The Small Business Voice

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(1) Be organized,
(2) Know your strengths,
(3) Know your weaknesses,
(4)  Know what’s important, and
(5) Hold your ground.

If you’re a small business owner or employee charged with negotiating your company’s contracts or subcontract agreements these may indeed be frightening times.  With the economy apparently in an indefinite downturn you may feel that you have even less negotiating power than you had in the past.  Each new contract could be the one that makes the difference between meeting the payroll and closing up shop.

I suggest to you that you have more power than you think!

Most large corporations, local government and federal government entities include a small business subcontracting requirement in all contracts for new work.  A large business that fails to make a good faith effort to utilize qualified small business can find themselves in big trouble. 

Your success is based on the old Boy Scouts’ motto “be prepared.”  Below are 5 steps to get you there:

(1) Be organized.  Before you pick up the phone to call, or sit across the table from the large business representative or the government representative you need to know the players, what’s at stake for each of the parties and why this work is important.

(2) Know your strengths.  You have to know what your company does best and what you bring to the table.  If you’re not confident in your strengths you’ll be at a weakened negotiating position.  There is a reason you’re there in the first place.  Know what that is.

(3) Know your weaknesses.  You don’t need to be all things to all people.  Focus on what your company does best and don’t try play up or downplay your weaknesses.  Acknowledge them to yourself and to those around the table if necessary, but don’t belabor them.

(4) Know what’s important.  Some things are more important than others in negotiating an agreement.  For example, a draft subcontracting agreement may include some restraint on your firm’s ability to seek work from the ultimate client for some time in the future.  Something  this simple could hamstring your company’s options in the future.  Jurisdiction, choice of law, and choice of venue provisions could also put your company in a deep hole – having to defend a suit or dispute in a far off state, based on unknown law.  These are just a couple examples, but you need to know what’s important to you.

(5) Hold your ground.  You’ve got to be willing to stand your ground on what’s important to you.  Be willing to compromise of things that are less important to be able to hold out on the things that are more important.  If you’re prepared you’ll know the difference.  And by all means, never sign an agreement without having the opportunity to take it away and review it.

If you remember these five basic tips your negotiations will go much more smoothly.