Small Business Solutions: Effective Negotiations with Large Corporations

How small businesses can get what they want from the big guys.

By Marty Finkle, CPT On May 28, 2014

If you’re a David – a smaller company negotiating with a corporate Goliath – don’t let fear dictate your decisions, because you could get swallowed up and be forced to do something that could hurt your firm in the long run. To help create a level playing field, practice strategic negotiation skills that will lead to more favorable outcomes.

Understand the company’s perspective: Especially with large corporations, you need to understand the key issues from the other side’s perspective and map out your own. If you can figure out your issues, intents, musts, wish-list items, concessions and questions to be answered, you gain power in the negotiation and can guide the discussion. The questions to ask: What are your intended results? What are your priorities for this agreement? On what terms can you be flexible?

Pay close attention to their answers, and, at various points during the negotiation, summarize their point of view out loud to ensure there are no misunderstandings.

Make the first proposal: Don’t wait for this big company to come up with a proposal and be forced to consider their terms – and possibly lose power for the rest of the negotiation process. For example, if you find out that this corporation wants to pay you for services 90 days after billing instead of the customary 30, don’t react with an argument. Instead, propose these two options:

For payment within 90 days:

• We’ll add a 5 percent upcharge to our fee.
• If you pay after 90 days, finance charges (equivalent to prevailing credit card rates) will be retroactive to the first day.

For payment within 30 days:

• Payment will be due 30 days after receipt of the invoice instead of immediately upon receipt.
• All upcharges and finance charges will be waived.

Other keys to negotiating with Goliath: 

• Give those on the other side what they want – on your terms – and shape your proposal based on any uncovered needs.
• Always set a price for the prospect’s demands. Put conditions before offers with this type of statement: “If you agree to sign a three-year contract, then we’ll reduce prices 5 percent.”
• Consider trial closing with a question such as, “Are you saying that if I agree to free service and delivery for the first three months, you’ll sign a two-year contract?” This will encourage those at the large corporation to reveal any hidden issues and, hopefully, allow you to bring the negotiation to a conclusion.

About the Author: Marty Finkle, CPT, CEO of the Parsippany-based Scotwork North America, is an industry expert who leads a team of negotiators who serve more than 100 companies in various industries. He can be reached at [email protected].

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