IF YOU’RE JUST STARTING out with a new business, you will no doubt be faced with several instances when you will have to negotiate contracts. Whether it’s with vendors, clients, real estate agents, competitors, etc., the rules seldom differ greatly. While there are only two outcomes to a negotiation (you either get what you want, or you don’t), there are virtually uncountable negotiation techniques. Some play hardball right out of the gate, some start out slow and smooth and wear down their opponent, only to intensify and clinch the deal toward the end. Some kill their opponent with kindness and others simply refuse all options other than their own. The bottom line is that when it comes to contract negotiation, don’t settle for what you really can’t accept, and remember that your opponent is a person, just like you. Finally, always remember that, chances are, you don’t have to do a deal that day. Sometimes, seeing you walk away from the table is all an opponent needs to know that they can’t out-negotiate you. When you sit across the table from a seasoned negotiator for the first time, it can be very scary. Just be strong and don’t give up more than you can afford to lose.
When you’re starting a business, the first thing you need to have is a good personality. This is what will attract customers to your business and make it easy for vendors and others to do business with you. You need to have good interpersonal skills because you’re going to be negotiating with clients, not robots. The way you interact with clients will likely determine if you will win the contract. Know what you want and work hard toward achieving it, without settling for something that you really can’t work with. Your personality will make or break your business profile. Try to be professional in the way you negotiate, but take my word for the fact that while “tough guys” win arguments, they often lose in the long run in that opponents probably won’t ever agree to sit down at a negotiation table with them again. Even if you’re a beginner, try to show the client that you have what it takes to deliver the best.
I once knew a guy who worked for a major corporation and one of his duties was to negotiate with the labor representatives on their terms and fees. He would schedule the negotiation for early in the morning and lead the negotiation in circles for several hours until lunch time, essentially accomplishing nothing. When they would break for lunch, the labor reps would go out to their trucks and drink beer, fatigued by the morning’s lack of accomplishment. After the two-hour lunch break (also strategically planned), the negotiation would resume and only then would the corporate negotiator get down to business. Half-drunk and sleepy, the labor reps would agree to almost everything the corporation wanted, unwilling or unable to put up much of a fight. This occurred for several years in a row. While some might call that unfair, is it really? Or is it simply anticipating your opponents’ movement and developing a plan around it to meet your goals?
When you are negotiating a contract, it’s not good to be money-oriented. We all know that the settled price and terms are the whole point of the negotiation, but don’t let it feel like it is. If you’re offing a service, let your client believe that your primary concern is their satisfaction, and that the price is just something that trails behind it. It’s actually a lot easier to leave something minimal stationary in a negotiation than it is to leave something major. Negotiate your services, not the prices. Your prices are your prices and a good negotiator won’t let those change. If they want a lower price, you should offer them fewer services. By diminishing your price, you are admitting that your services aren’t worth what you’re selling them for. If your opponent questions your price, remind them that your services are the best, but you are willing to negotiate a custom services deal in order to help the amount of services you’re willing to offer meet their budget.