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Top 5 tips for negotiating contracts
Five great tips on how to get the best results when you enter contract negotiations.
A lot of people in business find negotiation a tricky area. I loved Bernie Ecclestone's approach. For anyone who doesn't know, he's the guy who made billions from Formula One. Bernie had a thorough understanding of what he valued in something and therefore entered a negotiation knowing exactly what he was prepared to pay - not a penny more.
Like Bernie, know what you value and why - so be prepared to walk away. It's amazing how many times people accept your offer if you just say, 'take it or leave it.'
Seek to understand the opposite party's point of view, objectives, and values. See things through their eyes and use this ability to shape your position and tactics: what to yield on, what is important to them but not to you, and what buttons to press to get the response that you want. By understanding what matters to them, you can build trust, and get a solution that works for everyone. Sometimes when you negotiate, people don't understand the full value of what you have to offer; take time to make sure they do.
Keep everyone happy
Some people tend to think that you must win a negotiation by getting the best deal for you and the worst for your opposite number. I don't agree with this. I find that a win-win works best and builds lasting outcomes that make everyone happy. The key is getting what you want - while the opposite number feels that they got what they want.
Practice and rehearse
If you watch a lot of great sports people, they have already rehearsed and when they are putting on the 18th green or taking a penalty in the FA Cup, they've already done it a million times - in their heads! You can do this in negotiation too: you can role play your points, your objections, your reactions to your counterpart's questions, so you know how to react to any potential point of disagreement and you aren't caught off guard.
Know the details. Read all the fine print in a contract. Know what everything means, what the implications are, and what the really important points are to negotiate on and not yield on. I often find people will say to me 'don't worry about that point… it means x, but we've never used it.' Well, for me if it's important enough to be in the contract, it matters. And if I'm not happy with it, I'm not signing.
Image credit: Victor1558