Negotiating a contract is a great opportunity to ensure that you’re doing business with somebody who’s reliable. It can also be stressful, though, if you’ve just recently started your business and you don’t have a lot of experience with contract negotiations. Still, it’s a skill you need to master in order to protect your business and explicate your rights. Negotiating contracts will get easier the more that you do it, but you can ensure you meet your business goals with the following six tips.
Clearly Identify Your Objectives
1. Understand your business needs. The first step to identifying your objectives is understanding the underlying needs of your business. If you’re approaching contract negotiations, you’re seeking to address a specific need — what is it? Are you contracting with a builder because you need a new store location? Are you seeking market research from a brand consultant? Answer this question before you proceed.
2. Find somebody who meets your needs. Once you’ve identified the need that you seek to address, you must find a party that can meet this need — specifically. A contractor who specializes in serving businesses, for example, will likely yield better results than one who’s never completed the type of project your needs call for.
3. Specify your expectations. Once you’ve found a party that meets the aforementioned criteria, it’s time to specify your expectations. In addition to doing so verbally, you need to explicate your terms in the text of the contract. This should include expectations regarding the timeline of project completion as well as the conditions of acceptable termination.
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Understand Your Contractual Obligations
4. Accept your responsibilities. As you’re negotiating your contract, you should keep in mind that your responsibilities are just as important as the other party’s. For example, they may need specific resources — like keys to your building or access to online systems — in order to fulfill their obligations effectively.
5. Ensure your contractor is paid promptly. One of your most important responsibilities is ensuring that your contractors are paid on time. According to one survey, 43% of invoices in B2B transactions are overdue. When you’re determining terms of payment, you can use a cloud bookkeeping system with invoicing that allows for online payments. Look for a platform that features alerts when an invoice is sent, seen, or paid. This can help you maintain accurate bookkeeping and stay on top of payments.
6. Make a good faith effort to resolve disputes. Another essential aspect of an effective contract is a clause for dispute resolution. Even if you negotiate carefully and address each party’s obligations, it’s possible that a disagreement may arise — and if so, you need an agreed-upon protocol for resolving it. Take time to flesh out a process that is amenable to both you and your contractor.
Create a Contract That Serves Your Business Needs
When you’re looking for a contractor, you need to look for qualities such as reliability, trustworthiness, and integrity. It’s important to note, though, that you must bring these same qualities to the table, too. You will only be able to achieve your business goals when you approach contract negotiations with this understanding. Be sure that you meet your contractor’s needs by investing in an invoicing platform that makes it fast and straightforward to pay online.
For more ways to achieve your business goals, check out The Business Goals.