Brownsburg Chamber of Commerce issued the following announcement on Jan. 27.
Sometimes walking away from an offer is the best move. For example, Joel Clark and Cameron Smith, the leaders of Kodiak Cakes, walked away from offers on the show "Shark Tank" in pursuit of a better deal. Today, their company is a huge success. This article provides some advice to help you figure out if you should follow their lead and leave business negotiations of your own.
Assess the Potential Fallout
Accepting poor contract terms can, of course, harm your business financially. But there are other risks to beware of, including the following:
- Unreasonable demands on your employees. If the contract insists on a level of production that will place undue strain on your employees, consider whether it's worth making your employees unhappy — and potentially losing them.
- The loss of time. Does this deal have the potential to eat up too much of your and your employees' time? For instance, if there needs to be rework, does that fall on the other party or on your business?
- The loss of reputation. Will entering this deal damage your company's image? For example, if honoring the terms of a new contract will make it difficult to meet the other obligations your business has, think twice before entering it.
It's important to ask specific questions of the other party. For example, if you're negotiating with a vendor, you might ask what their unshakable priorities are. Perhaps they absolutely need an agreement that moves a certain number of goods but are more flexible elsewhere.
Such a discussion can open a dialogue during which you can also communicate your own intentions and nonnegotiable priorities. You may be able to identify tradeoffs on issues that are less of a priority for both sides. Alternatively, questions and dialogue can help you get a sense of if a deal is truly untenable.
Have a Plan B
Walking away only works if you have somewhere else to go. That's why it's important to develop a plan B, often known in the business world as a best alternative to a negotiated agreement. Having a BATNA can help you avoid being pressured into a truly unfavorable deal.
Emphasize Contract Presentation
A well-written contract will assist everyone involved in the negotiations. Contracts provide vital protections, cover critical details, and help reduce the chance of future confusion. That's why it's important to make sure the contract's presentation is up to snuff. Your counterparty may, for instance, take a sloppy contract as an insult or seek to exploit vague areas in it down the line.
Additionally, getting details in writing is vital for helping you assess whether it's worth sticking with a deal. Consider having a contract lawyer review your document and using helpful software like a PDF file merger to lessen the chance of errors.
Walking Away
Asking detailed questions in good faith can help you figure out if negotiations are salvageable. But if it seems your business would sacrifice its employees' happiness, its essential priorities, or even its reputation by entering a contract, it's likely time to walk away.
Your local chamber of commerce can be a great business resource, so join soon.
Original source can be found here.