Free daily tips, information, advice, ideas
to help you better manage your small business.
Everyone negotiates. Children learn early in life that they 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 are looking for.
Before you sign that lease for space, you negotiate terms. At your bank, you negotiate your way to the terms that best suit you.
Example: To negotiate, you need leverage. One way to get better terms on that space you want 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 at the local flea market. You spy a coffee mug priced at $10. You offer the seller $5. The seller counters with $8. You say you might go $6. You home in on the difference and the mug is yours for $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.
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, suppliers, and others.
Basically, you put yourself in the other person's shoes. What is most important to the other side? With a landlord, it is to get the space rented. With the flea market, it is to make a sale. Structure the deal to give the other side what they really want, and at the same time look to save yourself some dollars.
Negotiating is easy once you get the hang of it. Just remember, you're working BOTH sides to bring the other party into line with what you want.