The negotiation table in a business deal can be tough, especially if you are a business owner who is deeply passionate about the business you have worked so hard to create.
The key to surviving the negotiation part of your business transaction is to be objective and employ the following strategies:
- Negotiate with your head, not your heart. Typically the first offer from a prospective buyer is low, but what you need to remember is this number is not the final price your business is going to sell for. The first offer is purely a starting point. A low-ball offer can send you over the edge, but you will need to restrain your emotions and try to see the offer in a positive light. Offers of any kind start the negotiation process.
- Let your broker do the talking. A business broker is a huge asset during the negotiation stage of your transaction. They are an objective third party, and will therefore be able to help you navigate your negotiation in an objective way.
- Always remember that you can walk away, and remember to use that fact to your advantage. If a buyer really wants to buy your business, then eventually you should be able to meet in the middle on price. If they are really low-balling you and refuse to budge, then it is always your call to walk away from the deal. Sometimes this works to motivate a buyer to come up on an offer, and sometimes it just means the deal is dead. Discuss these options with your broker to be sure you are making the decision to walk away based on an objective business decision, not because you were emotionally offended.
The most important pointer for a business seller in the midst of negotiations is this: Buying a business is an emotionless process. Your ability to understand this about the buyer will be the key to getting your business to the closing table.
Are you a business seller who has lost a deal during the negotiation phase because your emotions got the best of you? Would you like to know more about strategies that can help prevent the same circumstance in the future? Leave us a comment or question here, and we will be happy to assist you.
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