• 10 Items to Negotiate in Every Contract

  • Offer Valid: 03/31/2022 - 04/30/2024

    Before negotiating a contract, it's important to define your must-haves. Of course, you should decide on your bottom line and stick to it. On the other hand, don't let a potential offer crumble due to less important factors.

    Use the checklist below to think creatively. Remaining flexible and offering a few compromises can help you close the sale.

    1. Material cost. While the cost of the raw materials for your project is usually fixed, that's not always the case. Shop around to find the vendor with the best deal on materials. It's up to you if you'd like to pass those savings along to your client in the negotiations. 

    2. Labor cost. When it comes to labor, it's good to give the client options. Some clients prefer to pay a premium for the best talent and get the job done fast. Others want to roll up their sleeves and pitch in on labor themselves. Come up with a few proposals.

    3. Facilities/travel cost. These days, it's become a lot less important where the work gets done. Consider charging more for on-site help and a reduced rate for remote work. 

    4. Contract term length. A few reliable clients with iron-clad contracts can provide long-term stability to your business. Think about reducing your rates if the partner commits to a longer term.

    5. Start date. Most businesses have some degree of seasonality. Consider charging more during your peak times and offering a slight discount to stay busy during the slower months.

    6. Due dates. Just as the postal service charges more for faster shipping options, you can raise your rates dramatically to get the work done faster. Rush fees are a great way to up-sell.

    7. Payment terms. Evaluate the creditworthiness of your potential partner. Then decide: Will you ask for 10% at signing or 50%? Is payment due immediately or in 30 days?

    8. Financing options. If you have a lot of cash on hand, you may be able to be your own bank. By financing clients under a separate corporate identity, you could generate an extra revenue stream.

    9. One-on-one support. Some clients can be needy. If you think a business relationship will require a lot of hand-holding, build some extra cushion into the deal. You may even be able to position one-on-one support as an added value.

    10. Extra perks/benefits. Can you or the other party sweeten the deal? You could offer to set up introductions to other potential partners, create a joint press release, or run a promotion together.

    When to Restart Negotiations

    As you work through each item on the list above, take careful notes. If talks become too convoluted, start over with a clean slate. Go through the checklist again to make sure you're both on the same page.

    Present the Final Contract

    After the meeting, it's time to draw up the final contract. Make sure your agreement captures every item you discussed; a missed detail can ruin your credibility. If you have multiple PDF documents to send, merge PDF prior to sending them over so that you have a clean look, and to prevent it from being altered further without your consent.

    Growing Your Business

    With every contract, you'll become a stronger negotiator, securing more favorable deals for your business.

    Join your local chamber of commerce to meet fellow entrepreneurs and share strategies.


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