Save Your Business Money

Your hungry to save money, your vendors are hungry to keep you as a customer and now more than ever you could use the extra capital. What should you do to exploit this situation in a positive way? Negotiate better prices, quantity, quality or terms with your already existing business contacts. What most business owners will say at this point is that they don't have the time, and don't believe they can get more favorable terms from their vendors. The following is a simple, diplomatic and impossibly simple way to barter with your vendors without actually haggling for better prices or terms.

Do a small amount of research on your chosen vendors competitors, don't bother getting too much information, the goal here is not to leave your current source of materials, just to get a bigger piece of the farm. Send this simple email, letter, or fax to your vendor. Mail is likely the most powerful medium, followed by fax, and frankly emails often come across as weak requests.

(vendor name),

Here at (your company) we have been satisfied with your (product and/or services) we do however have to operate as a lean and efficient business, and have been tossing the idea around to perhaps use (competitor) in lieu of yourself. Please let us know what discounts or improvements in our already existing terms you can offer. We don't want to switch vendors, but we do have to watch our bottom line.

Thanks,

Do not try any harder than that. One of the most brilliant tactics in this type of negotiation is saying less. Most people believe that if they build a long eloquent plea for better rates and terms, this will raise their chances in getting a favorable response. This is untrue for one simple reason, people who have more power say less. If you are in the right and you have the power, being chatty and apologetic about your wishes translates as timid. If I spent ten pages explaining to you why this method will often bring you better offers from your long time vendors you would actually have less belief in this method's validity. Be succinct, be diplomatic and be clear, you're contacting them out of selfish desire to keep more money in your pocket.

Why is this a good use of your time? It is easier to talk for a dollar than work for one. I once wrote a simple letter to a landlord requesting discounted rent as of my lease renewal. I sent the letter two months in advance, and between the time spent writing the letter, printing it, sending it, talking on the phone with the landlord and having him amend my lease, I likely invested one hour of my time into saving this money. One hour of effort to save $900 a year is a worthwhile task to almost anyone. If your time is however too valuable...pay an assistant to do it.