How To Keep A Great Buyer-Seller Relationship: Don’t Let Aggressive Negotiations Spoil The Deal!
Winning an argument can be easy. Play to the crowd. Dismantle your opponent’s talking points, one by one. When the person arguing with you feels like a fool or a jerk, you’ve probably won the argument.
Negotiations aren’t arguments. When the person sitting across from you feels like a fool or a jerk, you’ve lost the negotiation—and the opportunity to sell your business to that person.
In almost all business negotiations, the buyer and seller will work together for months, transitioning business ownership as smoothly as possible. This is the key to business negotiations: Both parties need to want the business to succeed for years to come. You have to be able to work together—and it’s hard to work with someone you have bad blood with.
Here are some tips to keep your negotiations in perspective and help you create win-win scenarios for you and the prospective buyer:
Luck favors the prepared
How did you come to your business valuation? What’s the range of prices you’re willing to accept? Are you ready to offer a higher vendor take-back (VTB) or negotiate earn-outs if you can’t achieve the price you were looking for? Are you able to invest more of your time?
There are dozens of knobs that you can tweak during a negotiation; you should know well in advance of the actual negotiation stage which of those knobs you’re willing to touch and what areas are non-negotiable. By planning well in advance, you give yourself plenty of room to find a deal that’s satisfactory to both parties. Your business broker can help you better understand which tools you have at your disposal during negotiations.
Don’t put your emotions in the driver’s seat
You’ve put a lot of hard work into your business—many of our readers probably built their business from the ground up with their blood, sweat, and tears.
There’s a part of you in your business. It’s understandable that you’d be reluctant to give it up—especially for less than you feel it’s worth.
One of the biggest advantages of working with a business broker is that, while they’re not impartial, they aren’t emotionally attached to your business. Your business broker will work to get you the best possible deal while limiting how much emotions can cloud judgment.
Avoid taking a hard-line approach
Negotiations are just that—an attempt to come to an agreement between two parties that have differing interests. By taking a hard-line approach, you don’t leave any room to actually negotiate.
Some things are, of course, non-negotiable. You may not be willing to stay on for more than 3 months at the business you’re selling. You might not have the ability to offer a higher VTB percentage.
Find the areas where negotiation is possible—those will be the knobs you can tweak during the negotiation process. Furthermore, you and your business broker can come up with timelines—not ultimatums—to keep the sales process moving along.
In the best negotiations, everyone wins
Jason Brice is a business broker in Canada who wants to get you the best deal for your business. That means creating contracts that feel like a win for every party involved. Take the stress out of negotiation—let Jason Brice handle business negotiations on your behalf!