Business Tips: 4 Steps for a Successful Contract Negotiation

Business is an ongoing back-and-forth between interested parties. Contract negotiations, whether they be with employees or a competing business, can be contentious. There’s a lot at stake and big feelings are involved. A successful contract negotiation is one where all parties feel they got something out of the deal. This isn’t wishful thinking. By following these four simple tips you can create an environment where everyone is heard and respected.

1. Multiple Meetings

The first tip is pretty straightforward. Break down the negotiation into multiple sessions. The longer you sit at a table arguing over the same points the less likely you’ll come to an agreement. Give the person time to digest the information. Clear eyes and a fresh head make for better judgment.

2. Focus on Interests not Positions

The second tip involves removing emotion from the table. If a person is angry or frustrated, chances are it’s not because of you. Identify the interests behind the issue. Business is a world of clashing personalities and ideas. Depersonalize the process by removing statements like, “I think” or “I believe.” Instead, focus on the facts. If an employee is asking for a salary increase you can’t afford, then be honest. Say something inclusive like, “We don’t have the funds right now.” This way you’re not making a judgment about the person’s abilities, which can lead you into trouble.

3. Know your Priorities

The third tip is all about you. What do you want to see happen? Know what you want before you go into the negotiations. This doesn’t mean you should box your ears and ignore what the other person has to say. Good faith negotiation requires keeping an open mind. Still, knowing what you want and expressing those views provides a starting point that is clear to the other party.

4. Ask Questions

Finally, don’t be afraid to delve deeper. If the other party is coming back to the same issue it’s okay to ask why. This is clearly an important topic to them, so find out why it’s so critical; just be mindful of your approach. You want to sound interested and not accusatory.

A successful contract negotiation will help your business. These four tips are a good start. If you need further guidance consider consulting an attorney like those at Structure Law Group. This is a good idea if you need clarifications about contract law or have an especially difficult other party.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Photo Credit: Jonny Goldstein via Flickr

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