Effective Negotiating Skills for Positive Small Business Contract Outcomes
Modern businesses run on the lifeblood of written, legally enforceable contracts. Fair and equitable contracts are created through clear communications and effective negotiations between contracting parties. Contract negotiation involves active listening, rational thinking, and a problem-solving approach, an extremely valuable skill set for small business owners. This article outlines some aspects of contract negotiation that lead to successful contract outcomes for your small business. The goal is to help you develop and hone effective contract negotiation skills.
Know Yourself and Your Contracting Partner
Preparation for contract negotiations involves conducting background research to set the stage for discussions. Consider your contracting partner's likely negotiation strategy, and their objectives, strengths, and weaknesses, to help you manage the discussion and steer the eventual outcome to address your own goals and interests.
Prioritize your key objectives before starting contract negotiations. Write out the terms that represent the best possible outcomes for you. Note any terms or conditions that will cause you to walk away if they are not achieved. As a well-prepared contract negotiator, you understand your own objectives and what you are trying to achieve with the contract, as well as your contracting party's objectives and motives. Are the right people involved in the discussions? For an effective negotiating session, you want to deal with the right person on the other side of the table.
Strive for Clarity and Completeness
Good contracts are clear, concise, and complete. Details are specified, terms and dates are identified, and responsibilities are outlined. Financial information should be complete and contingencies for dispute resolution and termination included. Get it in writing! How often have you heard that?
Don't rush the negotiation, which could lead to an important detail being overlooked or inadequately documented. During negotiation, exert pressure by referring to alternatives available to you. Offer concessions at the right time — to keep the conversation going, for example, or to get past a particularly tricky aspect of the deal. Keep emotions in check, and set a time limit for the negotiations. Be clear on the language you will accept on any closing conditions.
Finalizing the Deal
A contract is valid and legally enforceable when both parties have signed the deal. Contract documents are typically confidential unless both parties agree that they are not. CLM software is often used for the final document. If you want to modify a current contract to create a new one, save it as a PDF file and then extract PDF pages online for free to select the relevant sections. Finally, save the modified file for further editing.
Many business owners use the professional services of a contract lawyer to prepare or review the documents. Others employ professionals at every step of the way. The legal environment for contracts is complex and a set of experienced eyes and ears helping the process or crafting the mutually agreed-upon arrangement could be pivotal in achieving positive and satisfying contractual outcomes.
An effective contract negotiating strategy and skill set leads to smoothly running business operations, and additional opportunities and potential growth. Reach out to your local chamber of commerce to learn more and share with others.
This Hot Deal is promoted by Leavenworth-Lansing Area Chamber of Commerce.