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Small Business Savvy: Why You Need Negotiation Skills

Work on your negotiation skills and you will see your business grow from strength to strength.

Amy Galbraith

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Starting and running a successful small business requires skills and knowledge that many business owners may not possess. For example, the owner of a food truck may be an amazing chef but they may not have ample knowledge of accounting, employee management or inventory control. They may also not have the ability to successfully negotiate with landlords, partners or suppliers.

The ability to reach an agreement on an issue without having to compromise too much comes with practice, and can be learnt by taking negotiation skills courses and interacting with more established members of your industry. The reasons why these skills are vital to small business owners are outlined below.

These skills are beneficial for everyone involved

While negotiating in a boardroom is a useful skill to have, small business owners need skills that translate to their situation. Negotiation skills are needed when meeting with suppliers, in order to receive a better price for bulk goods, and can be useful when hiring a new employee and discussing what their responsibilities will be.

Related: Manie Spoelstra On Why Negotiation Is The Genesis Of Entrepreneurship

Being able to negotiate professionally is also beneficial when dealing with customers. You will be able to reach an agreement that suits you both, without fumbling and settling for less. Your customers will respect you as a vendor, especially if you are able to stay calm and collected throughout the transaction.

You can create win-win situations

Negotiating is not simply creating a positive outcome for one party but reaching an agreement that both parties benefit from.

The best small business owners are those who are able to negotiate an outcome that has a win-win result, in which every party involved believes the deal is a good one.

Being able to reach agreements that are positive for both you and the other party is a highly valuable skill. Not only will everyone involved have positive results but you will become a more respected businessperson. Your suppliers will enjoy dealing with you, your clients will respect you and partners will be more likely to use your viewpoints in their decisions.

Good negotiation will improve your bottom line

The ultimate goal of a negotiation is to reach an agreement that is favourable to you and your business. By being able to negotiate a good deal, you are automatically improving your bottom line. But, this takes a keen mind and a knack for negotiation, which some business owners do not have. By taking courses, you’ll be able to improve your ability and thus improve your end results.

If you are able to reduce your overhead by 10% due to an effective negotiation, that money can go directly to your profit margin. Negotiation skills are imperative for a thriving small business, because as the business owner, you are in charge of dealing with suppliers, partners and clients and will need the ability to create outcomes that favour your bottom line and end goals.

Related: How to Win a Business Negotiation

Your business confidence will be boosted

Walking into a negotiation feeling unsure of yourself and your ability to negotiate can lead to an agreement which favours the other party, not yourself. However, by improving your skills and being able to argue and negotiate professionally will boost your business confidence tenfold.

Having confidence when walking into a negotiation means that you will be able to concentrate on the issue at hand, not worrying about whether the other party is out-manoeuvring you. The ability to confidently make a presentation and provide offers and counter-offers has been shown to garner better results. Confidence in business helps to win many boardroom battles.

You will build respect

Having effective negotiation skills will build respect in the eyes of your competitors, suppliers and staff. Having the respect of your employees is vital for a successful small business, as your team is most likely small and close-knit. If they respect their employer, they will most likely work harder and be more productive.

Being respected in your industry is another benefit of having sound negotiation skills.

The impression you leave after a negotiation can have a lasting effect on how you are viewed in your industry, so it is best to be able to have a positive impact. Being able to negotiate professionally and without incident will more likely result in respect from vendors, partners and clients.

Final thoughts

The simple fact of the matter is that it is better to be seen as intimidating rather than a pushover at the negotiation table. Your ability to confidently present your case will have a positive effect on your reputation in your industry, and will ultimately work toward achieving your bottom line and end goal. Work on your negotiation skills and you will see your business grow from strength to strength.

Amy Galbraith is a junior writer at Rogerwilco. She has had a passion for professional writing since graduating from the University of KwaZulu-Natal with a Masters degree in English Literature. She now writes compelling copy for an exciting variety of clients, and enjoys writing on topics including education, finance and millennial issues.

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Many SMEs Start With Great Plans But Fail To Take The Big Leap

Most small-to-medium sized enterprises (SMEs) are aware of the benefits of good governance practice but, faced with limited time and resources, which could be costly in supporting growth ambitions.

ACCA

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  • 27% of SMEs don’t have a vision that covers more than the next 12 months
  • 45% of SMEs either don’t have a strategy, or one which covers only the next 12 months or less. 

