As an entrepreneur, business owner, or senior manager you will sign many contracts with your buyers, suppliers, partners and other business establishments. The contract might have signed according to the prevailing business climate, which seemed good that time. However, in course of time, business climates change, and so does the best interests of your business!
What will you do? You have two clear options either you continue with the same contract and suffer the consequences, or terminate the contract early and incur penalties. Which one should you choose?
Whichever you choose, business gurus say, it is you who is going to be the loser. If you continue, you agree to make do with a substandard contract that does not work as originally intended and will almost certainly incur unnecessary cost and loss of control. Alternatively if you can terminate, then there will undoubtedly be financial consequences and additional costs.
So, you are a loser, anyway?
Wait - there is another option, the third and probably the best.
Renegotiating your contract, yes, you can always renegotiate your contract, mid-term on near the anniversary. This will benefit both parties, you and your supplier. How is it done?
- Start right away, to save time and money
- Collect data on current supplier marketplace – conduct a structured benchmarking exercise
- Analyze - identify the features and mechanisms in the contract that will benefit all parties
- Plan - develop your strategy, identify your ‘must haves’ and ‘nice to haves’, develop a contingency plan, role play the negotiation, work out your ‘walk away’ point
- Meet - invite your contracted party to negotiate. Hold a meeting, explain, discuss and renegotiate to your plan
- Convince and renegotiate a new contract!
Renegotiating a contract is not an easy job. It needs a clear strategy a workable plan, preparation, conviction and skills to negotiate. You need to have a team of professionals who can handle entire renegotiation process, right from understanding the need for renegotiation to completing it with a new contract. Without an experienced team, it is unlikely that you will end up with a new contract is no better or you are forced to keep to the status quo or terminate.
Do you have the staff, who have the tools, techniques and experience to deliver a successful renegotiation and secure the desired result?
We know it is a tough question. However, eXceeding has the answer. We have a team of experts that has in-depth understanding of the marketplace & supplier landscape, knowledge and experience that is highly skilled in business negotiation!
Leave it to us… We’ll do it and get the outcome you wanted!