How to Define What's Negotiable in Your Business Agreements

As a businessperson, you know it's critical to be proactive in all negotiations. Determining what the bottom line is can be challenging. The best agreements ensure both parties are satisfied with the outcome.

Know What You're Willing To Give Up

The best way to ensure a fair agreement is to know all your negotiable points, and this requires extensive knowledge of the topic at hand. David Vranicar, the managing partner and founder of Fortified Ballistic Security, suggests business owners go into every discussion with a checklist of negotiable items.

It might be helpful to think about your ideal scenario to discover what's negotiable. Then, you can create an alternative version of the same plot with fewer items on the list. With the core items still in place, you can eliminate one component at a time and decide whether to compromise on each issue.

Common Negotiables

What's negotiable depends on your business and goals. Typical negotiable examples include:

• Price. A business owner should presumably never offer to pay more than they can reasonably afford, but sometimes you need an edge in price negotiations. Use a cost range with other stipulations to win what's vital for your company.

• Timing of payment. Everyone wants a quick turnaround, but it's often more expensive to go that route. Consider flexible timing to ensure success in discussions.

• Scope of work. The more you have included, the more it will cost your company, so understand trade-offs ahead of time. Know your limits and how much you're willing to spend on different aspects.

• Arbitration/dispute resolution methods. One party or both might want to avoid court proceedings. A business owner who wants to skirt that process should agree with it upfront, trying to set up a more informal means of discussion. Meanwhile, businesses that want the process would have to negotiate alternate arbitration or dispute resolutions methods.

• Freight costs. Freight costs can be a significant part of your budget in some businesses. The best way to approach this issue is to ensure it's covered in your contract or that you've already outlined prices in different scenarios when the cost is unpredictable.

Use Your Strengths to Get the Concessions You Need

Your strengths and the strength of your position can help you get what's negotiable without compromising too much. If you're prepared, then your skills will prove invaluable. Negotiating experience can help you define negotiable and achieve the best business agreement. 

Consider using your position to show what's negotiable by asking for an agreement without the item first. If the other party feels it is essential, they will propose another option. You can still request your desired outcome by offering them something else in return, narrowing down the negotiation process, and making it more efficient.

Examine the Contract's Appearance

Besides what's negotiable, examine the contract. Just as you would hire an editor for your professional writing, you must edit your agreement before sending it off. Ensure that it's easy to read, doesn't miss any points, and merge PDF into one accessible document so it’s easy for anyone to view.

You can learn more about business negotiations by interacting with local companies. Join your local chamber of commerce to make more connections in your industry.