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Negotiation - to arrange for or bring about through conference, discussion, and compromise. 

At least that is how Webster defines the term. I prefer to describe the term as “the art of two people protecting their own interests while awkwardly attempting to not step on the other party’s toes.”

Negotiation can be fun, but it usually isn’t - especially, when it is with friends.  As a startup company, most of our contacts come through friends and relatives.  This can cause some discomfort when trying to agree on services and prices.  Our company prides itself on providing value-add to every customer.  And we always will.  Our goal is to treat every customer fairly and produce a solution that will leave them satisfied.  But when it comes to dealing with friends we find ourselves being extra sensitive during the negotiation process.  It is as if all of the rules of negotiation go out the window and you are left begging for the process to end and wishing either you didn’t know this person because either a ) you could play hard ball with them or b) you could just walk away.

The first rule of negotiation is “never accept the first offer.”  This can be as much for the other party’s pride as it can be for you getting the best deal. Think about it, if you come to me and say you will give you $10,000 for that car, and I immediately accept, aren’t you going to be left thinking, “I could have got the car for less, why didn’t I start lower?”  So, instead I should always come back with something higher than $10,000, even if it is only by a small amount.  This lets you know that you are in my ballpark and not starting off too high.

The second rule of negotiation is “don’t get the shaft.”  Basically, this means don’t be the guy who walks away thinking, “Oh, crap, what did I just agree to!”  Make sure you are fair with yourself as well as your counterpart.

The next rule of negotiation is the golden rule – “always be prepared to walk away and say no.” There is always an alternative offer out there and you never need something so bad as to violate rule #2

A few other rules to try to follow
- Try to avoid making the first offer.
- Be comfortable with silence.
- Never disclose your bottom line.
- Learn all you can about the other party.
- Don’t negotiate with yourself.

These rules are simply guidelines and everyone should follow a framework that makes them comfortable.  It is a difficult thing to come to a mutually beneficial agreement.  The real problem is that neither side wants to feel like it lost.  Let’s face it; one side always loses, at least by a little. Hopefully, both sides at least feel like they are better off than they were before they closed the deal.  That should be the goal of any negotiation.

Oh, and as I said before, when negotiating with friends, none of this applies. Just be prepared for a painfully awkward moment or two.

I must have missed the class where they taught you how to hire an employee, or collect sales tax, or register to be an official LLC, or look professional when invoicing a customer, or “fill in the blank”.  There are just so many things that are necessary to know (or figure out in my case) when starting a business that aren’t covered in any courses offered at most universities. 

It is no wonder so few people pursue entrepreneurship.  The paperwork alone is tough to manage without hiring a lawyer, an accountant, and a business consultant to help you out.  Unfortunately, most people don’t have the budget to afford such luxuries.  They are left to do exactly what I am doing, struggle through the processes themselves (I would like to note that I do have several friends and family members who have been tremendous help along the way).  I consider myself to be a smart person, and some of this stuff is kicking my butt.  There are just so many things to do and so many steps involved in each thing that it is easy to become overwhelmed.  It is quite a deterrent really.

Throughout the past few months I have learned so much about running a business.  It has really made me start to think about how valuable an entrepreneurship program could be.  I’m talking about a program that focuses on all the important and unimportant things that are necessary to know when running a business.  A program that prepares you to do everything from developing a business concept all the way to collecting checks from the customer.  This program would teach you how to apply for a tax id number and then hire an employee.  It would teach you how to connect with clients, write a proposal, develop a statement of work, and then invoice the client.  Heck, the program would require you to start your own business, assisting you with all the irritating bureaucratic annoyances that you have to deal with you along the way.

I know some universities offer an entrepreneurship program, but most universities don’t. UK is one that doesn’t.  UK offers plenty of business courses, but none of them are focused on entrepreneurs.  UK also offers an MBA program, but it mostly focuses on theory and management.  It doesn’t teach you applicable concepts and skills that are necessary to start and then run a business.   Maybe after I am a successful entrepreneur for a while, I will start an entrepreneurship program at UK.  Now that would be fun, teaching motivated students how to grow their awesome ideas into something of value.

Today, I received my first signed SOW. We have completed several projects, but this is the first official SOW that we got signed. Business has really picked up over the last couple of months. Still not enough to support myself and my team full time, but we are getting there. We go to a conference this week where we will promote our business to several school districts in the state of Kentucky. We will be competing for clients against companies like Microsoft, Dell and Pomeroy (my Father’s company). I know we will learn a lot, but I also think we can turn some heads. Our team is very talented and we offer below average rates. I am excited.

We are also giving a presentation on Web 2.0. Ha, like are the experts on the subject. Oh well, we can act like it anyways.