It was quite a scary process for me to finalise the contract with the development house I engaged to develop my site. They are based outside Australia (where I am based), and so all negotiations and discussions were conducted via email and telephone. You don’t realise how difficult it is to develop rapport with someone unless you can see them and engage with them in a physical environment. My business partner at the time found a useful technique to deal with this constraint was to engineer many different excuses for phone calls. For a period of about three weeks, she arranged calls, and made requests for various documents and reports. What she was actually doing was testing the suppliers punctuality, accessibility, language skills, reliability, and personality. Doing this over a few weeks meant you ironed out any potential irregularities, if they were being unusually attentive this would become apparent after a few weeks.
We were very lucky, and our first choice in supplier was consistently reliable, and constantly exuded trustworthiness. Their language skills were exceptional, and the quality and timeliness of the documents they provided were exceptional.
And then even once you have established rapport, the next challenge is negotiating the price and conditions for the project. I freely admit I am not a brilliant negotiator: I am mercy to that frustrating female trait (in business at least) of being compassionate. Still, I was lucky enough to be very experienced in quoting for development jobs, it being my day job, so I was able to gauge fairly accurately if estimates for certain tasks were reasonable or not. The process turned out to be relatively painless, and I believe, mutually satisfactory. The process involved the following components:
- descoping some parts of my project. Some low-priority elements were estimated to require significant amounts of work (and money!), so I cut out these elements to make the first release affordable and efficient.
- negotiating down on certain tasks that appeared to be particularly over-estimated. In many cases, the supplier explained the reasoning behing the estimate, and I accepted this, and in others, they agreed to cut their estimates down.
- finally, I asked for the rate per developer and designer to be dropped a little to bring the overall cost of design and development down by 10%
One thing I learnt in a Negotiation course I went on a few years ago was that each party in a negotiation has personal reasons for making the deal happen quickly, and the biggest mistake you can make is to only focus on your own reasons for making it happen. I think in this instance, I wanted the project started at a good price, and my supplier – I believe – wanted a major project to keep their developers gainfully employed for large amounts of time. As a result, we were able to agree on a price that was a significant reduction on the original estimate, and that I am sure was still a good price for the supplier.
I also learnt that in the spirit of fostering a trusting and pleasant working environment, it is important to compromise sometimes. So, when I proposed that we shared the costs of transferring the funds internationally, and the supplier politely said that he thought I should cover that cost as he had already dropped his price considerably, I pondered whether I should labour the point and insist. I could have probably won, but in the long run, I wanted eager and satisfied developers, so I relented happily.
Then it was time to negotiate contracts… more on that next post.