The latest global research, inclusive of Africa in supporting small business growth from ACCA, outlines the governance needs of SMEs. It highlights simple but effective practice over vision, strategy and human capital can provide them with greater flexibility, adaptability and resilience as they grow. This a huge factor in the long-term sustainability of the business, if put in practise.

“If you incorporate good practice for running your business from an early stage, your company is more likely to be resilient and is more likely to appeal to external investment,” explains Jo Iwasaki, head of corporate governance at ACCA. It is about leadership directing the company and being aware of factors both within and beyond their enterprise and build resilient organisations in the face pf the changing world.

Related: Growing Globally – Supporting SMEs On The International Stage

The research also found that half (49%) of SMEs do not involve anyone external in their strategy discussions, despite the benefits experienced by those that do, which include additional experience and knowledge of the industry/sector (according to 46%), an independent perspective / constructive criticism (44%) and advice on their growth strategy (39%).

“There are a lot of daily concerns for the leaders of a small business, and often the biggest challenge is meeting day-to-day operations and cash management needs while thinking about the long-term future of the company. And while many leaders are keenly aware of the importance of resilience in the rapidly changing business environment and of buy-in from stakeholders, for example funders and employees, there often may not be the time to think or do much about it,” added Iwasaki.

“I hope that this research helps SMEs in focusing on some of the most crucial issues, and can be a resource not just to SMEs themselves but also to policymakers,” concluded Iwasaki.

How vision and strategy helps small business succeed is available at ACCA Global.

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Small Business

Small Business Owner? All The Documents You Need To Get A Car

Read on below for some tips on all the documents you need to get a car as a small business owner.

Amy Galbraith

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As a small business owner, transport is an important aspect of your financial success. You need to be able to drive to and from meetings so that you arrive on time, as well as have the ability to transport your products to customers and to your store.

You will need to purchase a car for your small business to make life easier and more efficient. Once you have used a car repayments calculator in South Africa, you will need to gather all the necessary documents together in order to make a purchase. Not sure what those documents are? Read on below for some tips on all the documents you need to get a car as a small business owner.

A business plan

A business plan is necessary for the financial institution as it will show them how your business is doing financially and whether or not you will be able to repay them on time and in full. Your business plan should be detailed and provide a financial breakdown of your business at its current point in time.

Having a business plan will also show the financial institution that you are serious about your commitment to repaying your car loan. Being transparent with them will work in your favour and allow them to see the progression of your business with the use of your new vehicle. You will need to carefully outline how you will repay the car and what you will do if you are unable to make the repayments.

Related: Keep It Simple: How To Write A One Page Business Plan

Ownership

One of the most important documents you will need to provide the lender with is proof that you are the owner or part-owner of the business. You will need to turn in the correct documents that correlate to your business, such as a partnership agreement, limited liability company documents or a business licence.

In some cases, you can simply provide your lender with your personal information and the information of your business. You will need to provide the tax identification number of your business too. The ownership documents are important, as they differentiate the purchase from being a personal one to being one for a business.

Be sure to have these documents ready, and make copies in case you should misplace anything.

Personal information

You will need to provide the lender will all the necessary personal information. This includes a copy of your identity document, the most recent three month’s worth of bank statements for your business as proof of your ability to repay the debt, as well as proof of business and residential address.

If you are the sole proprietor, the financial institution or lender will need these documents because you and your business are seen as one in the same. This means that they need to look at the income from your business and both your business and personal expenses when calculating your affordability. You can use a car repayments calculator in South Africa to do the legwork and figure out your affordability before the financial institution does but their results might differ.

Driver’s licence of the regular driver

If you are going to be driving the car regularly, then you will need to provide the financial institution or lender with a copy of your driver’s licence. However, if you will be allowing your staff to use the company car, then you will need to provide both a copy of your licence and theirs, in order to add them to the insurance as a regular driver.

Providing a copy of the driver’s licence of everyone who will be driving the company car will allow your insurance company to add them as regular drivers. It is also important for your financial institution to know how and how often the car will be used, as this will influence their approval decision. Be sure that whoever you list as a regular driver is trustworthy and will drive responsibly in order to limit the amount of wear and tear on your business vehicle.

