The thought of selling your business may be daunting. However, understanding the importance of negotiation and having the right team to support you can make all of the difference. Not only can you close the best deal for your business but you can be well on your way to your next project: be it a new business or even retirement. The best deal is one where both you and the buyer feel satisfied and excited about the future.
Why You Should Always Negotiate
There are a number of reasons why negotiation is important. For one, you cannot accept the first seemingly fair offer that comes your way. The best deals are the ones that take their time and are properly researched and vetted. This is where having a Transworld broker on your side is vital. Since they see deals come through their doors every single day, they understand a good offer versus an unfair one. They can help you vet potential buyers and begin the negotiation process. Some important tips to help you prepare for the negotiation process:
- Price is not always everything
- Be prepared with a walk-away number or have a trip line
- Be comfortable with making concessions
- Who are you negotiating with? Try not to negotiate with yourself
- Do your homework, be ready for hard questions
- Realize it is okay to say no and move on
The first step to selling your business is to find the value and then choose a listing price. Not that knowing that the price is everything when it comes to negotiations. Be sure to play out the impact of the terms too. What else does your business have to offer? If a buyer tries to offer a lower price, be ready to explain what gives your business some “unseen” value. However, do not be married to any number. A buyer may continue to offer below asking so be ready to make some concessions. This means you get rid of something in order to meet the asking price.
Another important note is who are you negotiating with? Are you negotiating with the potential buyer or one of their employees? This is important because the motivation behind the deal is different. For instance, a buyer may want the best for the price and favorable terms allowing for a more big-picture sale that fits into the new owners' vision, while an eager-to-please employee may just be looking for the best price. If you understand who is on the other side of the table, you can understand how you should be negotiating. Your business broker will be very helpful during this stage - as they negotiate with all kinds of individuals every day.
When You Should Walk Away
Finally, even if negotiations have taken days or weeks, know that it is okay to walk away. The thought of that may be insufferable - feeling like so much time was wasted. However, it is not uncommon to meet with a buyer who seems perfect on paper but is miserable to negotiate with. By choosing a “walk away” number, you can weed out the potential buyers who are just not willing to offer what you and your broker know your business is worth. The point is, there is a potential buyer out there who will.
Transworld Business Advisors are here to help close deals. They are not going to allow your business to be sold by the wrong buyer. Once you have developed a trusting relationship with your broker, the rest of the process can feel like a breeze. If you are looking to sell your business, contact Transworld Business Advisors for a consultation today.