To say the least, it is difficult to predict what tomorrow will bring. From a pandemic to social unrest, what once was “normal” is not only out the window, but in the opposing lane zipping by. Businesses who are lucky enough to remain in operation may be troubled by the uncertainty that lies ahead. How do you do business when you have fluctuating confidence in the future? From a contracting perspective, here are some tips to consider as you move forward:
- Continue to treat everyone with a measure of understanding. We all may show up for that negotiation as professionals, but we’re bringing more of life as a whole to the table these days. You never know what another person’s struggle may be, so be kind, and be reasonable.
- Recognize that even though demand has softened, that is true for most businesses, not just the seller you’re speaking with. Buyers who can avoid exploiting any pricing leverage that may exist will build stronger relationships, will help their key vendors stay in business, and may even receive some otherwise unavailable concessions as a result. Be reasonable in your asks, pay reasonable rates, and be part of the tide that lifts all boats.
- If you’re a seller, discuss commercial strategy internally. This is always a good idea, but depending on your business’ financial health, there may be additional concessions and asks that will become part of your playbook.
- Look for a shorter contract duration. Can you make a shorter commitment and renegotiate later? Just make sure you’re buying or selling enough to actually realize a benefit.
- Consider creative payment plans. Can you delay payment to “net 60”, or 90, or 120? Can you pay some now and the rest later? Cash will be important for both sides, depending on the business model, so be willing to discuss how to meet each other’s needs.
- Try before you buy, if possible. Some of the risk in purchasing is whether you’ll receive the benefits you want. Is there a free trial period? Can you get your hands on an interactive demo or a sample? If you can improve the probability of success, its easier to commit to the cost.
These are just a few areas to focus on, but if you have other ideas, please feel free to reach out below, or on LinkedIn.