Related: How South African Small Business Owners Can Overcome Economic Uncertainty

Proof of insurance

Once you have settled on the perfect car for your needs, before the car can be delivered you will need to provide the lender with proof of insurance. This is necessary as the financial institution or lender needs to be assured that the car will be insured against anything that might happen to it while en route to your business.

You should look for car insurance that offers affordable premiums and that is tailored to company cars rather than cars for personal use. The proof of insurance should have the details of all regular drivers listed, so that your lender has a comprehensive list of everyone who will be using the car, and should clearly state what is and is not covered. Be sure to make a few copies of this document for the drivers to keep for themselves in case they have any queries or need to make a claim at some point.

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Small Business

How To Choose An Outsourcing Partner For Your Small Business

Before you jump the gun and choose the first outsourcing company that piques your interest, you need to consider the following factors.

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Business process outsourcing (BPO) has proven to be a practical decision for many business owners when it comes servicing your customers’ needs. Gone are the days where you’re needed to juggle customer communication while trying to solve several pressing issues at the same time. Now, you can simply put those concerns in the hands of professionals who can help you achieve greater success.

Many small business owners are forced to wear several hats at the same time. And focusing on your business’ direct needs, such as growing your bottom line, as well as having to manoeuvre your way through the online space to keep your customers happy, is not always possible. Not to mention, there isn’t always enough time in the day to focus on, and excel in, all of these important elements.

Based on the above, it’s clear that outsourcing your needs is a feasible solution for long-term success, however, the question is not always “why” but rather “who” to outsource to. With so many incredible outsourcing partners out there, it’s important that you find a company which can service the needs of your customers and add value to your unique business offerings.

Before you jump the gun and choose the first outsourcing company that piques your interest, you need to consider the following factors.

Analyse the resource quality

When you choose to outsource your services to a company, you need to look at their skills to determine whether or not they will be able to help you achieve the success you want and need. Make sure that you do your research to see the type of clients they work with or the projects they’ve worked on to ensure they’re able to handle the volume of questions, queries and customer needs your business has.

Related: 5 Time-Consuming Tasks Small-Business Owners Should Outsource

Choose according to the infrastructure you need

As a small business, most of the frustration of not being able to meet your customers’ needs is due to the lack of necessary infrastructure needed to perform particular tasks. For instance, artificial intelligence (AI), chatbot technology and more. Your chosen provider will also need to have the correct equipment and software to safeguard your information if the server is down or one of their machines become faulty. Customer service in today’s day and age is a constant service.

Your provider needs to be able to set up solutions to ensure that your customers will be assisted 24-hours a day.

Communication needs to meet your business needs

The company you choose to work with should have a clear understanding of your business needs, and they will need to be available for communication when you need it. Small businesses are testing the waters, and therefore should be able to change their approach in real-time if something isn’t working. If your partner is on-par with what you need for your business, together you will be able to succeed.

Flexibility in service offerings

As mentioned, your chosen partner needs to be flexible in their services in order to keep up with your customers’ ever-changing needs. Should your approach need to change, your outsourcing company should be able to guide you and provide insight that can help you achieve your goals. Reliability also goes hand-in-hand with flexibility, as your partner needs to work effectively to help your business thrive online.

Related: 4 Benefits Of Business Process Outsourcing For Small Businesses

Outsourcing cost versus delivery

Small business owners need to be careful not to over capitalise on their expenses, therefore it is advised that you shop around to find the most affordable, competitive price for your needs. Do your research on the market to see what other companies are offering in terms of costing and services. During this process, you need to ensure that you are not choosing the cheapest place and compromising on quality.

Weigh up your options and remember that this is a service that you are unable to provide due to time and skills.

Final thoughts

With the right partner, the benefits of outsourcing are endless. They will have a positive impact on your reputation and your bottom line, which is why you cannot take this decision lightly. You will also need to choose according to the size of your business and your needs. For example, if your needs are to communicate with your customers across various online channels in a personalised manner, you will need to look for a company that is small enough to attend to the detail you expect. If you simply want to automate your customer needs, you will be able to consult with large companies with years of experience and the latest technology. The smaller your company choice, however, the smaller your financial risk.

In the beginning stages, it’s best to start with something small and work your way up according to your business growth and needs.  The above-mentioned factors are crucial when wanting to boost profits and return on investment (ROI). Choose wisely and, together, you will take your business to new heights.

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