4 Signs You're Not Doing What's Best for Your Business

Every time a business owner sits down at the negotiating table, they hope to get a big win for their company. They want to succeed but all too often mistakes they make weaken their position and lead to outcomes that are bad for business. If any of the following statements apply to you, you may not be doing what's best for your company:

1. You Don't Know Your Vendor

Would a boxer ever walk into the ring with their eyes closed? The idea is ridiculous, but if you haven't taken the time to research your vendor, you're doing that very thing. Before you face them in a negotiation, you need an understanding of their current financial health. One study found that during COVID-19 shutdowns, 43% of businesses temporarily closed, and 40% experienced a reduction in staffing. It's likely the pandemic presented your vendor with some challenges that will continue to impact them in the future. Identify potential weaknesses before you start discussing the contract, so you can negotiate from a place of strength.

2. You Haven't Put Much Thought Into the Presentation

On the day of the negotiation, you'll dress to impress, but will your contract presentation look as sharp as you do? If you present a sloppy contract, the other party may believe you're unprofessional or even vulnerable. Review the contract thoroughly for typos and calculation errors. Be sure to merge PDF​ files in order to create electronic documents that send the right message.

3. You're Feeling Fearful or Anxious About Negotiations

Fear has no place in contract negotiations. Letting these emotions rule you can cause you to make decisions that lead to losses in the form of time, money, staffing, and reputational standing.

Often, being brave enough to walk away from a deal pays off in the end. When owner Jamie Siminoff presented the concept for his smart doorbell system on Shark Tank, he requested $700,000 for a 10% equity stake in his company. Most of the sharks believed he was overvaluing. Only Kevin O'Leary showed interest, but he offered a loan. Siminoff believed his valuation was correct, and so he walked away without a deal.

In the years that followed, Siminoff acquired the funds from other investors and enjoyed a boost in sales from his appearance. Ultimately, he sold the company he renamed Ring to Amazon for $1 billion.

4. You Don't Have a Strong Network

A strong network is like having a hallway full of doors. If you need to exit contract negotiations, you have other potential vendors or contacts that can recommend alternatives. To build your network, consider attending trade shows. An Oxford Economics study found that 48% of respondents cited the opportunity to meet new vendors as their main reason for attending shows. Local and national organizations like your local chamber of commerce can also assist with your networking efforts.

Put Your Company First

Avoiding these mistakes can help you do what's best for your business during any contract negotiation.

Join your local chamber of commerce today to start building up your network to assist you when deals fall through.