One of my law school professors told me that in life, everything is negotiable. I brushed it off as lawyer banter, thinking of course lawyers would say that, but it wasn’t until I started testing the theory that I saw just how true this very statement is. One would think that when you’re purchasing products and/or services from a business establishment and the merchandise has price tags or employees tell you the cost for their services, that’s just what it is. However, this is merely an offer to transact at that price that you can accept or reject and counter. Now, they can be firm in their offer and say take it or leave it, but you just never know unless try. Literally, everything is negotiable.
I say all that to say, as small business owners transacting business with larger companies (or even other small businesses), negotiate your contracts with these other businesses. Don’t get caught up in the hype of being a small business and thinking that you just have to take the contract as provided, sign it, and keep moving. That is in fact the worst thing you could do. I advise all of my clients when working with other parties to (1) memorialize the relationship in a writing, (2) draft the agreement and if you can’t be the drafter, thoroughly read the contract, and (3) negotiate it.
Here are a few tips:
- Consult an attorney. Lawyers are trained in legalese and are experts in dissecting convoluted information. Our knowledge and understanding of contracts and the law is an asset to even the most sophisticated business owner.
- Avoid any agreements that are of unknown lengths that you sign electronically because you certainly aren’t reading any of the terms and conditions therein and have no idea what you’re agreeing to. Always ask for a hard copy and review and modify it prior to assenting.
- Take your time and plan ahead. The last thing you want to do is be in the position of rush contracting. That usually never ends well. Lack of time will inevitably lead to poor decision making. Give yourself time to explore your options, understand the pending transaction, and to consult an attorney to advise you of your rights.
- Do some research. Knowledge is power. You can find out if the products or services you seek or provide are in high demand which in turn effects the compensation terms. You can find comparable services and/or products to determine the right choice for your business needs, and even create small bidding wars if others are competing or your services and/or products or your business.
- Never sign a contract that you have not read or negotiated. If you’re not going to read it, just don’t sign it. And if you are going to read it, you should definitely counter with terms that are more favorable to your business. Please believe that any agreement handed to you is not drafted in your favor. There is certain to be something that you would want to change. Change it! Everything is negotiable!