You’ve done all of your interviews, fact finding and due diligence and finally have chosen a vendor to work with your California business. Now comes the real challenge: negotiating the contract.
This is a partnership between the two of you, one that should be mutually beneficial to both parties. But just how do you know that the contract is fair to both sides and the start of a mutually beneficial relationship?
You’ll want to head into your contract negotiations with the basics written down. Start with:
- Knowing the terms and conditions you prefer.
- Spelling out the services to be performed or the goods to be provided.
- Figuring out what you believe you should pay. Include the total cost, financing terms and payment schedule.
- Acknowledging the start and termination dates of the contract.
That’s just the start for the negotiations before you begin. As the negotiations proceed, you’ll need to consider these factors:
- What are the most important things for you to accomplish with your negotiations? You’ll want to finalize those before moving on to the lesser priorities.
- As you proceed with the negotiations, continue to review your “must have” list. Is it really something you must have to close a deal or just a “nice to have”? If it’s the latter, you probably can knock it off the list.
- Know when to walk away from the negotiations and decide to choose another company to partner with.
- Know the timeline and benchmarks that must be met.
- Determine the risks and liabilities and which party will be responsible for addressing them.
- Include any required confidentiality or non-compete agreements.
- Keep the vendor in mind as you draft your lists. This can’t be all one-sided.
And after all that, answer this question. Could this contract make or break your company? If it can, it could be dangerous to go it alone. You might want to consult with an attorney ahead of time of have your attorney sit at the negotiation table with you. Your business could depend on it.