Prioritize Your Business in Every Negotiation
The key to successful negotiations is prioritizing each part of your business. As an entrepreneur, you're likely used to giving everything you've got for your company. That's an excellent way to be an owner. But too much of that can hurt your bottom line or cause unintentional fallout in other areas.
Knowing When It's Time To Walk Away
To be a brilliant negotiator, you have to know when it's time to walk away from a deal. To start, decide what your top priorities are and start with those.
Examples of preferences to protect your interests include:
Client satisfaction. This protection is essential if you're advising, servicing, or selling products that can be difficult to use or cause harm if misused. If you've made sure the client understands how to use your product and still misuse it, then at least part of the blame lies with them — not with you.
Privacy concerns. Protecting customer data is essential, but so is protecting your intellectual property rights. Contracts should detail how you will protect client or customer privacy, and you should prioritize them accordingly for each potential business partner.
Standards of service. You've worked hard to create quality products or services that meet your customers' needs. Make sure you're compensated fairly for your efforts in any agreement you sign, and don't be afraid to prioritize strong compensation agreements in every deal. Many entrepreneurs have trouble letting go of profits in the name of excellent customer service, but it's important to walk a fine line between the two.
In 2014, two well-known pharmaceutical companies were in negotiations. After a month of negotiations, AstraZeneca walked away from a $118 billion deal with Pfizer, stating the offer undervalued the company.
If you see any of these circumstances from the negotiations, you'll want to walk away.
Adverse Outcomes of Accepting Unfavorable Terms
The most common negative outcomes of accepting unfavorable terms are losing money, employees, time, and reputation in your industry.
If you lose money, it's difficult to make up for lost cash. For example, if an agreement doesn't address intellectual property rights and your company's work is stolen, you could lose significant profits.
Losing employees can be detrimental to your business because companies with stable employees outperform those with constantly changing staff. Although maintaining a talented team may cost more money, you'll save in the long run.
Time is sometimes more complex than losing money because you can't get that time back.
Finally, losing reputation isn't only bad because it hurts your sales and because it hurts your employees. If customers lose trust in you, it's challenging to get them to return.
Pay Attention to the Contract's Appearance
The contract's appearance is what a counterparty sees when presenting the legal document to a potential business partner. Make sure it looks great and is easy to read. Make sure to merge PDF files for simple viewing and for easier preparation.
Networking with other companies within your industry and supporting industries can help your brand grow. Consider joining your local chamber of commerce to meet these needs.