7 Steps to Take When A Client Wants to Negotiate Your Standard Business Contract

Last week my blog discussed why business owners should not be afraid to negotiate contracts for services they need. This week, let’s turn the tables and talk about what happens if you are on the receiving end of a request to negotiate your standard business contract. Before you get to the steps below, take a deep breath. It’s not as scary as it sounds. If you follow these seven steps, you will be well on your way to a successful discussion.

1. Don’t take it personally. Do not take offense if a client wants to negotiate your business contract. It could be that your contract does not match exactly what the client wants. It could be that the contract is outdated. It could be…many things. It is easy to take it personally but you need to remember we are just talking about words on a piece of paper. Think positively – it may just take a few tweaks to satisfy everyone. Take a deep breath and schedule the call or meeting to discuss the contract.

2. Think discussion not negotiation. Don’t think of it as a negotiation but instead think of it as a discussion. Just the word “negotiation” makes a lot of people sweat.

Images of smoky back rooms and torture tactics are for the movies and definitely not what we are talking about here.

At least not for me and my clients. Instead, think of a negotiation as a way to get to know your client and their needs better. It does not have to be a hostile situation at all. It is merely a discussion.

3. Ask open-ended questions. In order to find out what the client needs from your contract, you need to get them talking. To do this, ask them open ended questions like, “what works for you in this contract and what does not?” “how can we better get you to your end goal?” “how would you like to revise this contract”. Once you get the client talking, you learn more about how to better serve them and whether you can meet their needs.

4. Listen. Don’t cut them off. Don’t interject. Don’t take offence. Just listen to what they have to say. If you are a note taker, take notes (as long as you can listen and write at the same time). For many, this is the hardest step but it is crucial in order to let the client be heard and truly understand their needs.

5. Paraphrase. When the client is finished speaking, paraphrase back what you have heard. Do this to ensure that you understand what they have said and to show them that you have been listening. When you are done, ask them if you have missed anything and if there is anything further they would like to add. Don’t miss this important step to make them feel heard and appreciated.

6. Speak Up. This is where the tables are turned and it is your turn to speak. If their requests are reasonable and work for you and your business, let them know that. If you are unsure and need to think about it, tell them that. The worst thing you can do is make a rash decision that you will regret (or have to retract) later. Do not feel pressured to make a decision in the moment. You can simply tell them that you need to take some time to consider their request. This is also the time to explain your point of view. Do not get heated or unprofessional. Remember step two- this is a discussion.

7. Next steps. Decide what the next steps will be. If you have agreed to revise the contract, who will make the revisions? If you have requested some time to review their request, set up a date and time to let them know your decision. Put the date in your calendars right away. If you need to set up a call in the interim with a lawyer for legal advice, do that before your next call with the client. Some lawyers, such as myself, focus exclusively on business contracts and can help you with the negotiation of your contracts. If you know that the client’s request does not work for your business, tell them that. Be honest. It is as simple as telling them that you don’t think that request fits with what you can provide. If this is the case, consider whether you can refer them to another business. The client will appreciate the lead and it shows that you still care for them. Admittedly, it is hard to give up potential business. Yet sometimes you are better off turning away the business that you do not want so that you can focus on the business that you do want.

Throughout the process, remember to keep it professional, keep it respectful and be honest.

Do you negotiate your contracts yourself or do you hire a lawyer to help you? Please let me know in the comments!

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