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4 Replies Last post: Jul 3, 2008 2:21 PM by Lighthouse24

Negotiating a contract

Oct 20, 2007 8:58 PM

Click to view alabed's profile Start-up alabed 3 posts since
Oct 13, 2007
Any guide lines or recommendations on negotiating contracts ?
Tags: alternate_financing_options, buisness, business, business_credit, capital, cash_flow, collateral, credit, financing, financing_customers, growth, investment_loan, investor, line_of_credit, loan, loan_to_purchase_property, loan_to_take_over_business, loans, money, personal_credit, small_business_loan, start, start-up, up, working Report as inappropriate
Click to view teacup's profile Authority teacup 33 posts since
Sep 29, 2007
1. Re: Negotiating a contract Oct 20, 2007 9:05 PM
in response to: alabed
Always negotiate with more than one supplier - 3 or 4 if you can. This way, you can compare terms & pricing & leverage that information for negotiations. Also, this ensures that you get the best terms that protect your business & interests.
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Click to view Score133's profile SCORE Score133 34 posts since
Aug 14, 2007
2. Re: Negotiating a contract Oct 20, 2007 9:06 PM
in response to: alabed
The most important thing you have to do before you enter into any contract negotiation is to know exactly what you want the outcome to be and exactly where you will walk away. For example, if you want to sell a truckload of dirt for $100, but know that you will actually take $80, you have to be willing to walk away from an offer of $75. Think it through before you get into a contract negotiation situation. You have to be very familiar with every aspect (probably line by line) and know where the weaknesses are in the contracts and where the strengths are that will protect you. Remember, the negotiated money will wind up in someone's pocket...and it may as well be yours! So do your homework; research the other party and see what kind of financial shape they're in...how desperate are they to get cash? How desperate are you? Know what you want and be prepared to go and get it. Negotiating is not an easy task, but it is certainly not impossible if you are ready for it and are determined to get your fair share. And speaking of fair, only when both parties win is it a good contract. If you are uncomfortable with the entire negotiation process, hire a good lawyer with a good contract background.
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Click to view Lighthouse24's profile Mogul Lighthouse24 2,396 posts since
Oct 10, 2007
3. Re: Negotiating a contract Oct 20, 2007 9:46 PM
in response to: alabed
Prepare for the negotiation ahead of time:
1. Decide on your bottom line (the absolute worst deal that you're willing to accept) and stick to it. Be prepared to walk away if you have to.
2. Identify the areas in which you have power or leverage, and the areas in which the other party will have power or leverage during the negotiating process. Consider how and when to best use your power.
3. Identify your negotiating "currencies" -- not just the money, but other things of value that come into play (there are always things that you give easily and that are important to them, and things that they can give easily that are important to you, so put them into play).
4. Never give up anything without getting something in return.
5. Make sure the other person can "save face" if you win. Everyone has someone else they have to answer to, and we are likely to encounter the same people over and over in our business dealings. Never turn someone else into a "loser" in the deal.
6. Take a course, read a book, or listen to an audio program on negotiating ploys and tactics -- so you know what tough negotiators are using against you, and so you learn how to counter those tactics. (SCORE probably has a free course or something -- I'm sure they'll post it here if they do!)
7. Start negotiating well before you need something, and try to keep time on your side. If you can afford to wait longer than the other person to get an agreement in place, you have an advantage.

Good luck!
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Click to view Lighthouse24's profile Mogul Lighthouse24 2,396 posts since
Oct 10, 2007
4. Re: Negotiating a contract Oct 20, 2007 9:47 PM
in response to: alabed

Prepare for the negotiation ahead of time:
1. Decide on your bottom line (the absolute worst deal that you're willing to accept) and stick to it. Be prepared to walk away if you have to.
2. Identify the areas in which you have power or leverage, and the areas in which the other party will have power or leverage during the negotiating process. Consider how and when to best use your power.
3. Identify your negotiating "currencies" -- not just the money, but other things of value that come into play (there are always things that you give easily and that are important to them, and things that they can give easily that are important to you, so put them into play).
4. Never give up anything without getting something in return.
5. Make sure the other person can "save face" if you win. Everyone has someone else they have to answer to, and we are likely to encounter the same people over and over in our business dealings. Never turn someone else into a "loser" in the deal.
6. Take a course, read a book, or listen to an audio program on negotiating ploys and tactics -- so you'll recognize what tough negotiators are using against you, and so you'll learn how to counter those tactics. (SCORE probably has a free course or something -- I'm sure they'll post it here if they do!)
7. Start negotiating well before you need something, and try to keep time on your side. If you can afford to wait longer than the other person to get an agreement in place, you have an advantage.

Good luck!
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Click to view LUCKIEST's profile SCORE LUCKIEST 7,938 posts since
Aug 6, 2007
5. Re: Negotiating a contract Oct 20, 2007 10:05 PM
in response to: alabed
Lighthouse 24 has a great answer. Really answers the question well.
A great example is Joe Torres and the Yankees.
It does take skill to negotiate. Get professional help if you need it.
SCORE helps people in business and their services are FREE. You visit SCORE in person or on line.
Good luck, LUCKIEST
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