Starting off the new year with a roster of accounts is usually an indication that year-end negotiations have gone in your favor. No matter which side of the table you find yourself, that’s good news for any small business owner. Besides knowing when to hold ‘em and when to fold ‘em, there are a few more sophisticated negotiation techniques that every small business owner should practice to keep business thriving with new and renewed accounts
Ask yourself these three questions:
Are any barriers getting in the way of the deal? Everything from communication to conflicting strategies and authority issues can put negotiation talks on ice, so being transparent and setting realistic expectations can make the difference in keeping conversations moving in a positive direction.
Professor Lee Ross of Stanford University proposes that, “We need to avoid that trap in our own thinking and be careful not to trigger that reaction from others. Rather than trying to wrap things up by putting a reasonable number on the table, for instance, wait for the other side to make a specific request. In this manner, you may increase the perceived value of your concession – and your counterpart’s satisfaction.
Are all the chips on the table? A sure obstacle to successful negotiations is a surprise request made from countering parties. Hail Mary plays are really not the best play to call during a negotiation. Make your requests clear and be straightforward about any observations or anticipations as they arise.
According to Professor Ross, “Either way, you should be leery about making any unreciprocated concessions. If your counterpart asks for new terms, even if you can afford them, you should get a favorable adjustment in return. Otherwise, you’re simply encouraging further requests.”
Is your contract on paper? Formal documentation is critical. Have your legal counsel review paperwork even if the other party has said they will do the same. Having properly reviewed and vetted contractual agreements affords merchants, vendors and partners the opportunity to minimize risk and maintain a level of protection that would otherwise be lost.