Business Tips 101: Contract Negotiation

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Do you want to learn how to be effective in contract negotiation and secure that huge deal you’re eyeing? You’re in the right place keep reading to learn how.

Contract negotiation is an important aspect of any business relations. In most cases, contract negotiators are smart individuals who know how to get ahead of their competitors to secure huge lucrative deals, which will be in favor of the organization. However, in recent years to effectively succeed in contract negotiation, depending on your ‘smart’ ability and charisma may not be a guarantee to success. Rather one should opt to carry out thorough preparations before the negotiation so that they can be on top of the game. Moreover, when carrying out contract negotiations both the two parties should work towards coming to a common ground rather than one party obtaining more than the other party. Such an instance will ensure that the negotiation is fair and beneficial between both parties.

Determine Your Contract Negotiation Situation

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Considering a contract negotiation situation before the actual meeting is essential. This will help in gauging whether your organization will benefit from the contract negotiation.  A negotiation that is less likely to give you any benefit should be shunned since there will be no advantage gained from the communication. In most contract negotiations, a meeting should be carried when there is a benefit to be gained by the organization.  Once you have determined the benefits that are likely to be obtained from the negotiations, other preparations can then be carried out. A management system can be used to track the status of the negotiation and to keep notes. Any business that wants to grow should have a management system in place. They can either pay for a service like Salesforce, etc. or get their own learning design system developed by an industry professional. Usually, large-scale businesses prefer to have their own learning design systems that suit their needs and fulfill their demands.

Identify Issues to be Negotiated

Before engaging in any contract negotiation, you should identify and list down the most important issues that you are likely to explore during the meeting. This involves carefully going through their terms with your team and identifying issues that you need more clarification or does not agree with. Once you have identified crucial issues research on those issues to obtain full and adequate information on the topics. For instance, in case you’re in disagreement with the pay rate they are issuing, you should have adequate information on the market’s price of the product/service.

Compile an Agenda

Once you have identified issues to be discussed you need to classify them in a priority list, in which more important issues should appear on the top of the list to be negotiated first. Also, when compiling your main issues allow the other partners to highlight their problem areas in your contract so that they can be featured in the agenda.

Research on your Negotiation Partners

When you’re about to engage in contract negotiation with any business partner ensure you carry out a thorough analysis and research on their organization, brands, and policies to determine what will work in your favor. This will give a clue of their strengths.

Plan and Organize your Negotiation team

Carrying out a contract negotiation means that you’re representing an organization, a brand, or your company. Therefore, before indulging in any communication you should ensure you have other individuals that will be part of your negotiation team. The additional individuals will help you in the negotiation process. Therefore, you should ensure you’re all speaking the same language, and have delegated duties on when each one of you will be speaking in the setting. All the team members/managers involved in the negotiation should be proficient users of the company management system that tracks every aspect of the client negotiation. This will keep every team member up to date on the negotiations and avoid miscommunication. The team members can undertake training certification programs of the management system to master the system.

Decide on your Negotiation Style

When you’re planning to engage in a negotiation contract, you should decide on what negotiation style you’re going to adopt. This can also be decided based on the data entered by every team member in the learning design system. Based on that, you may opt to go on negotiation with an absolute aim to win no matter what, or you may decide to choose to engage in a negotiation in which you may choose to lose to win. This implies walking away with the best alternative even if it may not be the best.

Prepare Mentally

To fully benefit in a negotiation, you should be in the right mental state. This involves preparing thoroughly before the negotiation with your team and having the right attitude before meeting your partners. Some factors to consider include:

  • Carrying yourself in a business-like manner while containing your emotions in conversations.
  • Talking clearly with your partners to ensure they fully understand your point of view.
  • Stay relaxed during the meeting without feeling unhurried.
  • Maintain your confidence without feeling too important or less important than your partners.

Preparing for contract negotiation does not fully guarantee success in the meeting but it’s a step in the right direction. By fully preparing you will be on your way to get the best deal possible in the negotiation process.     

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