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What To Do When You Are The Small Guy in Negotiations?

December 21, 2017 // R. Shawn McBride // No Comments »

R. Shawn McBride recently spoke about how to handle negotiations when you are the small guy.

Hey folks, Shawn here with you. Talking about what to do when you’re the small guy in negotiations. You know, I’ve spent years working on business planning. I worked as a lawyer in large law firms and then started my own law firm. I’ve certainly been in a lot of different places, both for my business originally working for a large law firm having a lot of leverage, and then eventually working for a smaller law firm and a small business strategy firm. And then I’ve also worked with many clients that have been on both sides of the picture. Sometimes they were big, sometimes they were small. And I’ve learned a lot of lessons about how to negotiate as the small person.

If you’re the smaller company in negotiation, usually the larger company is going to try to make you play by their rules. And they know this. The biggest players know what the game is. They understand what they’re doing, so they do actually expect some push-back from the small guy. They’re going to produce very aggressive terms that are very favorable for the larger guy, and you’re going to have to say no and take care of yourself as the smaller guy. So I really want you thinking through those roles and those sizes and how it can play into the negotiation.

If you’re the big guy, you know you’re going to ask for everything you can get. If you’re the smaller guy, you’re not going to feel as comfortable because maybe that contract size is huge for your business. So you want to understand the roles to start with. Once you understand the roles, you want to think about your uniqueness. Why is this big player negotiating with you? And it can be because you have a unique something, something you’re doing that nobody else can do. You do it in a unique way. Now you have leverage. That’s a leverage position. However, if they’re coming to you because they’re trying to drive costs down and you’re largely a commodity, you are not in a good position and you need to understand that. Now you need to make a decision. Do I jump into this deal or not? If you’re jumping into the deal in a commodity type play, you either better have some way to do things a lot cheaper than everybody else in the world, which is a hard thing to do, or you need to understand what’s happening to you. And this is not going to be a great long-term strategy.

As always, when you’re in these negotiations, you want to understand what your alternatives are. You want to understand what your walk away is and there’s a video about this out there. A person who doesn’t walk away loses the negotiation. So you need to be willing to walk away if you have to. You need to understand leverage. You need another big player or another several smaller contracts you’re negotiating so you don’t get too emotionally invested in this one.

Keep looking for those opportunities. Keep planting those seeds and developing your business so you don’t feel like you have to agree. You really want to manage your mindset here. You need to understand the negotiations. You need to understand that you’re smaller. Understand why they’re coming to you. You need to be willing to walk away. From there, you can then start setting your terms and conditions. What do you really need? What do you want to do? And what are they asking for?

Be very careful of the formulaic contracts that big players will often give you. They’ll want you to do things their way. Maybe these aren’t good for your business. Maybe they add additional costs that are unreasonable, in which case you need to work backward and renegotiate. So don’t feel pushed. A lot of times when you’re in these situations, you got to understand what’s unique about you and leverage off of that. A lot of pieces go into negotiating with a big player. Understand what the roles are. Get things together and then start building your negotiation strategy forward.

Are you working with negotiations? Are you doing these things frequently? You know, I have a workshop on negotiations. I would be glad to come in, talk to your organization, either do a keynote as part of some annual training or other events for your employees or do some ongoing training or maybe even do some one-on-one coaching on negotiation. Something I’m glad to do. It’s enjoyable. We’ll enjoy talking to you about what your needs are and whether there might be a fit there.

You know, I want to thank you for doing the work of thinking about this. Just stopping and thinking about your negotiations, how you’re going forward, what you’re doing, it’s going to make a huge difference in your business. And here you are making it. You’re stepping yourself up to the next level. You’re doing something great. Congratulations for that. I really appreciate you and what you’re doing, and I’m here for you.

So, check out McBride for Business YouTube channel. Subscribe. Give us thumbs up or thumbs down on the videos. Let us know how we’re doing. Also, I’d love to see you over at the R. Shawn McBride Fans and Audiences page. We have a great community over there. Become part of it. We’re posting videos. We’re talking. We’re interacting. Become part of that. We’d love to have you over there.

Get your business valuation checklist at mcbrideforbusiness.com, and let me know what I can do for you. Love to have a conversation about your business, how I can help, and get in and work with you and your teams. I’m R. Shawn McBride. I’m signing off. I’ll be talking to you again very soon.

Make sure you download our free checklist to assess your business. 

This posting is intended to be a tool to familiarize readers with some of the issues discussed herein.  This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique.  Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. Freeimages.com/photographer Gregory Kazarian. 

About the Author

R. Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. His signature keynote, The 3 Laws of Empowerment, gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can email R. Shawn McBride or (214) 418-0258.

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Posted In: Business, Management, Negotiations



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