There's A Place For Negotiation
"Should I sign it?" my client asked.
I gave the sublease agreement a quick glance. My client was looking to rent space from a tenant in a business office. The individual, as the sublandlord, had created a sublease agreement. Despite expressing concerns to me about details of the agreement, the document hadn't been marked up — meaning my client saw the sublease as either all-yes or all-no.
"Did you talk about your concerns?" I asked.
"No, not really."
There were many issues with the short sublease agreement. The two most important to my client being the short amount of time given in the event the sublandlord wanted to break the lease, and the amount for rent.
My client didn't believe she could disagree with the person who would be renting her the space. However, she was looking at the situation incorrectly. It was not a disagreement; she was entering into a negotiation.
As a business owner you may not realize the power of negotiation. It can be used to deal with a difficult client, but mostly with vendors who provide you with supplies. There is a misconception that a printed contract cannot be changed. However, negotiating can help reach your original goal.
There are different negotiating methods. A competitive approach is based on self-interest, and the outcome is often at the expense of the other party. This can be likened to bullying, and usually happens when one party is in a powerful position. In direct opposition with a competitive approach is accommodating, which is agreeing with the other person's opinion and/or idea.
There are two negotiating models that are taught as a form of conflict resolution. Compromising is placing both parties in a win/lose situation, like competitive, but the goal is an outcome of a draw. Since this is more competitive, usually one side receives more than the other as each party asserts their own needs over the other party. Puffery and deception is often used to improve a party's position.
The method which is recommended is called collaborative. It is based upon the book, Getting to Yes by Roger Fisher and William Ury. The collaborative approach is win/win: this is non-adversarial, problem-solving. The two parties disclose their interests and needs to reach their common goals. The first aspect is that this negotiating style is based on building a relationship and establishing a channel of communication. In order to develop trust, try the following:
- Keep your word
- Be willing to make concessions
- Understand and acknowledge the other person’s needs
- Make good eye contact
- Go above and beyond expectations
- Give credit where credit is due
In using the collaborative method to achieve an agreement, there are some concepts that you will need to discuss with the other negotiating party.
- Interests by both parties. Interests are the desires and concerns of each party. They are beyond what is being stated, and really the true reasons for the negotiation.
- Options to both parties. This may require some brainstorming to discover other choices available.
- What does each party have the authority to do? Negotiation needs to happen between the two parties who can enter into an agreement.
- Devise an alternate course of action if parties do not reach an agreement.
- Commitment and implementation of the agreement.
At first, the collaborative method can be awkward, but if you plan to have a long-term business relationship then it is mutually satisfying. If you plan to have a short-term relationship then the compromising approach may be a better direction. There may also be the scenario where you wish to use a collaborative method, but the other party is uncooperative. Additional tips which can be of assistance are:
- Learn to be comfortable with disagreement. This will allow you to think clearly.
- Be likable. Avoid going on the defensive. You can still assert your needs and be yourself.
In the case of my client, the sublandlord would be someone with whom she would have a long-term relationship; additionally, there was the potential for them to refer clients to her. Using the collaborative negotiation method was her best choice. In order to do this she had to see that the interest for both sides was security. The sublandlord wanted to know that having a tenant would be beneficial, not disruptive. My client was concerned with a different type of security — her livelihood.
The negotiating session between the two parties lasted about an hour. There was much brainstorming regarding time periods, costs and maintenance. In the end, the original agreement was amended and both were satisfied with the results.
Negotiation skills are an asset to your business. They can help you reach your goals in a beneficial way.
Cynthia Pasciuto, a licensed attorney and insurance broker in Massachusetts, is the owner of True North Business Consulting, LLC. She has created The TrueNorth Guidebook for Wellness Practitioners to get their business started in the right direction with information on legal, insurance, marketing and project management. She can be reached at 781-729-0481 or cpasciuto@truenorthbusinessconsulting.com.
