Contracts

Contracts

Tips for effective negotiation

The contracts you negotiate can be the key to your small business. A good contract can be effective and helpful, while a bad contract can end up costing you money, quality and time. That means you need to be an effective negotiator, and make sure you’re getting the best for your buck.

Whether you’re negotiating with suppliers or customers, service providers or landlords, you need to take the time to do it right. If you’re in contract negotiations, keep the following in mind:

  • Image is everything. You can turn a good deal against you if your co-negotiators don’t think you’re serious about it. Even if you’re running a one-person gig in your basement, when it comes to meeting with others, look the part. Professionalism in your clothing and demeanor is important.
  • Focus on the contract itself. You might be dealing with your best friend or a complete stranger - every business arrangement is different. Regardless, focus on the contract and its issues, not on the people you’re dealing with. Remember to keep your words concrete and don’t base your arguments on feelings or emotions. Have facts and figures in your arsenal and you won’t be thrown off by a smooth-talking business professional.
  • Pick your battles. Before you go into negotiations, know your must-haves and your deal breakers. Be prepared to offer some wiggle room on things that aren’t so important to you, but know what you can’t afford to bend on.
  • Keep notes. Don’t let any discussions go down without a tape recorder or a third party ready to take notes. You don’t want to lose any important points in the battle of he said, she said. You want to be able to trust the people you’re dealing with, but at the same time you should never leave yourself open.
  • Get a signature. It would be great if everyone could operate on a good word and a handshake, but that’s not the reality of today’s business world. Get everything signed, in duplicate, and witnessed so that you have concrete evidence of your dealings.
  • Be positive. Negotiations are based on compromise - you may not get your ideal terms out of any contract. However, be positive in your dealings and focus on what went well. This will reinforce your commitment to the contract and your dealings, and will ensure that future negotiations are friendly.