Once, I called Discover, the credit card company, to cancel a personal card because the interest rate was really high as compared to my Visa. So, I explained this to the rep and asked him to cancel it. Immediately, he decreased my interest rate. I never knew that was an option. I was just calling to cancel the card. Obviously, I got on the phone with my other credit card companies immediately to try the same thing again. Threaten to cancel the card and compare them to their competition, get a rate decrease - WOW, who knew? Now this doesn’t work for everyone because credit scores and debt ratio are a factor; however, this example is the basis for negotiation. And negotiation, is huge in business - even for a small business.
Many people are under the erroneous impression that a business has to be huge to negotiate contracts. While it is admittedly true that big business has an advantage, it does not mean that small businesses have to pay top dollar for everything. Even a small, doctor’s office has negotiating power so long as you pick your battles and arm yourself with legitimate cause.
Here are some basic tips that can save a fortune in the long run:
1. Call your business credit card and ask them to decrease your interest rate. If you have good credit and an acceptable debt ratio, threaten to go to another company.
2. Shop around for office/medical supplies. Then call all of the same supply companies back again and tell them their competition had better prices. Watch how fast they offer to decrease or match the price.
Many people are under the erroneous impression that a business has to be huge to negotiate contracts. While it is admittedly true that big business has an advantage, it does not mean that small businesses have to pay top dollar for everything. Even a small, doctor’s office has negotiating power so long as you pick your battles and arm yourself with legitimate cause.
Rule: Negotiate your vendor contracts to get better rates
Here are some basic tips that can save a fortune in the long run:
1. Call your business credit card and ask them to decrease your interest rate. If you have good credit and an acceptable debt ratio, threaten to go to another company.
2. Shop around for office/medical supplies. Then call all of the same supply companies back again and tell them their competition had better prices. Watch how fast they offer to decrease or match the price.
3. Call the phone company - ask if they have any good promotions going on. You will often be surprised by the answer. Do the same with your internet service provider. Ask about package deals for phone and internet. Then call the competition armed with the information.
In a similar vein, you should make sure you are getting what you pay for! Here’s another story for you. I worked with a doctor that bought a refurbished ultrasound machine for $40,000. The shipping / delivery was 3 days late. Since it did not arrive on time, the trainer could not come for another week to show the doctor how to use it. I called the company to complain about how we were losing revenue everyday because of this delay. Now, I expected a a refund on the shipping charges and a trainer to be sent sooner... maybe an apology. Instead I got... a trainer in the office the very next day, a full refund on shipping charges, 3 months supply of thermal paper (which was a painfully expensive necessity for the machine), and a 6 month extension on the warranty (worth about a $1,000). I was floored! The company wanted to satisfy their customer - and they did. In the end, my little complaint on behalf of a small doctor’s office saved the practice a lot of money!
There is a strong misconception that small business cannot negotiate things. While it is hard to negotiate with insurance companies for a better payment schedule, unless you are in an under served area, offer uncommon services, or belong to a larger organization, you will find that most suppliers are quick to offer up the discounts - even to a small business.
In short, open your mouth - ask for a better deal. You often get what you ask for!
