10 best ways to… - top tips from experts on negotiating, closing the sale, raising money, attracting and keeping employees, print ads, cutting costs and getting organized

Entrepreneur, March, 1996 by David R. Evanson, Jerry Fisher, Cynthia E. Griffin, Lisa Kanarek, Danielle Kennedy, Robert McGarvey, Bob Weinstein

Written By: David R. Evanson, Jerry Fisher, Cynthia E. Griffin, Lisa Kanarek, Danielle Kennedy, Robert McGarvey and Bob Weinstein

Who among us couldn't stand a little improvement . . . whether in our waist- lines, our wallets or the way we do business? After all, the urge to better yourself is what motivates most business start-ups, so it stands to reason you should constantly seek to improve your business.

But that doesn't always mean working harder; sometimes it just means working smarter. With this in mind, we asked experts for their top tips on doing everything better, from closing the sale to cutting costs. Learn from their words of wisdom--instead of learning the hard way--and you'll soon find business is better than ever.

Negotiate

Effective negotiating skills could be the key to your business success in the '90s and beyond, believes Roger Dawson, a former real estate broker and author of Roger Dawson's Secrets of Power Negotiating (Career Press). But how do you get what you want? Dawson and author Nicole Schapiro (Negotiating for Your Life, Henry Holt and Co.) offer 10 tips that will put you in the driver's seat.

1. Understand the difference between negotiating, bargaining and arguing. "Bargaining is usually tit for tat," says Schapiro. "Arguing is when you're not listening to each other. Negotiation is about the psychology of relationships; it's mutual education."

2. Know what you want. Both parties must be clear about specifically what they are negotiating for. Is it price? A delivery date? Special treatment from a supplier? A combination of all three?

3. Be prepared. Determine what you want, what you are willing to give up and under what circumstances.

4. Consider what the other side wants. In any negotiation, Schapiro contends, people look for four things: control, safety, respect and inclusion. If you fulfill these needs, you will be able to close any deal.

5. Partner with the other side as soon as possible. State the purpose of the negotiation in "we" terms ("We both want to come to a satisfactory agreement on this") rather than "I" terms. This creates trust and the feeling that you are clearly working toward the same goals, says Schapiro.

6. Get the other side to commit to a position first. If you don't, cautions Dawson, you are at a serious disadvantage. It's common for customers to say, "Give us your best price, and we'll tell you whether we'll take it." In this instance, remain noncommittal by saying, "In most cases, XX price is the best we can do. However, if you make me a proposal, I'll see what I can do for you."

7. Use a vague higher authority. Even as a business owner, Dawson says, you can often negotiate better deals by delegating decisions to someone else. If you're not satisfied with an offer, say something like, "Let me check with my marketing people."

8. Ask for more than you expect to get. After all, you just might get it. This also gives you a negotiating range because you can always come down in price, but you can't go up.

9. Have other options, and be prepared to walk away from the negotiations. If you're negotiating an equipment purchase, for example, Dawson suggests researching two other pieces of equipment you would be just as happy with.

10. Maintain a sense of humor.

Raise Money

"Stop wasting time whining that your bank won't lend you money," says Graeme Howard, an investment banker in Rock Hall, Maryland. "Take a walk through your balance sheet to figure out precisely where there is room for creative financing." Here, Howard offers a few suggestions.

1. Ride that float. You can successfully keep a negative balance in your checkbook, Howard says--and, by doing so, gain access to more money than you really have. The key is staying one step ahead of your bank's payment of the checks you write. "There's simply no reason to keep extra money in a bank," contends Howard.

2. Set up a bonded warehouse. If you need capital for inventory, Howard recommends setting up what is known as a bonded warehouse on your property. "The inventory is maintained on your property but continues to be owned by the vendor, and you are not invoiced for it until it leaves the warehouse," he says.

3. Tap friends for unfinanced receivables. Selling receivables to a third-party factor is old hat for many. Typically, a secured lender will advance 50 percent to 80 percent of your receivables. Then, says Howard, tap friends for an advance on the remaining 20 percent to 50 percent. "You will get a yes fairly often," Howard says, "because you're not simply holding out your hand for a loan, and the risk is fairly low."

4. Go to a venture leasing company. The difference between these companies and traditional equipment lessors, says Howard, is venture leasing companies will "take a risk on a semicreditworthy company in exchange for higher rates and some form of equity participation in your business." If you need office equipment, they're out there looking for deals.

5. Move in with a friend. If you need office or factory space, "move into someone else's," says Howard. "It's foolish to add to your own [facility] when there are so many companies out there with excess capacity."