Best Small Business Tips: Contract Negotiation

by Dawn Fotopulos on June 5, 2011

Best small business tips will help you reduce risk and save money. Here’s a way to negotiate a contract with a professional resource to make sure your subcontractor’s interests are aligned with yours.

We needed help with the text on our homepage and the enrollment page for our training videos. It was a big yawn and we wanted it to be more compelling. A writer who was recommended to us wanted a big heap of money to rewrite the copy. Was he worth it?

The first question is, if you spend the money, will you get a return on that investment? When I was in real estate, I’d spend one dollar if it would improve the value of the building by three dollars. That was my criteria for investment. It’s the same with a website. If someone wants you to pay them, that person has to prove his or her worth. Here’s how we conserved cash and got a great resource to give us his best effort too.

Always ask, “whom have you done this for and what was the result one month, three months, six months after you completed the assignment.” If you don’t get a concrete answer back, don’t bite no matter how good the story sounds.

Next, ask what benchmarks the potential hire will use to prove what he or she did mattered? How will you both define success?

Last, negotiate part of the contract as a variable, not a fixed cost. Most writers want the money no matter what happens. What if you said, “I’ll pay you a portion of what you want and if the site hits certain benchmarks as a result of your efforts, I’ll pay you a larger final fee.”

That’s what we do. If our conversions are higher because of the enrollment page copy, the writer deserves to be compensated. After all, we can afford to pay top dollar now. We’ll pay expenses as our revenues climb.

One of the best small business tips I can give you is to manage your expenses and revenues at the same time. Correlate expenses to revenues. Tie expenses to variable costs, not sunk costs and your bottom line will be healthier.

Don’t have a clue about what I just said? You need to watch our training videos.  They could change your business almost overnight! There are a ton of best small business tips waiting for you in the best training video library online.

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