Perfect Pitch – how to make sweet music when negotiating contracts.

The path to market is strewn with hurdles for even the most exciting and innovative start-up, and learning to leap them is just part of the process. Every business needs to sell to succeed, and one of the largest hurdles you will face is negotiating contracts with potential customers. 

Whether we realise it or not, life is a series of contract negotiations, whether it be convincing a potential partner that you are their best shot for a happy and fulfilling future, getting the best deal on a used car, or coming up with a mutually agreeable solution to getting a reluctant teenager to study for exams. These life skills are also applicable to a business context, and those who are aware of that fact will have a good head start when it comes to the cut and thrust of the boardroom.

Good contract negotiation comes down to three things  – we’ll call them the 3 P’s (for reasons that will swiftly become obvious!)

Planning: Know your market, know your audience and know your stuff. Preparation for your first contract meetings is key – you need to have all the facts at your finger tips, so that you can go in and prove that you may be an early stage business, but that there is no question that you cannot answer, and no objection that you can’t address with a smart solution.

Persistence: No-one said it would be easy. For every contract you win, there will be many that you don’t, and it’s easy to lose your nerve. Everyone is in the same boat, and it’s the ones who pick themselves up, dust themselves off and get straight back out there who will ultimately make a success of their proposition. Persistent doesn’t mean pushy though. Your job is to present the facts, make your pitch compelling, and let the product/service speak for itself. Know when to quit. If a potential customer is determined to get the cheapest deal possible and will not meet you half way on price/terms, it’s better to walk away with your integrity intact, than to adopt the ‘Pile em high, sell em cheap’ mentality which will ultimately devalue your offering.

Practice: Like all business skills, the ability to negotiate successfully has to be learned – some people are born to do it, making the journey easier, and some are not – but this doesn’t mean that they cannot be as effective as someone who has it hard-wired into their DNA. Winning isn’t the be-all and end-all. Failure to agree mutually satisfactory terms is not failure – don’t undervalue your proposition by accepting terms that you aren’t happy with. If your negotiations don’t result in a win, don’t look on it as a failure, but as personal development.

Negotiation skills take practice, and every meeting you go to, even if ultimately unsuccessful, is a step along the road to becoming a negotiator of repute. Get into the habit of carrying out a post-mortem of every meeting, analyse the process, and learn from your findings. Ask yourself the same questions after each meeting, and very soon, a blueprint for successful negotiation will emerge.

·         Were you prepared?

·         What useful information did you obtain about the potential client?

·         Did you fully utilise this information when preparing your proposal?

·         How did the meeting itself go? Where do you think you performed well?

·         What didn’t go so well? Why was that?

·         Did you get the outcome you expected?

·         Regardless of whether the meeting was successful or not, what will you do differently next time?