Contract negotiations can feel like a drawn-out, frustrating process. The good news? They don’t have to — with planning and preparation, contract negotiations can be smooth sailing. Consider these tips for reaching a successful negotiation.
1. Start with a draft
Before authoring a formal contract to negotiate, ensure you and the other party agree on the main points of a contract. Use a straightforward term sheet. If it gets too complicated at this point, go back to the beginning and start on new terms.
2. Break it down
Getting one party to agree to wide swaths of a contract isn’t realistic. Break the contract into pieces that can be agreed upon separately. These smaller agreements will make up the larger contract, and this strategy will help avoid the “all-or-nothing” approach to contract negotiations.
3. Keep it simple
Complex contracts with lengthy detail and nuance will further complicate negotiations. Start with simple and clear terms that everyone will understand, even if it avoids some of the more nuanced advantages of complex contracts.
4. Know your “why”
Understand why you want to do business with the other party. Go beyond the competitive or aggressive mindset of getting the most out of the contract and aim to work collaboratively. How can this relationship benefit both parties?
5. Prioritize
Go into a contract negotiation process with a keen understanding of your top priorities from the arrangement, as well as how other risks or rewards rank after your initial needs are met.
6. Ask questions
Get to know as much as you can about the other party’s interests and goals before starting a contract negotiation. By understanding that business’s motives and needs (or pain points), you can better align your negotiations with moves that support your company’s needs while still meeting the other party’s interests.
7. Bring your research
Support your claims with appropriate data or testimonials from similar clients.
8. Get emotions out of the way
Business negotiations are just that — business. Avoid complicating the process with personal feelings. Eliminate “I think” or “I feel” statements and focus on facts.
9. Take a positive approach
Express appreciation for the other party and what they bring to the table. Find points you can agree on. Set the tone for a contract negotiation process that will best serve both parties’ interests.
10. Go slowly
Take your time before, during and after the negotiations. Plan to complete research and required documents well in advance of any meetings or negotiations. Avoid making hasty decisions during the process. After negotiations wrap up, follow through on any questions or deliverables.
Source: Ironclad
