6 Tips for Negotiating in a Crisis
Grow Your Business, Not Your Inbox
After shuttering storefronts and scaring away consumers, the crisis has left many entrepreneurs faced with a series of pressing negotiations: with a landlord, consumer credit agency or a mortgage holder. How can you negotiate your way through this crisis so your business comes out strong?
1. Realize that your options are greater than you think
Many landlords, mortgage holders, credit agencies and others learned from the 2008 recession that refusing to negotiate with entrepreneurs led to empty homes and storefronts, or years in court. It’s in their interest, and yours, to negotiate — especially since coronavirus closures mean that court dockets will be backed up for years to come.
2. Define the problem you want to solve
Instead of panicking, ask yourself the right questions: Do you want to sign up any clients at any cost or hone in on a smaller, more long-term customer base who you know can afford your products? Are you working to pivot your business and lower rent while you get back on your feet? Get your consumer debt payments down to a certain monthly payment? Once you know the problem you’re trying to solve, you can approach the rest of your negotiation from a place of clarity and confidence.
3. Then consider your needs and theirs
Needs are what drive every negotiation. Write down yours first: both your tangible needs (30 percent rent reduction for three months or a monthly payment of X) as well as your intangible needs (financial security, peace, the emotional relief of getting it over with).
Think about their needs, too: For example, landlords need to show their own lenders strong occupancy numbers throughout the life of a loan and consistent cash flow, and these two things could prompt landlords and lenders to ease up on tenants for a short period of time as the market adjusts. Credit lenders, too, might need to show consistent payments coming in.
4. Compare notes with others
Many entrepreneurs have turned online to network with others in the same position. One small business owner, Deborah Engel of the coworking space Work and Play in Maplewood, NJ, started a Facebook group where thousands of people from across the country people trade tips: how to negotiate for credit relief, rent reductions, lease extensions and more. For example, you might find that people negotiating with landlords have come up with innovative solutions like a stair-step increase over time or balloon payment on the end. And you’ll find out what other business owners have needed to show in order to get those accommodations.
5. Ask open-ended questions
When the moment comes to negotiate face-to-face (of course, most likely via Zoom), make sure you ask open questions. People who ask open questions get more from negotiations than those who don’t. Don’t ask questions that only require a yes or no answer, like “Can you give me a rent abatement?” Instead, ask questions that start with “What” or “How,” like:
“What can we do to make sure you still have cash flowing in the door and help me stay in business so we can partner for the long term?”
“What would you need me to show to feel comfortable with a payment plan?”
“What else have you worked out with other tenants?”
6. Use the “I/we ask”
When you do make your requests, frame it as an “I/we ask.” In other words: “Here’s what I am requesting, and here’s how we both benefit from it.” When you have taken the time to ask the other person what they need and show them how what you’re proposing will satisfy it, you’re on your way to a much better outcome that will help you steer your small business to success.
Try these tips for your next negotiation, and chances are you’ll find that even the most hard-nosed person can be surprisingly accommodating. Better yet, you’ll find that a problem that seemed hopeless actually has multiple solutions. The overwhelming challenges of the crisis make it easy to give up and give in. But now more than ever, it’s up to us to protect ourselves and our businesses. One of the most effective ways you can do so is to ask, and ask for more.