When you think about it, you've really been negotiating your whole life. From the first time you tried to barter a treat in exchange for good behavior as a kid, you've been practicing the art of getting what you want while giving up as little as possible. Of course, contract negotiations are slightly more complex and high-stakes, but the basic principles remain the same. Consider these ideas for negotiating contracts using a strategic plan.
Show Your Hand, But Not Too Much
It should be clear to both parties when they enter the negotiations what the objectives are. Having a well-designed framework for negotiations is a key factor in whether or not talks are successful. This methodology involves clearly defining the problem or opportunity at hand and working to find common ground with the counterparty. It may be easy to approach negotiations with only your interests in mind, but the most successful deals are those that are mutually beneficial to all parties.
Keeping secrets in the negotiation process isn't the best approach, and neither is revealing everything to the other party. What you want to do is clearly inform the other party of the outcomes you want to achieve. What you do not want to reveal is what you're willing to concede to reach those goals.
When Success Means Walking Away
Abandoning talks isn't ideal, but sometimes it's the best choice. The alternative — getting stuck with a bad deal — can have devastating consequences for your business in the short and long term.
It's a good idea to have multiple other vendors lined up in the event you can't achieve an agreement with your first choice. Having a backup plan in place reduces the stakes and the possibility of major problems occurring if talks fall through.
The People vs. the Problem
Of course, the fact is you don't get along with everyone in life, and the same holds true when you're in the negotiation room. Negotiations with third parties can be especially difficult because these are probably not the same people you're accustomed to working with on a regular basis. Without that rapport and familiarity, negotiations are at risk of being derailed by conflicts and misunderstandings.
Remember, it doesn't matter where good ideas come from. Don't write off what someone says during discussions just because they've proven to be tricky to work with. Everyone deserves to be heard, and the best negotiations are those in which everyone feels like their opinions are valid and welcome.
Pro tip: If you find you're bumping heads with a particular person during the talks, consider scheduling a one-on-one meeting with them to privately work out any interpersonal issues that may be hindering the negotiation.
Make It Look Nice
Contract presentation is important, and you need to make sure the final document is error-free and accounts for all the agreed-upon terms and conditions. Take one last editing pass, and then compress PDF for a professional-looking final product.
Set Yourself Up for a Win
Make sure you enter negotiations with a clear idea of what you want and what you're willing to give up to get it.
For more information on contract negotiation, visit your local chamber of commerce.