As an entrepreneur, you will enter into negotiations on a regular basis with suppliers, employees, prospects or clients. There are times people just need you to go the extra mile in order to keep a project moving forward toward the goal. It's OK to trust your gut and make someone happy, making an investment in goodwill. Other times, people may be out to squeeze the profit out of you, or pressure you to meet unreasonable expectations. Their demands are a way of gaining control of the transaction and taking your power away. This is a critical stage in a business relationship. Will you blink first? There is a lot of information available out there on negotiating. But one simple, easy to remember principle that I picked up along the way has served me well over the years... if you concede something, require something in return Some examples... Client requires a discount to meet a budget. Ask for flexible scheduling, even possibly putting them on waiting list. Client requires a discount to meet a budget. Reduce the scope of the project. Offer payment options and flex plans to defer costs. Client needs work completed ASAP. Charge an 'after-hours' premium. Ask if they have labour they can contribute. Client insists on certain materials or brands, perhaps very expensive paint. Ask the client to buy the materials; consider not offering warranty. Supplier needs to raise prices on materials. Ask if there is a cheaper alternative. Supplier needs to raise prices on materials. Ask if they can deliver the materials to your job sites Why is this important? It comes down to mutual respect. When a client and supplier trust each other, the give-and-take is seamless. But it's good to be aware of a client trying to dictate terms. It's a red flag. If the balance of power tips too heavily to one party, the other may be getting taken advantage of. Either way this is not good for you. If the client has all the leverage it can expose you to a lot of risk and cause a lot of stress. Standing up for yourself doesn't always come naturally but it's important. One of the reasons you got into business for yourself was to have some autonomy in your work life. Don't allow someone to take it away. I've noticed some clients require a price concession before they agree to terms. You must respect their desire to 'win' a good deal if you expect to get the sale. Find some strategies ahead of time to meet the need for a discount while still meeting your needs. For example, you can discreetly state that a 10% discount is available. People that care primarily about results may inquire about it but it probably won't be a deal breaker. It does alert people looking for a deal that one is available, if their project qualifies. In this case, it's being put on a waiting list that could mean a wait of 2 weeks to 6 months. Some people don't care when it gets done and are happy to save the money. I'm happy to have work banked for slower periods. Win win. You don't want to be adversarial with potential clients. You also don't want to be unyielding, only concerned with your needs. But if you've done a solid job putting a fair proposal together and reviewed it, confidently stand your ground. If you are asked to give something up remember that you can require something in return, even if it isn't of equal value. It should set the tone for a respectful and mutually beneficial relationship. If you appreciate the free content on MicroContractor Blog, please share with a link and click the article sponsor's ad:
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