When you are in the process of selling your business, one of the toughest periods is the negotiation table.

Why?

You might be selling a business, but when it comes time for the hard negotiations to begin, it is really just you and the buyer across the table. The miscommunication that is rampant at this crucial step in the business transaction process kills good deals all the time.

How do you avoid the pitfall of the negotiation table disaster? Try to think like the person across the table.

Your business is your baby. You have spent what seems like countless hours and all of your blood, sweat, and tears to get it to where it is today. Your business is literally a part of you, and no numerical value can ever really quantify what it means to you. To a buyer, your business is a set of financial records and a price tag.

Your staff is like a second family to you. They may not all be perfect employees, but you have kept them around for reasons that only being a part of the business’s history can explain. To a buyer, they are a list of names and titles, and they will either conform to the new owner’s paradigm or be let go.

The price you agreed to for the listing of your business is, at least in your head, the bottom dollar you are willing to take. Any offer that comes in below asking will be truly and deeply offensive to you. To a buyer, the listing price is a starting point for negotiations, and they are going to try and pay as little as possible for your business so they have capital left over to work with.

The way you run your business is how you like things done. You are the boss, so it has always been your way or the highway. Anyone who comes in asking questions about why you do things the way you do is clearly trying to insult your intelligence. To a buyer, it is as simple as needing to understand the reasoning behind the way your business is run, nothing more.

What is the same in all of these examples? The overt emotion on the part of the seller and the lack of emotion on the part of the buyer. Selling your business is an emotional process, but if you want your transaction to be successful, it is critically important that you leave your emotions at the door. This is, after all, a business transaction, one that can be easily derailed when emotions are allowed to have the upper hand.

The easiest way to avoid an emotional negotiation is to hire a professional to do it for you. Using a professional business broker will help to provide a much needed buffer at the closing table, one that will be able to keep things moving even if the emotional barrier gets crossed. The other way to avoid losing a deal is to try your best to stay an objective seller. Treat your transaction as what is is, a set of business decisions and nothing more.

Are you a business seller who has a hard time removing the emotional component of your business sale? Leave us a comment or question here, and we will be happy to help you become an objective seller.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com