Negotiation Strategy

Negotiation Strategy Part 2

Posted Leave a commentPosted in Cannabis Businesses, CBD, Hemp, Negotiation

Negotiation strategy is a learned skill. This is Part 2 of a 10 part series on the Art of Negotiating Contracts within the Cannabis, Hemp, and CBD Marketplace, published every Friday.

Negotiation strategy is developed prior to your first meeting.

Know your numbers and your bottom line. Prepare a spreadsheet to determine your lowest price point. If necessary are you comfortable with accepting the lowest price point?

Analyze the long term benefits of entering into a contract at your lowest price point.

Does the contract contain an option to renegotiate at a later date?

Is there growth potential?

Does the other company offer an opportunity for marketing exposure and market positioning for your products or services? If you are negotiating with a major chain to carry your product, consider the brand exposure this offers. How does that affect your current marketing budget?

Is your company capable of handling an increase in production or service demands?

Negotiation strategy involves more than price points. There are other aspects of the contract you can leverage, such as shipping costs and fulfillment schedules.

What concessions are you willing to make? What are the real costs of the concessions?

The first contract you receive is just that – the First.

Enter into the negotiation with your ideal contract. Be prepared with alternatives.

One strategy recommended by some negotiation trainers is to present all your alternatives in the beginning. I do not endorse this. By giving them options you have given away your power and leverage. You have eliminated negotiation and made it a Yes or No situation.

It is important to listen.

Over the course of your business life there will be situations where you are writing and presenting the contracts and situations where you will be presented contracts written by other companies.

Listen to the concerns and comments regarding the contracts. Ask questions to insure that you have clarity. Initiate your negotiation strategy.

Price point too high? Your counter offer: We would consider paying shipping to your distribution center which would offset your price by………..

Their counter offer: Price decrease, no shipping charges. Can you afford to do both – what is your bottom line?

Why is your product or service of value? 

This is the point where you justify your asking price. You will need to know how your product or service compares to your competitors. Better quality is not a complete answer.

If your products or services appear equal to your competitors, emphasize your business reputation, superior customer service, guaranteed ship dates, etc. Your brand recognition and marketing strategy can also make you more desirable than your competitor.

At this point negotiation strategy sounds relatively simple. Negotiating is basically common sense, preparation, and communication.

What can make negotiations challenging are the personalities involved, their negotiating techniques and how you adjust and adapt your approach in order to achieve a Win-Win contract.

We will cover each negotiation style and technique in upcoming segments.

Addison Morris has been a serial entrepreneur since 1968. Addison believes that in the politically charged, competitive cannabis, hemp, and cbd marketplace, business principles and best practices are a crucial element for success. She speaks and teaches marketing, and negotiation skills. Her goal is to move women from empowerment into power through business education, resources and connections. Addison is the founder of the Women’s Cannabis Chamber of Commerce.

Negotiating

Negotiating Contracts Part 1

Posted Leave a commentPosted in CBD News, Hemp

Negotiating is a learned skill. This is Part 1 of a 10 part series on the Art of Negotiating Contracts within the Cannabis, Hemp, and CBD Marketplace, published every Friday.

Businesses within the cannabis, hemp and cbd marketplace have to negotiate a variety of contracts from purchasing, processing, packaging, leases, and getting products in front of consumers. Other contract negotiations may include buying or selling a business and contracts with investors. The importance of each contract can be intimidating.

You are negotiating for your business’ success and future.

You are negotiating for the people who work for or will work for you.

You are negotiating for the friends and family who supported you in your business journey.

As the person representing your company, you share equal power with the person you are in negotiations with. You are the CEO and decision maker in your business. What you bring to the table are quality products or services, impeccable customer service, business reputation and professionalism.

Successful negotiations begin before you sit down to negotiate a contract.

Success begins with your attitude, level of confidence, preparation and negotiating skills.

Negotiating is not a battle or confrontation. It is not about one side winning at the loss of the other side.

Negotiation is a Win-Win in which each party achieves its goals within the confines of a value-creating  process.

People never plan to fail, but they often fail to plan.

Prior to the actual sit down, research the company you are negotiating with. The internet makes it easy to obtain to general information;

  • When was the company started?
  • Who are the stakeholders?
  • Who makes the decisions?
  • What are the business goals?
  • Has there been a high turnover rate in management?
  • Is the company seeking investors or for sale?
  • Are they growing and expanding?
  • Does the company have a positive reputation?

The second element of preparation defines what you are negotiating for.

  • Be clear about objectives.
  • Determine your needs.
  • Assess the needs of the other party.
  • List and rank the issues important to you
  • What concessions are you willing to make?
  • What is your minimum acceptable outcome, anticipated outcome and ideal outcome?
  • Determine your Best Alternative To a Negotiated Agreement (BATNA)

The goal is a good deal, not a bad deal.

Addison Morris has been a serial entrepreneur since 1968. Addison believes that in the politically charged, competitive cannabis, hemp, and cbd marketplace, business principles and best practices are a crucial element for success. She speaks and teaches marketing, and negotiation skills. Her goal is to move women from empowerment into power through business education, resources and connections.