Business, government, or neighbors — life is all about give and take. Real negotiation isn’t about rules, but mutual benefit.

Negotiations are supposed to be win-win, and if you’re an entrepreneurial person, should even be fun. They should leave both negotiation partners happier at the end of the negotiation, making things possible that didn’t seem doable at the start of the negotiation.

Good morning, enterprise world.

Those who read my articles regularly know that I have a special love-hate relationship with everything procurement and everything administration.

Love, because a prospect telling you that they will pass on your proposal to procurement and/or legal now means you have just moved down the sales funnel one more time, and a contract could finally materialize.

Hate, because many times have I been embattled in month-long discussions about petty clauses and requests from procurement and legal, without any benefit for me.

Don’t you believe it? Here are some examples.

The Small Fish And The Big Fish

“We really can’t accept any payment conditions other than 60 days arrears, with monthly invoicing of the software license fees. It’s our internal policy.”

Says an international airline that usually charges you in January for your summer vacation air tickets, often with no refund possibilities. To the Founder & CEO of Yonder, a B2B SaaS provider that charges less per year than a single long haul flight’s fuel costs.

OK, I’m the small fish, so I guess I will have to swallow the monthly invoicing, 60 days arrears payment conditions. What can the customer offer me in return? Maybe a reference speech at a major industry event? Uh no, we’d have to check that with corporate communications, and they are usually really restrictive with stuff like that. OK, maybe a longer-term contract? Uh no, corporate risk management prefers not to enter contractual obligations beyond 3 years. Fine, I’ll try again. I’ll give you two months of software licenses for free at the start of the contract term, in return, we’ll do quarterly invoicing with payment conditions 30 days arrears. Yeah, we would like to have the 2 months of free software licenses, with payment conditions of 60 days arrears. Guys, you don’t understand how negotiations work. It’s a give and take, not just a take.

Change of scene. Enter public sector procurement.

“When we negotiated our first contract back in 2019, your software license prices were 10% lower than in 2023. We still want to buy from you at the 2019 prices.”

Well, that won’t work. The world is different in 2023 than it was in 2019. There is inflation. There is a war in Europe. And our product has improved significantly over that time. Those arguments weren’t enough. I had to prepare a formal document, outlining the improvements in our product, and the impact of inflation on our suppliers’ costs. Only for them to come back that they still wanted to buy the original quantity of software licenses at the 2019 prices until the end of 2024 when the original contract would have expired. As the volume of the new contract is significantly higher and they accepted the increased prices for the majority of the license volume, I gave in. I didn’t want to delay the contract signature again for several months because of a petty discussion of a 10% discount on 20% of the contract volume.

We Need To Talk

Seriously, guys. Even if you are the big fish, and I am the small fish, you should start thinking of what you can give if you want to take. If you don’t want to give in a negotiation, don’t call it a negotiation. Call it an enforcement, eat-or-die, or an ordinance. Just send through the signed contract, and I will decide if I counter-sign or walk away.

Are you telling me that I don’t understand and that you have to comply with laws and regulations? I’m not saying that you should do anything against the law or in violation of your regulations. I’m saying you should use your freedom of action extensively and creatively. And yes, it is possible also in an enterprise or public sector world.

Here are some examples.

“Would it help you if we changed the payment conditions to yearly upfront invoicing?”

That was the suggestion of one of our large customers, who also acts as an integrator for third-party customers. It came up when a third-party customer came up with yet another set of funky regulatory requirements, threatening the timeline of a deal for another six months. Our integrator realized that they cannot fulfill the third-party customer’s needs without us, so they could not only take but also need to give. No wonder I like working with those guys, even if we don’t always agree.

Change of scene. I live in the countryside in a village of 3,000 people, where I own a single-family home. On the plot of land next to our house, they plan to build a few new houses. The feeder road will almost touch our plot of land.

The communal construction administration reached out and asked:

“Can we talk about this project to learn what your interests are? We would like to find a way to fulfill your interests in exchange for a no-appeal. The timeline of the project is very tight, and the owners of the planned new houses need planning security.”

Of course, we can talk. We even talked about swapping part of our plot of land with the plot next door, to make life easier for everyone. I also positioned the interests of my neighbor, without having an explicit mandate for it. But being neighbors, we know that giving and taking makes a good neighborhood.

See the difference between the first examples? Both our large customers and our communal construction administration could hide behind laws and regulations. But they didn’t, because they realized that for their interests to go through, they needed to respect my interests, too. That’s what negotiations are about.

Conclusion

In my entrepreneurial life, I have met many big fish (i.e. enterprise customers) who think that just because they are the big fish, they can impose whatever they want in contracts with their suppliers (who are the small fish).

Think twice guys. If there aren’t any small fish anymore, the big fish will die — or they will need to start going on a vegan diet.