Setting Boundaries in Your Business Dealings
Many entrepreneurs don't know their bottom line. Specifically, they don't know how far they can push before the other party leaves the table or how much they're willing to give up to make the deal happen. This unfavorable situation creates an uneasy feeling that will eventually get in the way of making good deals for your business.
Don't Go Into Contract Discussions Without a List of Negotiables
Make a list of what you can give up if needed and what you're unwilling to give up. This simple tip will keep your mind from going down the rabbit hole of what-ifs and help you remain focused on the end goal.
Examples of negotiables include:
Prices. The price at which you can afford to sell your product can have some wiggle room. Instead of a solid figure, use a range per unit, and a long-term deal may be worth more than an extra few dollars per sale.
Length. The length of the contract can be a touchy subject, and having different terms in mind may allow negotiations to go forward faster. A shorter period will allow you to re-evaluate your terms while still beginning a relationship you can expand.
Time. Contract negotiations have many dates. The time a party takes to deliver the product or service can vary depending on dozens of factors. If you have some flexibility, your negotiations may go more smoothly. Additionally, for deals you want to close because you want to work with a specific supplier, time negotiables can make all the difference in the outcome.
How to Be Flexible Without Bending Too Far
When negotiating a business deal, both parties need to give some. The seller has to give up certain items for the buyer to have what they require. If they're entirely inflexible, the deal can fall through, and they won't get their desired outcome. Being flexible can be tricky. You always want to come across as willing to negotiate anything while still being firm on the things that matter most.
You should always know your minimum as a non-negotiable before sitting down at the table. This can include minimum price, contract duration, or date of service or delivery. This area might be where you're willing to negotiate, but you still need a bottom line. If the buyer offers you less than that figure, don't budge. Make sure you're not giving up something important to win a battle that doesn't matter.
Improve Negotiations Through Presentation
How the contract looks to all parties plays an essential role in business talks. You want a document that's easy to read and has a professional appearance. When a contract is simple and to the point, it can save time in negotiations. If there are additional rules or clauses that need addressing, the discussion may take longer. Also, be sure to combine PDFs into one file to ensure a uniform document presentation for all parties.
Win the Important Rounds Through Flexibility
When putting your list together, prioritize the negotiables. You don't want to give up something or compromise on a deal when building a long-term relationship for your business.
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