Negotiating contracts with other businesses is a part of everyday business dealings. Naturally, both sides want to get the best deal possible. These types of negotiations can be a little intimidating unless you understand how to approach them.
Strong negotiation skills are needed in order to avoid getting stuck in a bad deal. Here are 5 tips for negotiating a contract that will be favorable to your company.
Do Your Homework
One of the keys to successful contract negotiation is to go into the meeting knowing as much as possible about the other business and the contract you are pursuing. Understand that lack of preparedness puts you in a weaker position. For example, lets say you are negotiating the transport of products with Meyers Transport Inc. trucking company in Toronto. If you want more favorable terms, establish a good relationship beforehand. Familiarize yourself with their operations. When you understand what is important to them as well as what you can offer to sweeten the deal, you’ll be in a strong bargaining position.
Leave Emotions Out
Being friendly with business vendors does not mean being chummy during a contract negotiation. Leave the personal chitchat behind when getting into serious discussions. Emotions get in the way and can be detrimental to achieving a good outcome for your business. Be cordial while staying completely focused on getting what you want. Don’t let your personal friendships get in the way of being tough for the sake of your business.
Negotiation requires toughness and putting on an assertive posture. There is no room for shyness or lack of self-esteem. Show any weakness and the other party can use it to their advantage. Be confident that you are in control at all times. Demonstrate to them that you are master of the facts and that you believe your position is the strongest. When you exude this assertive attitude, it’s much more likely that the other company will acquiesce to your terms.
Clearly State Your Terms
Always put everything you want out on the table, even if you know you may not get it all. It never hurts to ask for exactly what you want, because you may be lucky enough to get it all. The other party is going to weight each request and determine if it is something they can or cannot do. Laying out all your desired terms will also allow you to rescind some of the less important terms while making the other party feel they’ve won territory and that you are reasonably attuned to their needs as well.
Be Willing to Give to Get
Go into the negotiation understanding that you will most likely need to concede some things to the other party. The whole point of a negotiation is that both sides go back and forth until they come to a satisfactory agreement. Neither side is going to get everything on their wish list. Therefore, give on smaller things to get most of what you want.
Savvy business contract negotiating skills are a real plus when entering into any type of deal with another business. These skills lead to satisfactory contract terms. Try these 5 tips to get the best terms on your next B2B contract.