A mistake many first time entrepreneurs often make at the negotiating table, is knocking down their competition’s pricing. Regardless of whether you are charging a premium over current market rates or are positioned as a cheaper alternative, the focus of your negotiations should not place heavy emphasis on your competitor’s products/services and pricing model as compared to yours. Pricing is definitely a tricky component for any business regardless of size. When a business picks a model they want to use to set their prices, they should stick with it unless the market provides them feedback on which components need changes.

On the negotiating table, emphasis needs to be placed on:

1. The requirements of the prospect

2. If they are an existing customer, feedback on their products & services is essential.

3. Whether they have any questions regarding any specific components of the proposal.

The majority of your time needs to be spent on sizing up the prospect’s current situation and what barriers you will need to cross to get them to close the deal. Pricing will eventually be discussed. When it is, focus needs to be placed on the value that your product/service is providing the customer rather than defending and comparing prices. When the prospect does compare your pricing to your competition’s, it is important not to bash their products or find holes in them, rather, spend time focusing on your product/service and the value you bring to the table.