Negotiate from strength, even with the big guys
By Holden Lewis • Bankrate.com

Small business owners often feel intimidated and desperate when they negotiate with big corporations. Susan Onaitis wants to change the imbalance of power.

Onaitis wrote a book for small business owners called Negotiate Like the Big Guys and she owns Global Learning Link, a consulting firm that specializes in sales and management training for corporate clients. Her book distills some of her experiences as a small business owner who must negotiate with big companies.

Owners of small businesses suffer, she says, when they:

• Fail to extol the value of their products and services.
• Reveal their desperation for business.
• Shirk homework.
• Yield to intimidation.

Small business owners should remember that they can negotiate from a position of strength, she says, even when dealing with much bigger companies.

"They kind of forget that they do have sources of power and the large corporation wouldn't even be talking to them if they didn't have something that the small business owner had," Onaitis says.

Selling's the key
The best way to wield power is to sell well.

"Do a really good job of selling because if you don't sell first, you are at the weakest you can possibly be when you go into a negotiation," she says. If the big company isn't salivating for your service or product, "you really are not in a strong position to negotiate, whereas if you're capable of pointing out why you're different, you are in the best position to meet their needs."

A savvy small business owner knows that it's time to switch to sales mode when a corporate client or customer tries to short-circuit the deal-making process.

"The way they do that is they ask your price right upfront, before you have time to negotiate," she says. At that point, you become a salesperson, describing why you offer the right goods or services at the right price. If you charge more than competitors, explain why -- persuasively.

Never let 'em see you sweat
You won't be persuasive if you look desperate.

"Never let them get a sense of desperation from you, that you need this business so badly you'll do anything to get it," Onaitis advises. Especially watch your body language and the concessions you offer.

About those concessions: know in advance exactly what your bottom line is, what you're willing to give up, and what you won't concede. In your mind, rehearse walking away from a bad deal. To know what you're willing to give up and what you aren't, you have to do your homework. Onaitis suggests preparing a list of possible concessions: payment terms, delivery time, rules on rush jobs and extensions, and so on.

"Then you have to know the price to you of each of those items and the value of those items to your client," Onaitis says. "Then you take that list of negotiable items and divide it into two lists: one of items that you absolutely must have and don't want to give up, and items that you can trade away that they might really want."

Employees of big companies often are schooled in the art of intimidation, using expensive wardrobes, slickness, legal departments and sheer numbers to take advantage of small businesses. Onaitis's advice: stick to your guns. If you can't agree on prices and terms, "maybe they're not the right client for you," Onaitis says.

Adversarial vs. collaborative
Her 300-page book, published by Silver Lake Publishing of Los Angeles, defines four kinds of negotiators (datacrats, goalies, relaters and expressers) and two broad types of negotiation: adversarial and collaborative. Onaitis comes down squarely on the side of collaborative negotiating, which focuses both sides on finding creative ways to meet everyone's needs. A collaborative approach works quicker and encourages both sides to continue doing business with each other.

But Onaitis doesn't bury her head in the sand; she knows that many companies will insist on adversarial negotiation, in which there is a clear winner and a clear loser. Her chapter on the subject covers the steps of adversarial negotiating and some of the tactics used.

She wrote the book because she figured she would be a natural authority on the subject: in addition to creating her own consulting company, she has worked for a larger consulting firm and for the international furniture division of Westinghouse.

"I've been on both sides of the table," she says. "That's why I teach this stuff."

-- Posted: Jan. 14, 2000