When negotiating a business deal with a smaller up and coming company the larger company may wish to consider their position in the game and what the end goal for the smaller company is. That is to say what is the little company trying to achieve. For instance the little company wants PR value from being able to say they have the larger company as an account or is partnering with them.
Why? Well perhaps they wish to leverage this with a second round of venture capital funding or use it to sell more large accounts and often there are reasons of ego also involved. Being the larger company you can often all them to use public relations and tell others that they are doing business with you as that costs you nothing at all and gives them an influx of cash and this is a feather in your cap and can allow you to negotiate a lower price or better terms or additional services.
It pays to know who you are negotiating with and their motivation and especially those motivations which you can provide without costing you anything on your bottom line. Now that is truly a Western World win/win scenario and it makes sense to proceed this way. Just make sure you are certain of the little company's ability to perform and do what they say they are going to do. Be weary of over promising from cash poor start-ups with high burn rates. Consider all of this in your negotiations in 2006.
Lance Winslow
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