Inside Entrepreneurship: Temper flaws with help from mentors

Q: I'm thinking about starting my own business in the same area as my current job. The only skill that I don't believe I'm good at is negotiating contracts, since my boss typically handles this area. I also have been known to be a little quick-tempered. Should these weaknesses hold me back?

-- Shannon M., Seattle

A: Going out on your own should never mean going it alone. This is an important message for all startup and small-business owners.

What does this have to do with early-stage negotiations? Plenty!

Startup entrepreneurs are understandably eager to cut deals and sign up customers. They have to move fast because they only have so much money on hand.

So, when a potential customer pauses to test product viability (again!) or suggest yet another contract change, "need it now" entrepreneurs can easily lose their cool. And when these stressed-out entrepreneurs express their frustration in curt e-mails and telephone messages, progress slows down even more. How exasperating!

Fortunately, it seems you already understand the risks of expressing impatience. But this shouldn't hold you back from starting your company. You can learn to take command of your emotions, preferably with help from others.

Readers of this column know that I encourage entrepreneurs and established small-business owners to communicate frequently with a wide range of advisers and mentors.

These business friends can counsel you through tense negotiations and offer a fresh perspective on problems. I believe it is never a sign of weakness to ask for help, but a sign of entrepreneurial wisdom and maturity.

Here are a few more suggestions to enhance your confidence and expertise:

Learn on the job. While you are still employed in your current job, ask your boss how he or she manages negotiations. Ask about success stories and lost opportunities.

Be observant. If the standard sales cycle (the average time to gain a new customer) in your industry is nine months, then you can expect it will take your startup business longer.

It's easier to be patient if your expectations are realistic.

Reduce the pressure of any single sale. Entrepreneurs with high growth goals often set a single mega-deal to attract venture capital attention. But during a company's early, prefunded days, it is less risky to pursue a healthy mix of smaller customers. If your business is too dependent on the big deal, you will always negotiate at a disadvantage.

Gather information. Don't assume you know what your target partner wants. Ask before making proposals. Also, make a list of likely objections to your proposals. Ask your advisers to add to this list, too. The goal here is to limit emotionally wrenching surprises.

Focus on the customer. Entrepreneurs who pay attention to the needs of the customer, rather than their pressing need to get a deal done, will succeed in negotiations.

Whenever deal progress slows, tighten your talking points and remind yourself that your business is not about serving you; it's about serving your customer.

For more in-depth information on negotiation tactics, check out "Her Place at the Table: A Woman's Guide to Negotiating Five Key Challenges to Leadership Success" by Deborah Kolb, Judith Williams and Carol Frohlinger.

Again, there are no successful solo entrepreneurs. Even if you are the only employee of your company, its success will be based on how well you improve your negotiating abilities.

You can do this with good information, alternative perspectives and support from business friends who care about you. You can do it.

Susan Schreter writes about startup planning and small-business financing for the Seattle P-I. She has an investment banking and buyout background and serves as a coach to entrepreneurs and consultant to corporations. Find more Inside Entrepreneurship columns at seattlepi.com/venture. Send questions about small-business management or raising money for your business to susan@insideentrepreneurship.com or by mail to Inside Entrepreneurship, c/o Seattle Post-Intelligencer Business Section, 101 Elliott Ave. W., Seattle, WA 98119.

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