Negotiations

Knowledge: The key to any negotiation is to know your strengths and weaknesses and try to anticipate what the other party requires.

Formality: In your relationship with both suppliers and customers it is very important that the trading terms are in writing since this will minimise subsequent disputes. Good paperwork is perquisite - orders received and given should be in writing. Proof of receipt /delivery is essential. Without this documentation you will be negotiating from a position of weakness.

Competitors: Try and build a relationship with your competitors. Market intelligence is very important both in setting selling prices and negotiating with suppliers.

Relationships: When starting a new venture it is best if the relationships between the parties are not left to chance. Simple rules relating to hours and location of work, job descriptions and responsibilities, holidays, expenses etc. should be put into writing. Always have at least two cheque signatories. If trading is to be carried out through a limited company consider exit routes for shareholders who may want to leave, share valuations, sales to other shareholders and family members. If these issues are not pre-determined it will create a bonanza for your professional advisers.

Third party help: Shareholder and partnership disputes can arise in any business. Once started they will inevitably damage the success of the business to the detriment of all parties. This is human nature. The best solution is to bring matters to a head as quickly as possible by using an independent third party. If left to fester there will eventually be no value in the business for anyone. Warring factions create disruption and not profits.