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Tips for Negotiating Lower Monthly Bills for Business Owners

Posted by : Premraj | Posted on : Thursday, September 20, 2018

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With such a high rate of businesses failing due to cash flow problems, 82% according to a U.S. Bank study as reported by Entrepreneur.com, lowering monthly bills as much as possible can be an important part of keeping the organization afloat for any business owner. After all, you definitely don’t want to reach the point of having to ask, “What is my home worth?” taking a second mortgage out, or even putting it on the market to prevent having to close your business. Remember, there is nothing that’s truly non-negotiable, why pay the full price if you don’t have to?

Do Some Research on Actual Cost

To negotiate just about anything you need to know what the actual cost is, meaning, what does the person on the other side of the table have to pay in order to produce that product? Once you know, you’ll understand how much wiggle room there is.

Compare Multiple Suppliers

You’ll get the most competitive prices by comparing at least a few suppliers – and letting the sellers know that you’re doing so. Get quotes from these companies and tell each one that you plan on going with the supplier that offers the most competitive bid. At the same time, remember to compare actual value, taking quality into consideration as well.

If It Makes Sense, Offer the Supplier All of Your Business

If a supplier can provide you with various products and/or services, offer to give them all your business to get the lowest prices. They’re just like you, they want to increase sales by selling as many products as they can and appreciate those who will help them to do. Even large corporations typically offer discounts for customers who sign up for bundling various services, such as cell phone and cable television – it’s the same for many of the monthly bills business owners pay.

Never Take the First Offer

In any business negotiation, accepting the first offer is a bad idea – in fact, that’s one of the most basic rules of negotiating, which is why most sellers expect that. Always issue a counter offer or ask for a better price. If they know you’re looking for a long-term relationship, more than likely they’ll come back with a lower cost.

Pay More Upfront

You can create more leverage with most suppliers by paying more upfront, typically over 50 percent of the total, which means the supplier gets immediate cash in their pocket and won’t have to worry about going after you to pay as much of the bill, providing incentive to lower the cost. The more you can pay upfront, the better negotiating power you’ll have.

Other Benefits

If there really is no room for the supplier to reduce the cost, see if you can benefit in other areas, creating gains for both parties. Perhaps by offering to buy in bulk they can offer something else, such as a better warranty, additional products or features, or a smaller down payment.

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