Tips for Surviving a FinancialNegotiation

I remember once, one of my mentors told me that I needed to sharpen my negotiation skills. He even recommended a book I should read. By virtue of him being my boss I was upset and hurt because we had just brokered a multi-million deal for the company even after making a few concessions. The thing about life is that, if you miss an opportunity to learn an important lesson, life will throw that curve ball at you until you wise up.

I believe what he was trying to teach me then could have been a big lesson for me in the future. This particular repeat lesson cost me a little over half a million Kenya shillings. Now, that is one helluva an expensive lesson to learn. Let me share a few tips on how to survive a tough negotiation;

a.Always quote with the client in Mind
A lot of us work with industry defined products and services. Bottom line is, clients always know in their minds what product they want, even though it is just semantics to you. It is important to them that you understand what they want and package it to suit their needs.

b.Would you pay for that?
After you complete your quotation it is important to ask yourself one little important question. If you were the client would you really pay that amount for that product and why? This process will help you form a basis for argument during a negotiation and it also helps you get into the mind of the client.

c.Know your worth
A lot of us are willing to do anything for a quick buck without a care for how your brand yourself and your business into the future. If there is a specific market need that you are filling, you need to be able to define the intellectual and physical assets that you add to your customers’ bottom line 5, 10, 30 years into the future. Price your service/product with that in mind and do not back down or sell yourself short.

d.Beware of your big guns
One thing you need to realize about human nature is, your brain is automatically drawn to big figures. This is where your costs inflate and the first point at which you want to make reductions. Ensure that you position your big guns wisely. Where they add value to the client more that to you.

e.Be willing to make concessions
Before you walk into that negotiation, ensure that you have a clear idea of where you are willing to make concessions and arm yourself. One of my very good friends told me, quote for everything, even twice under the different headlines. It allows you room for give and take.

f.Be stubborn and firm
Sometimes pure stubbornness prevails. Just refuse to back down on particular items and leave it at that. Argue your case out, offer solutions that make the client feel like they wont get as much worth out of you for your product/service but for goodness sake don’t back down.

g.Be willing to walk away
It is important to know the point at which a client will not make any business sense for you to have. It is only then that you will be able to walk away from a big deal because it won’t be worth it. It is only at this point that you will have the audacity to fire a client.
If your internal cost of running their business costs more that you are billing; walk away.

Top tips to building Business Relationships

If no one has told you yet, a business is built by creating relationships. Relationships with you suppliers, customers, bank, co-workers etc. One of the most quoted authors Dale Carnegie wrote a book that has been used for decades the world over to help people learn how to build relationships.

Some people are just born that way; they are a “people person”. But if you are anything like me then it is a skill that you consciously must work on to develop. Thankfully anyone can.

One of the very fist places I worked in I encountered a strange culture. This culture glorified cold-hearted corporate vixens that I can only liken to Meryl Streep’s character in Devil Wears Prada. This is the face of the powerful no nonsense corporate woman who has a handle on everything and everyone by instilling respect through fear. However, if you intend to run your own business this high school mentality will not get you results and you will have to close shop eventually.

I want to share a few tips to building and enhancing your business relationships.

1. Develop a genuine interest in people.
When you meet someone, ask them about their background, family, professional life. Learn as much as you possibly can about them. This information will help you know how best to connect with them for instance when making a sales pitch. In my experience in advertising this is where most agencies fail to make the connection. Beyond a brand strategy try to understand what drives the decision makers behind it and make that connection when selling your ideas.

2. Remember a person’s name.
A lot of people do not put effort into remembering names. Since we don’t all have people to remind us like Merry Streep’s character, we have to develop the art of remembering names. Nothing annoys a potential employer, supplier, or customer than receiving a letter or event invitation card with a misspelt name. Most will switch off from hearing you out once you make that mistake. Develop this skill, it will get harder as you meet more people and grow your business

3. Everyone you meet has a sign saying make me feel important on their forehead.
One of my colleagues says this to me all the time. I always complement her because she is always able to make instant connections with people she meets. She told me that her secret is this tip number 3; make the other person feel important. Focus on them and not yourself. Don’t bore them with details of your life. Listen to them and place value on their ideas and opinions.

4. Avoid arguments.
If you think about it, what is the point of an argument? Once you have stated your point and won, all you have achieved is making another person look and feel bad. This will not generate sales leads or build your relationships. Learn to restrain yourself and avoid arguments even when you are sure the other person is wrong. The customer is not always right. However, they hold the key to building or ruining your business. In some PR circles it is said that when you do something a customer appreciates they tell their friends, when you do something negative, they tell the whole world. As the internet and social networks make the world smaller nothing is more threatening than the power of word of mouth.

5. Learn the art of conversation.
According to Dale Carnegie, the secret to being a great conversationalist does not lie in knowing and preparing great stories and anecdotes. It is in being a good listener. Most people when involved in a conversation are always thinking of the next thing to say instead of listening to the other party. Get engrossed in the other person and ask probing questions into the conversation they are carrying on. Get them to talk more about themselves and listen to them.

6. Remember the 6 degrees of separation.
The person or colleague you are rude to today will have power to make decisions tomorrow. Once an MD of a company I worked for wanted an opinion on someone he wanted to hire. He walked around asking the opinion of everyone that had interacted with the potential employee. One of the middle level managers recounted a story to him of how in the past, this Lady had mistreated and frustrated her on her first Job. The Lady was never hired.

These are just the tip of the Ice Berg. Follow the link below to How to win friends an Influence people by Dale Carnegie to get more tips.

Tips on developing your annual company plan

It is important to develop a culture of putting down exactly where your company or business should be headed at the beginning of every year. After analyzing the previous years performance indicators in terms of actual sales, percentage of sales conversions vis a vis sales pitches made, cost of sales, company expenses, and actual profits. This process will help you see whether your business is actually growing and making money.

A very good friend of mine who is also a financial consultant once described a typical company situation to me that I thought was impossible. You can be running a business with a consistent cash flow and debt repayment and yet still be making substantial loses. One of the reasons this could happen can be explained by the product/service pricing strategy. You must always be aware of direct and indirect cost of sales when pricing in order to ensure each sale converts into profit.

So how do you go about developing a company plan?


1.Begin by an economic analysis of the market you are in, global trends, and economic forecasts. If you are In Kenya this information is available on the central bank website in great detail.

2.Analyze the particular industry you operate in, the trends and forecasts for the year and where your business is positioned against your competition. This can be done through a SWOT analysis of your business.

3.Analyze each of the departments or business units in terms of performance and a SWOT analysis.

4.Develop specific SMART goals for each of the business units that you want to achieve in the coming year. Limit these to 5 for each business segment to avoid being unrealistic. The number could vary depending on the size of the business.


5.Determine what assets and manpower are necessary to achieve the objectives for the next year.

6.To develop financial objectives create an excel sheet illustrating sales leads, current client portfolio, and the predicted monthly income. Indicate what percentage of sales you want to raise from new business.


7.The most crucial step. Make sure that you include your key employees in this process in order to get buy-in into the vision from them because they are the ones to help the business achieve the overall financial objectives.

For more information or extra help with this process. Please contact Edwin on 0722 763 360 or visit www.bizresource.co.ke