During contract negotiations, the other party presents a lot of information. They may provide sourced facts, statistics, and industry information. The counterparty may even be giving information from their inside expert. However, it's essential for you to come armed with information gleaned from your own research to avoid relying solely on what the counterparty provides.
Don't Rely on the Counterparty's Information
Relying solely on information from the counterparty can set you up for a bad deal. They may be providing information from an "expert" who isn't an expert at all. If the other party wants to support their terms with expert information, ask about the expert's credentials. What makes this individual an expert in their field? What is their schooling, and what training, certifications, and experience do they have?
It's also important to realize the information provided by the counterparty is likely biased towards their own opinion. Biases can happen during research when someone begins with a predefined idea of what they want to prove.
Only You Know What Your Company Needs
You're the person in the best position to know what your company needs. Before entering contract negotiations, create a ranked list of what you need to achieve for the deal to be profitable. It may also be helpful to create a second list of things you're willing to give up to achieve your top objectives.
While creating your list of primary objectives, make sure you research your industry, the counterparty, and how the economy affects your markets. This information can help you better understand the other party and what you can expect from contract negotiations.
Walk Away if Necessary
Nobody wants to walk away from negotiating a contract, but you can't win them all. Sometimes the best option is to walk away. Accepting a lousy offer can have adverse effects on your company. A bad deal doesn't just affect your business relationship with the other party but can also damage your overall reputation and the financial well-being of your company. A good rule of thumb is to walk away if you can't meet your minimum primary objectives.
Present an Attractive Contract
One of the easiest ways to ensure smooth negotiations is to present an attractive contract. Ensure the proposed contract is detailed and answers the most pertinent questions. In addition, it needs to be organized and aesthetically appealing. You can convert your document from JPG to PDF to help with a presentable contract.
You may want to consider using basic colorology principles in your contract. Colorology is a theoretical science that says specific colors can invoke emotions in people who see them. Strategic use of color in your contract may play a role in your counterparty's perception of the deal.
Don't forget the importance of how you present the contract. Appear confident in what you're offering, as well as open and friendly.
Don't Rely on the Counterparty's Information for Negotiations
Never rely solely on the counterparty's information during negotiations. The information may come from false experts, and research may be biased in the other party's favor.
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