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What is your BATNA?

When you are negotiating, you always want to be thinking about your Best Alternative to a Negotiated Agreement (BATNA). This applies in any negotiation, whether business, personal or even with yourself. When you have a better BATNA, you have more negotiating leverage and are more likely to get what you want out of it.

This is why when I was a contractor, I always had more than one client. Even if I was working with a good client who paid well, on time and was fun to work, I had more freedom if I had another client. Things might go south at the first client and I wouldn’t be out on the street. It’s also why I would always start looking for a contract 6-8 weeks before my current contract was finishing.

It’s why you should always get competing job offers. If you have a job offer and your best alternative is to keep job hunting, that’s not appealing. If, instead, you are choosing between two job offers, you are in a much better position. (No duh!)

It is also why it’s always easier to get a job if you have a job. The BATNA of declining a job offer when you have employment is, well, you remain your current position. Your current job may not be all that awesome (which is why you are looking) but for most folks being employed is a better alternative than being unemployed.

How can you use the concept of BATNA to improve your life?

First, be aware of the concept. Start to look at decisions in your life and think about the BATNA. Even small decisions, like ‘should I get coffee or nothing’? Or ‘what happens if I ask my wife to take out the garbage’? Or ‘should I ask for a raise’? In all of these cases, you can expect some kind of negotiation, and you can think about what the alternative is if that negotiation fails.

Second, take actions to improve your alternatives. If you are unemployed and want more leverage in the job hunt, start consulting. If your wife won’t take out the trash, can you improve your BATNA by making it easier to take out the trash yourself (maybe move the trash can into the garage)? Or building some kind of trash chute?

The concept of a BATNA is key to getting the most out of any negotiation. If you have good alternatives, you have more leverage to leave the negotiation, and if you don’t, you will need the negotiation to complete successfully.

More about BATNAs and salary negotiation here.

Letting Go

doll-1187920_640When pursuing a possible contracting opportunity, you need to be persistent, but you also need to know when to let go.

A while ago I was pursuing a possible contract (the startup is still ongoing but I was extending runway) and had been emailing with the decision maker a fair bit.  We wanted to do a meeting to get things going. I’d be taking care of some of the “behind the scenes” tasks that would allow their development to accelerate.  There seemed to be enthusiasm on both sides, but the meeting kept getting rescheduled.  Eventually, emails I sent about the meeting were not returned.

Now, everyone gets busy, and I understand that.  But if someone has a hard time returning emails when they are excited about the new work you are going to help them with, how are they going to be when you are asking them about an unpaid invoice, or for crucial guidance on a technical decision?  Perhaps they’d be responsive, but I wouldn’t bet on it.

So, I sent a note along these lines:

It seems like you aren’t really in a place to meet with me and discuss this work. No worries–I imagine you have many tasks pulling you in different directions.

While I’d love to work with you, I’ve learned clients who don’t have bandwidth are not good working arrangements for me nor for the clients–while I am self directed, there are times when I’ll need some level of feedback, if only to make sure I’m spending my time and your money correctly.

Please feel free to reach out to me if/when you have time and want to re-focus on this work.

Salient points to note:

  • no blame–we’re all busy and the ability to juggle work priorities is one reason why folks use contractors.
  • closure of this conversation frees me up to pursue other opportunities and them to focus on what they are working on (or perhaps to find another contractor, if that’s a better fit).
  • but, leave the door open, so that if there’s an opportunity to work together in the future, no bridges are burned.

It can be hard to let go of a prospective client after you’ve put significant time into learning their problems, but it’s better to let go than to engage with a client who is not committed or is committed but doesn’t have the bandwidth to help you help them.

PS yes, that is Elsa of Frozen fame.

Cash Flow

Contracting, like any other business, is all about cash flow. You want to make sure you have more money coming in the door than leaving the door.

A friend of mine once told me that the best advice he had received about running a one person business was that there were three components to the work:

  • getting work
  • doing the work
  • getting paid for the work

and if you didn’t enjoy all three and treat them equally, you’d be in a world of hurt.

I find this be be very true. Don’t consider contracting if you are only interested in the doing of the work (whether that be development, design, data manipulation, etc). You don’t have to be perfect at the other pieces (getting the work and getting paid for the work), but you ignore them at your peril.

Good ways to get the work:

  • Market yourself. I like blogging, but contributing to open source and speaking at user groups and conferences seem to work well too.
  • Always be networking and helping others.
  • Look for work before your contract ends.
  • Have a cash reserve so you don’t have to take the first gig that comes along.

Good ways to get paid for the work:

  • Sign a contract
  • Stop work if you aren’t getting paid
  • Be persistent–I have chased invoices for five months before getting paid (this included sending the responsible party a holiday gift)
  • Use an accounting system (I like FreshBooks but use something! I started with a spreadsheet).

If you’d like to learn more about contracting, I am speaking at the June Boulder Ruby Meetup. You can RSVP here.