Free daily tips, information and advice for people in small business
from someone who has been there, done that in several small operations.
Everyone negotiates. Children learn early in life that they sometimes must negotiate with their parents to get what they want.
As we grow up, we learn to negotiate at every turn. In your vehicle, you negotiate your way through an intersection. In a store, you negotiate your way through the aisles to find what you want.
Before you sign that lease for space, you negotiate terms. At your bank, you negotiate the best deal for growing your business.
Example: To negotiate, you need leverage. One way to negotiate better terms on space you want to lease is to show the landlord that you know something about the future economy. Landlords want certainty. In an economy that is iffy, you might get better terms on the "little" stuff by offering to sign for 5 years instead of 3. Sometimes, this can bring the monthly rate down. Plus, the "little" stuff can mean more to you than to the landlord. These might include lower electricity rates, heating costs or some construction changes. Landlords might be willing to exchange these for the longer term lease--and the certainty it brings.
If you have never been involved in negotiating, then you need some experience. A simple way to begin is to stop by a flea market. You spy a coffee mug that's priced at $10. You look over the other items on the table. You pick up the coffee mug, and you offer the seller $5. The seller counters with $8. You say you might go $6. You home in on the difference and pay the seller $7. Back at your place, you set the mug on the shelf--it will never hold coffee. It is a trophy and a constant reminder of your negotiating skill.
While this little activity is a simplistic learning experience, it can serve you well. The target of negotiating is to reduce costs. It works with landlords, bankers, labor unions, suppliers, and other business needs.
Basically, you put yourself in the other person's shoes. What is important to the other side? What are the weaknesses of the other side? How can you structure the deal to give the other side what they really want, and at the same time save you some money.
Questions? I retired when I turned 75. You can email me at AlWarr16@gmail.com with your questions. Put BLOG in the subject line so I don't delete your email. Expect quick answers from my 40+ years experience founding and running small businesses. Your privacy is always respected.