Negotiate as if Your Life Depended on It—Because It Does

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Negotiate as if Your Life Depended on It—Because It Does

The call finally comes. A customer wants to talk about potential business. But before you jump in and offer your right arm, take a deep breath and remember that small businesses live and die by how well they negotiate their business contracts. Consider the following seven effective negotiation tactics.

1. Know What You Want

The only way to come from a position of power and self-confidence during negotiations is to know what you want out of your business and how potential clients can help you meet those goals.  Decide what you want from the other party in terms of profit and type of work and determine how you're willing to compromise.

2. Prepare

When you're well prepared, you're more likely to stick to your goals and not become intimidated and agree to a deal that is not in your best interest.

Gather all of the relevant facts about the proposed project beforehand, including the hours required to complete the project, necessary supplies and related requirements such as licensing. Once you know how much the project will cost you to complete it, add your desired profit. Having this figure implanted in your mind goes a long way toward successful negotiations.

3. Aim High

Of course, you want to offer the client the best bargain possible, but your first priority is netting a profit for your company. Ask for more than you want or you'll get less than you deserve. When you do make concessions, do so in one manageable transaction and counterbalance the concessions with demands of your own.

For instance, if the client wants to lower the amount of labor to be paid, get a higher percentage of the labor payments in your first payout or add additional time to the contract.

4. Stretch but Don't Strain

Every deal you broker and fulfill affects your reputation. When negotiating, don't sacrifice or compromise your values. If you know that you can't complete a job in the amount of time a company wants to allot you, it's important to make it clear that the time is insufficient and would affect the quality of your work.

Negotiating so that you stay in your comfort level ensures that you preserve your integrity and often causes the company to agree to your terms.

5. Use Deadlines to Your Advantage

If the client claims to have a deadline, suspect that it's a tactic to get you to move quickly.

Don't bite right away, but take your time and do your homework before making an offer. If there does seem to be a true deadline, dragging your feet a little may mean you'll get what you want when it's time to sign. Tell the client that you want to finish up quickly, but there are still issues that need to be resolved. If you are the one to offer a “final” offer and the client doesn't take it, offer another one.

6. Wait

Once you make an offer, wait for the client to contact you. Calling to check in is a sign of weakness and gives the customer an opening for wearing you down. When the call does come for further negotiation, stand your ground by saying that it's the best you can do considering the circumstances. This shows that you're sticking to your guns but leaves room for more negotiation.

7. Examine the Fine Print

If you sign a contract prepared by the client, make sure to read all of the fine print, as this is often where they'll try to slip in conditions that aren't favorable to your company. 

Did we miss any key points? Let us know in the comments section below.

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