Small businesses often step into negotiations with large companies already assuming they’re at a disadvantage. They feel smaller, less powerful, and more dependent on the opportunity than the other party. But what if that assumption is completely backward?
Let’s consider a seemingly simple scenario: the hotdog vendor outside Home Depot. Most people would assume that Home Depot is doing the vendor a favor by letting him set up shop on their property—for a fee, of course. But let’s take a deeper look at the dynamics of this exchange.
When I was an invisible fencing dealer, I used to manage day laborers. I’d often take my crew to Home Depot for incedental materials. While there, I’d usually buy them lunch from the hotdog vendor out front. This wasn’t just about convenience—it was strategic. It allowed me to take care of two tasks in one stop: feed the crew (so they would not take a long lunch) and pick up supplies. That’s time efficiency, which translates to real savings and productivity in a labor-intensive business.
Now, here’s the kicker: I didn’t necessarily need to shop at Home Depot. I could have gone to Ace Hardware, a local supplier, or any number of other options. But the presence of that hotdog vendor made the experience smoother for me and kept my team happy. That hotdog vendor helped tip the scales in Home Depot’s favor, and as a result, they made perhaps a hundred dollars off my purchase during each visit.
So, who really benefited more from that setup? Sure, the hotdog vendor made some money, but Home Depot made substantially more—and they did so repeatedly. Yet, because the vendor likely undervalued their contribution to the customer experience, they paid rent to Home Depot, assuming they were the “junior partner” in the deal.
This story illustrates a broader point that small businesses must embrace: providing value—even if it’s not immediately obvious—puts you in a stronger negotiation position than you might think. When your presence enhances someone else’s business, you’re not just along for the ride—you’re helping drive the vehicle.
Basic economics supports this idea. The more value you bring to an exchange, the more you deserve in return. But too often, small businesses give up this value without demanding proper compensation. Why? Usually, it’s a combination of imposter syndrome, lack of awareness, and a cultural narrative that says “small” means “less.”
To shift this mindset, small business owners need to:
Analyze the full scope of value they provide—not just direct transactions but also indirect influence on customer behavior and brand perception.
Learn to articulate that value clearly during negotiations.
Be willing to walk away if a deal undervalues your contribution.
Don’t sell yourself short just because you’re the smaller entity. David didn’t beat Goliath by playing Goliath’s game—he won by understanding his own advantages.
