The Stages of a Negotiation

Introduction

Every successful negotiation follows a structure — whether consciously or not. Understanding the stages of a negotiation helps you navigate discussions with purpose and clarity. It ensures you don’t rush key steps or miss valuable opportunities to build rapport, uncover needs, or strengthen your position.

This lesson will walk you through the five key stages of a negotiation, from preparation to closing the deal.

1. Preparation

“You win or lose the negotiation before it begins.” – William Ury

 

Preparation is the most critical stage. It sets the foundation for everything that follows.

Key tasks:

• Define your objectives: What are your ideal, acceptable, and walk-away outcomes?

• Know your BATNA: Your Best Alternative to a Negotiated Agreement.

• Research the other party: Their needs, interests, goals, and likely position.

• Understand the context: Legal, cultural, or organisational factors.

• Prepare your strategy: What concessions can you offer? Where will you stand firm?

The more prepared you are, the more confident and flexible you’ll be.

 

2. Opening (Relationship Building & Setting the Tone)

This is where rapport is built and tone is set — especially important in longer-term relationships or high-stakes negotiations.

Goals:

• Create a positive atmosphere: Use friendly, professional communication.

• Establish trust: Be open and respectful.

• Clarify roles and process: Who’s involved? What’s the agenda?

• Express interest in collaboration: Signal that you’re seeking a fair outcome.

A cooperative tone early on can lead to a more productive and less adversarial discussion.

 

3. Information Exchange

This is the discovery phase, where both sides share information, clarify interests, and assess each other’s priorities.

Activities:

• Present your case: Clearly and confidently.

• Ask good questions: Uncover hidden needs or constraints.

• Listen actively: Pay attention to both words and body language.

• Identify common ground: Find overlapping interests.

The goal is to move beyond positions (what they say they want) to understand interests (why they want it).

 

4. Bargaining (Negotiation Proper)

This is the core of the negotiation — where proposals are made, concessions exchanged, and agreements shaped.

Techniques used:

• Offer and counteroffer: Make proposals and respond to theirs.

• Use objective criteria: Refer to market value, data, or standards to justify your position.

• Package proposals: Link issues together to create trade-offs.

• Know when to be firm or flexible: Protect your interests but remain solution-focused.

 

Aim for principled negotiation — firm on interests, flexible on how to meet them.

 

5. Closing & Commitment

Once an agreement is near, this stage ensures clarity, confirmation, and closure.

Steps:

• Summarise agreements: Reiterate what has been decided.

• Clarify any loose ends: Avoid ambiguity or vague language.

• Get formal agreement: This could be verbal, written, or contractual.

• Reinforce the relationship: End positively, especially if future dealings are expected.

Don’t let the deal fall apart here — double-check understanding and confirm commitment.

 

Bonus Stage: Implementation & Follow-Up (Post-Negotiation)

While not always considered a core stage, implementation is where the real impact happens.

• Follow through: Keep promises and deliver as agreed.

• Manage expectations: Communicate delays or changes early.

• Review performance: Especially in recurring or long-term agreements.

• Reflect on your performance: What worked? What could be improved next time?

Great negotiators learn from every deal — win or lose.

 

Summary

Conclusion

By following these stages, negotiations become more structured, strategic, and successful. You’ll be less reactive, more in control, and better equipped to reach outcomes that serve your interests while preserving relationships.