Posted on May 16, 2007 by Rush Nigut

5 Basic Negotiation Tips for Your Next Business Contract

Most small businesses will enter into a contract or business deal from time to time.  Some agreements may be simple while others may require the skills of a contract or business attorney.  In either case, you will want to feel comfortable that you have negotiated your best deal possible.  The following are five basic suggestions for negotiating the best terms for your next business contract:

  1. Set out your goals before you start.  The process of writing down your goals in the negotiation helps you clarify what you intend to do, understand the importance of significant issues, and commit yourself to making it happen.
  2. Do your homework.  You should know the law, relevant facts and figures.
  3. Decide what you really need and what areas are "throw aways".  Be prepared to trade something to get something important to you. 
  4. Build trust and listen to the other party.  A recent post from Brett Rogers sets out the importance of listening.  You learn far more in a negotiation from listening than you do from talking.
  5. Manage your emotions.  Resolutions rarely occur when parties lose their temper or become irrational.   
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carpe factum - August 5, 2008 4:31 AM
Assumptions not documented now become excuses later. It was a favorite line of a former mentor of mine. I've used it plenty of times during project communication presentations. I even made reference to it in my first book. And what
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Brett Trout - May 17, 2007 12:15 PM

Great tips Rush. Another extremely valuable piece of advice is to have your best alternative to a negotiated agreement (BATNA) crystallized before you enter the negotiation. As a simple example, if you are negotiating for a new car, do all of your research and decide beforehand what is the absolute top dollar you will pay, say $31,000. Then, when you get into the heat of negotiation, you will not be tempted to go just a little above your BATNA just to do the deal. If the negotiation stalls at $31,001, you can feel satisfied that you succeeded in avoiding a deal that was not beneficial.

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