You’ve Got a Deal: 5 Negotiating Tips for Small Business Owners

Negotiating is an inescapable part of doing business. No matter who you work with — suppliers, customers, partners, lenders, employees — you need to know how to get what you want without losing the relationship.

Before you begin your next negotiation, familiarize yourself with these 5 strategies.

1. Advance research

Learn as much as you can about the person and organization you’ll be dealing with. What are their strengths and weaknesses? Where do they stand in their industry? How are they affected by their competitors? In what areas are the most likely to compromise?

Now analyze your own assets. Why should they do a deal with you instead of your competitor? The answer isn’t necessarily money. Maybe you provide higher quality, faster turnaround, or better customer service.

Finally, find out what the typical terms are for the type of deal you’ll be making. You don’t want to go into it with ridiculously high — or low — expectations.

2. Decide what you will compromise on

Small business owners often find themselves in the position of needing the deal more than the other party does. This has nothing to do with the quality of your business, only its size. So keep your pride out of it and see what areas you’re prepared to give on.

Make a list of conditions that are least important to you. If necessary during the negotiation, you can concede these items without losing too much of the deal’s value. When the other party sees that you’re willing to compromise, they’ll likely do the same.

3. Collaborate, don’t compete

Never lose sight of the fact that you want the negotiation to result in a business relationship, not an enemy. The ideal deal would be one where both parties benefit equally. Thus, the collaborative forms of negotiation, rather than aggressive ones, are more likely to be successful.

Discuss goals and needs at the beginning of the process. Once both sides feel confident that they understand the other’s position, there can be given and take until a solution is found that adds value to both businesses.

4. Make the first offer

Conventional wisdom says you should do the opposite: wait for the other party to tip their hand, then counter with your own offer. However, studies show that the person who makes the first offer usually gets closer to its target price.

The reason behind this is the psychological principle of “anchoring.” Once that first number is stated, both parties work around it and are instinctively reluctant to move too far from it.

If you don’t manage to speak first, protect yourself against the other person’s anchoring tactic. Even if the terms mentioned are very far from what you had in mind, don’t be afraid to say so. Reset the negotiation with your own offer, and perhaps a joke to the effect of, “You were just testing me, weren’t you?”

5. Make realistic counter offers

No matter how outrageously high/low the first offer, don’t go too far in the opposite direction too fast. And don’t accept the first offer, even if it’s what you wanted. People feel more satisfied with the deal when they feel that they’ve driven a hard bargain. Take small steps toward the final deal.

With these 5 negotiating skills in your pocket, you’ll be able to do more than cut a great deal; you’ll build valuable long-term relationships for your small business.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Sell Smarter, Not Harder: How to Choose CRM Software

If you’re still using one-size-fits-all Customer Relations Management software, your small business is probably suffering for it. Your salespeople are roadblocked; information isn’t coordinated between departments, leading to delays and duplications of effort; and sales opportunities fall through the cracks.

These days, there are many software options tailored to specific industries and sales processes. So many, in fact, that making a choice can be overwhelming. Here’s how to analyze what you need so you can choose the best tools for your business.

How many stages in your sales process?

Map out the prospect’s journey through the sales funnel, with input from your reps and marketing team. If it takes 6 steps, then your software should be capable of tracking the customer through each one.

How do you acquire leads?

Your CRM software should make it easy to track the source of every lead. Having the ability to gauge marketing efforts into a single platform is key.  Track traditional marketing efforts with a business card reader app, that imports contact information digitally.

What activities do you want to automate?

If you send out email campaigns to sales leads, choose a system that does so automatically when the new lead is added, or at defined times and stages.

Data Accessibly

Should members of the sales team be able to access each other’s data? Do you need to keep some data secure, only accessible by designated users?

What kinds of reports should the software generate? How easy will it be to export or extract data from these reports?

How much integration do you need?

A CRM system that ties in with your business management software can save you even more time and effort. Say you’re a landscaping small business. Your sales team sends approved quotes to the scheduling department, scheduling sends the info to the work crew, and the work crew sends it to the accounting department to generate an invoice. So you’d want a system that integrates all those departments, eliminating the need to enter the same information multiple times.

If you operate in multiple locations, a cloud-based system may be a great solution for you. In the landscaper small business example above, work crews could access scheduling and materials updates on their mobile devices while they’re in the field.

This is just one of the many reasons why Xendoo uses cloud-based accounting software for its small business services and solutions. It leverages the power of technology to deliver faster, more accurate, and more responsive service — just as your small business does with your customers.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

The Perfect Fit: Tailoring Your Inventory Management System for Your Business

Many types of small businesses, from restaurants to manufacturers to retail stores, have stocks of supplies or products that must be maintained efficiently in order to optimize cash flow, prevent waste or shortages, and protect profit margins. So how do you know if your inventory management system is truly serving your needs?

Ask yourself these questions. The answers will reveal your system’s strengths as well as areas for improvement.

What type of inventory do you carry?

You probably have one or more of these three main types:

  • Raw materials. These are the supplies that go into making your final product, such as foodstuffs if you’re a restaurant or fabric if you’re a clothing manufacturer.
  • Work in progress. These items are in the making but not yet finished and ready to sell. Your pizza dough is mixed and portioned, but not yet baked, or your garments are cut out but not yet sewn together.
  • Finished products. This stock is ready to sell and ship to customers, either wholesale or retail.

The type(s) of inventory you carry will dictate your storage requirements, tracking practices, and reordering protocols.

How well can you predict future inventory needs?

Do you know how much stock you should have on hand at any given time? If not, you risk having either too little and losing customers, or too much and hindering your cash flow.

To improve the accuracy of your reorders, base them on concrete historical data rather than general experience. Your accounting software should be able to easily generate reports including:

  • Best selling items (which will need more stock than the others)
  • Seasonal fluctuations in sales volume
  • Trends in sales of specific items
  • Revenue and profit on each item
  • Differences between the physical store and online sales

This information is not only essential to inventory management, but it can also help you make the right decisions about your product assortments and keep your business growing strong.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

What Type of Entrepreneur Are You?

Not every entrepreneur is made from the same mold. The reasons you started the business, how you run it, and how you define success could be very different from someone else’s.

Why is knowing what category you fall into important? Because you’ll have a better understanding of what drives you, why your business came to be, and ultimately help answer that age-old question… Who am I?

Here’s an overview of the four types of Entrepreneurs. In future articles, we’ll explore each of them in-depth.

The Freedom Seeker.

The Freedom Seeker prefers to work for themselves. They like to make their own decisions, set their own schedule, and above all, control their own destiny.  They also foster teams that can share in the same freedoms by breaking conventional models of how a business should run.

The Legacy Maker.

The Legacy maker wants to build a business that can be passed down to his or her children — and their children. For this entrepreneur, their business is their way of leaving their mark on history.  It’s one of the ways they’ll be remembered after they’re gone.

The Opportunist.

This Entrepreneur spots a money-making opportunity gets buy-in and gets out at the right time. The Opportunists love and excel at marketing and interacting with people. They are confident, optimistic, outgoing, and sometimes impulsive.  They run with those impulses and many times will reap the financial rewards of such perfect timing.

The Innovator

This Innovator starts a business based on his or her knowledge or innovation. The Expert would rather spend all day doing what they love, not actually operating the business. The expert or innovator prefers not taking risks and doesn’t like to have to prove themselves. Their confidence in their product speaks for itself.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.