A small company will understandably often sit back in awe when trying to do a deal with a much larger company. After all, industry titans can weaken fledgling competitors by stealing their ideas and secrets during pre-contract talks or by violating contract terms, safe in the knowledge that they have the financial resources to withstand any legal challenges.
But just as David toppled Goliath with a carefully aimed stone, junior companies can put any dealings with the big guys more or less on even footing by following a few simple steps, says Peter Johnston, the Montreal-born author of a new book, Negotiating with Giants, and managing director of boutique consultant NAI in Cambridge, Mass. For instance, never reveal more than you’re comfortable losing. Johnston says one Canadian farmer selling flavoured sunflower seeds to Wal-Mart politely refused to reveal the secret ingredients, allowing him to hike his prices, because the retailer couldn’t source his product anywhere else.
“Even with a non-disclosure agreement in place or legal protections such as patents, you should only provide enough information to attract a giant’s interest,” says Johnston, “without giving them anything that could be used to undermine you.” Instead, use filtered high-level data that reflect positively on your company, as well as credible testimonials from other companies.
Respected third-parties can also be brought into the negotiation process, offering a ready supply of “effective arm-twisters” who usually produce much better results than duelling lawyers should your giant stray. It’ll also be a lot cheaper than losing your business.