NEGOTIATION AND TRUST BUILDING

If you are about to negotiate a transaction with a stranger and are concerned about protecting yourself from possible disappointment, here are some tips for you to consider.

1. Prepare yourself before making any deal. If you’re considering negotiating with someone who you don’t know, and haven’t dealt with, there is no basis for trust. Trust is not a reflex. It needs to be earned.
2. To earn trust, check out the other party. Ask for a list of business contacts and approach them for recommendations. If he refuses or seems reluctant, you should question his reputation for honesty and performance.
3. Assuming that you’re satisfied with the recommendations you receive and are sure they’re legitimate, go ahead and negotiate your deal.
4. When you work out your terms, make sure to establish ‘fall backs’ that protect against misperformance or non performance.
5. Fallbacks might include an agreement to compensate for any provable losses that result from performance issues complete with payment timelines. If performance is achieved ahead of schedule, consider paying a bonus. If you pay early, ask for a discount.
6. Just as importantly, make sure to write out your agreement. All too often parties rush into contracts and make them orally. The real ‘fun’ begins when the parties start to fight about the terms of unwritten agreements.