Introduction

Stepping into contract negotiations without a game plan is like trying to score a goal blindfolded—you might get lucky, but chances are you'll miss more than you hit. When running a small to medium-sized business, you’ve got to know your plays and make sure that every contract you sign works for your business.

Here’s a playbook with the top five contract negotiation tips to help you secure the best deals and protect your business interests without dropping the ball.

Read: How can I amend a contract after signing?

Tip 1: Know your non-negotiables

Before you even sit down at the negotiation table, know what you absolutely must have in the contract and what you can bend on. It's like knowing your best poker hand—you don't fold on the essentials. Define your deal-breakers and make sure they're clear in your head. Whether it’s payment terms, delivery timelines, or scope of work, knowing your must-haves keeps you from giving away too much.

It’s easy to get caught up in the back-and-forth and end up agreeing to terms that don’t really work for you. Stick to your guns on the big stuff, and you’ll navigate negotiations like a seasoned skipper.

Tip 2: Do your homework

Understanding the other party's background, needs, and pressures is like having a secret dossier. The more you know, the better you can tailor your proposals and counteroffers. Dive into their business practices, market position, and even past negotiation behaviors if you can dig them up. This information is golden and can be the ace up your sleeve.

When you understand the other side's goals and constraints, you can craft offers that are hard to refuse. It’s all about creating a win-win situation where both parties leave the table satisfied.

Tip 3: Keep communication clear and concise

When it comes to negotiations, clarity is king. Keep your language simple and direct. Avoid complicated legal language unless necessary, and always confirm that the other party understands your points. It’s like making sure everyone in the choir is singing the same tune.

Misunderstandings can derail negotiations faster than a typo in a tweet can spark a PR nightmare. Clear communication ensures that both parties are on the same page and helps avoid conflicts down the line.

Read: What does executing a contract mean?

Tip 4: Stay cool, calm and collected

Negotiations can get heated. It’s important to keep your cool, even when the other side might be pushing your buttons. Think of it as poker—don’t let them see you sweat. Maintaining a calm demeanor helps keep the negotiations professional and productive.

Emotions can cloud judgment. By staying calm, you ensure that you are negotiating based on logic and strategy, not on spur-of-the-moment feelings or ego.

Tip 5: Be ready to walk away

Sometimes, the best move is to fold. If the deal doesn't meet your minimum requirements or if the negotiations are going south, be prepared to walk away. It's not about being stubborn; it's about recognizing when a deal isn't beneficial.

Not all negotiations will end in a deal, and that’s okay. Walking away from a bad deal is much better than sticking with one that hurts your business in the long run. Plus, showing that you’re willing to walk away can sometimes bring the other party back to the table with a better offer.

Read: What are boilerplate clauses?

Conclusion

Negotiations are an art and a science—part poker, part chess, and a little bit of high-wire diplomacy. Use these tips to not just survive your next negotiation, but to thrive and seal a deal that’s good for your business.

Remember, every negotiation is a learning experience. Whether you nail it or face some hiccups, each session is a chance to refine your strategy and enhance your game for the next round.

How Cobrief can help with contract review

Reading your business contracts can feel overwhelming as an owner-manager of a small to medium-sized business. That’s where Cobrief comes in. Cobrief helps business owners and operators review their business-to-business contracts for legal risks.

Upload your contract to Cobrief's AI contract review software, click review and you’ll get a list of all the risks, in plain English. This helps you decide whether to sign, negotiate or reject the terms of your contract, or hire a lawyer. Think of it as a heat map for your contracts.

Get started here.