Welcome back to all of you who've taken a Christmas and/or New Year break, and I wish you a very happy and successful 2007!
Have you made any New Year's resolutions? I suspect that, in addition to getting fitter (this is the year that gym membership will REALLY earn it's keep!) many of you will have made New Year's resolutions that relate to being financially better off, and making your business more profitable.
To help you achieve the last two, I'd like to share with you a negotiating tactic used to great effect by my five year old daughter.
Yesterday we had a New Year's Party, and invited friends and relatives to join us for a celebration. It was also an opportunity to get some help eating all of the chocolate that we and the children had been given for Christmas! Young Evie kept making forays into the pile of chocolates in the centre of the table, each time our backs were turned. After my husband had told her "No more!!", she disappeared for five minutes and then returned.
"Please can I have three more chocolate shells?"
"Three!! No way!"
"Alright, can I just have two then?"
"No."
"But I've been very good..."
"OK, just one last shell..."
I don't suppose she ever expected to get more than one more chocolate, but if she'd have asked for one in the first place, my husband would certainly have sent her off empty handed!
In the world of business, asking for three times what you hope to get is not likely to boost your credibility (a concern not shared by the average chocoholic five year old!). But on the next proposal you put together, work out your price and then add an extra 10%. That 10% may well go unchallenged, in which case that's an extra chunk of pure profit you've added to the bottom line. And if you do end up negotiating - well, with a better starting point, your finishing point should be similarly improved.
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1 comment:
Your point RE adding 10% to a quote is quite interesting.
I think it's also true to say that some companies will 'value' what you have to offer more so than others, so it's wise not to tie yourself down to a rigid pricing structure. This is something I'm just beginning to get to grips with myself as a bit of a n00b to the world of running a business.
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