UK small businesses back away from negotiations

A third of small business owners and managers do not see themselves as naturally strong negotiators, according to a survey of 1,000 small businesses by T-Mobile.

In determining the factors holding them back from negotiating, the survey identified lack of time, a belief that negotiating won’t make any difference and other business priorities as key reasons. One in ten (10%) of those surveyed only try to negotiate when they are having cash flow problems.

Over a third of small business leaders expect suppliers to quote an unreasonably high first price and 71% of small business leaders believe suppliers often offer better deals to large enterprises. However, many are not negotiating with their suppliers to try and secure the best deals. Indeed, 63% of those surveyed have walked away from a supplier who has quoted an unreasonable first price and over a quarter save less than £500 a year through negotiating with suppliers. The findings also show that some business leaders are still struggling to keep control of costs, with less than one in ten believing suppliers are always transparent over costs and a fifth finding their bills from suppliers are often higher than anticipated.

Alexander Ehmann, Head of Enterprise Policy, Institute of Directors, explains: “UK commercial growth remains fragile and small businesses continue to face serious pressures. In order to survive and grow their companies, business leaders need to keep control of their costs, which often involves negotiating with suppliers. If this is not an option, then it is up to suppliers to offer the best deals possible to support small businesses, which form the backbone of the UK economy.”

When it comes to how business leaders feel about negotiating on an emotional level, it was found that one in three (32%) feel uncomfortable or stressed and two in ten see sense of humour as the key personality trait for clinching a good deal.

T-Mobile’s Head of Business Marketing, Max Taylor, commented: “It is understandable that business leaders find negotiations a drain on their time. However, it must be frustrating for them to miss out on the best deals available. If we can sidestep the negotiations process, it relieves managers of this additional pressure. This is why it is important for suppliers to offer good value, upfront deals to the UK’s small businesses. At T-Mobile, we offer a mix of straightforward business plans that do not restrict people from doing business in the way that best suits them.”