You’re sitting across from a giant customer who could drastically improve your business. They give you a lowball offer. You’re nervous. What’s your move? If you’re like Ryan Marien, who as CEO of online consumer goods and services marketplace Buytopia has brokered deals with such behemoths as Best Western, you counter aggressively. “I think most small businesses aim too low,” he says. Going bold, he adds, has only earned him favourable terms.
Too often, small business owners lack the confidence to negotiate aggressively. And they tend to take the process too personally: A 2013 study from the University of Oxford demonstrated that entrepreneurs are inclined to express more emotion at the bargaining table, to their detriment. “Small businesses both feel and are disadvantaged when dealing with much bigger companies,” says Susan Onaitis, the New York–based author of Negotiate Like the Big Guys. “They anticipate that they’re going to be pushed around, they feel like the underdog, and they end up giving away more than they get.”
It doesn’t have to be so. In fact, there are several tactics you can employ to hold firm in even the most intimidating negotiations.
As CEO of Happier IT in White Rock, B.C., Lee Van Iderstine has learned one key trick from negotiating with large clients for decades: He will never concede something without a concession in return. “If they want a discount or to add specific insurance, we’ll make sure we get something for it,” he says.
Experience helps breed that kind of confidence, but so does training, says Onaitis. “It takes practice, confidence and planning. If you shoot from the hip, you’re not going to get the best deal.” She recommends seconding an employee to rehearse an upcoming negotiation, with you taking the role of the person you’ll be dealing with. “You can get a real sense of what they might ask for.”
It also helps to know what pressures your adversary is facing. “If you can help them hit their end-of-quarter or year-end milestones, they have more incentive to give you a break on the price,” says Marien.
Finally, know your bottom line and hold to it. “Remember,” says Onaitis, “you can always walk away from business if it’s going to take money out of your pocket.”
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