Business Skills
10 Contract Negotiation Tips Every Business Owner Should Know
The contract you sign today defines your business relationship for years to come. Yet most people treat negotiation as confrontation rather than collaboration. Here's how to get better terms while building stronger relationships.
💡 Tip #1: Never Accept the First Draft
The first draft is their wish list, not the final word. Assume everything is negotiable—because it usually is.
💡 Tip #2: Know Your BATNA
Best Alternative To Negotiated Agreement. If you have options, you have leverage. Never negotiate from desperation.
💡 Tip #3: Start with the Big Items
Negotiate price, scope, and timeline first. Don't waste goodwill on minor clauses before tackling what matters.
💡 Tip #4: Ask "Why?" More Often
"Why is this clause necessary?" often reveals flexibility. Sometimes clauses exist because of old fears, not current needs.
💡 Tip #5: Trade, Don't Take
Instead of "remove this clause," try "I'll accept this if you modify that." Trades feel fair; demands feel hostile.
💡 Tip #6: Put It in Writing Immediately
Verbal agreements fade and morph. After every negotiation call, email a summary: "To confirm, we agreed on..."
💡 Tip #7: Know the Market Standard
Is 50% upfront normal? Is Net 30 standard? Research gives you credibility: "Industry standard is X, so let's start there."
💡 Tip #8: Be Willing to Walk Away
The most powerful negotiation tool is the ability to say no. Bad contracts cost more than no contracts.
💡 Tip #9: Negotiate with the Decision Maker
Negotiating with someone who "needs to check with their boss" puts you at a disadvantage. Ask to involve decision makers early.
💡 Tip #10: Use Time Pressure Wisely
Artificial deadlines create bad deals. If they're rushing you, that's a red flag. Good partners give you time to review.
Before You Negotiate: Know What You're Signing
You can't negotiate effectively if you don't understand the contract. Use AI to identify the clauses that actually matter before the negotiation starts.
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