly fee on top of it ($49 a month x 48 months, for example is $2,352 in fees, not including interest). They usually won’t tell you this, but they also get a 15% “fair share fee” from the credit card company, so the IRS has revoked the “non-profit” status of many of these companies.

Like plumbing, taxes, or fixing your computer, you can handle debt negotiation yourself, or you can hire a professional. Those willing to educate themselves to learn how to do it right can definitely save some money. That said, for the reasons stated above, often times the settlement amount offered on a debt negotiation you conduct yourself may not be as discounted as what a professional may get, and therefore the service in almost all cases pays for itself. For example, if you get offered $.80 on the dollar, but a professional gets $.42, then it’s actually cheaper even with the cost of service to have a debt negotiation service handle your case.

One dangerous byproduct of staying in debt is not having enough time to invest for retirement. Most people don’t know exactly how much money they’ll need to retire. Do you? The sooner you use debt negotiation to clear your debts, the sooner you can build your investments to ensure you can retire the way you want – instead of living your golden years as a burden on family, with lower standard of living, or working past retirement.