When Times Get Tough, Negotiate

Facility managers across the country are cutting back on everything from purchasing to employees, but even a department’s fixed costs might not be as fixed as you think. In our current economic situation, businesses and contractors are much more willing to negotiate costs and services to maintain a strong and committed working relationship. When faced with budget cuts, these service negotiations can provide a little wiggle room for managers.

Whether it’s your product supplier or a contracted service, managers should analyze every contract to identify where a cost reduction is a possibility. In addition to the cost, examine the terms of the agreement and any value-added services that are offered. Addressing these areas can go a long way to keep costs down, but be prepared that the negotiation process is not an easy one. Here are a few tips:

• Come prepared. Make sure you know what you want out of the new agreement and go into discussions with an understanding of the other businesses needs.
• Set a goal and reach for it. In other words, you wont get anything you don’t ask for. Worse they can do is say “no,” but then at least you have a starting point for negotiations.
• Be ready to compromise. In most cases, you wont get everything you ask for, but you will likely come out in better shape than you were going in.
• Stay focused. You will likely hear the problems of the other business and why your request won’t work. Stay focused on your needs during the negotiation.

Finally, if managers are successful in renegotiating contracts, make sure to get the new deal in writing.

  • Great Article... It's very easy to get discouraged when your contracts decrease or your competitors continually go down on their prices... Compromise is the key to negotiation!  You are so right!

  • Great Article.  I look at this economic time as an opportunity to trip your cost, and look for other business that we in great times would not look at.  Keeping our current customer base is important even if we have to cut back in some cases.