One of the most stressful parts of a business sale is the negotiation. However, the process will be much simpler if you go into the deal well-prepared with the right negotiation techniques. Keep reading to learn how to be a good negotiator when selling your business.
5 TIPS WHEN NEGOTIATING A SALE IN CHARLOTTE, NC
Selling a business requires a lot of planning and can be emotional, especially if you’ve built it from the ground up. While you probably want to get the deal done quickly and for the highest price, you need to go into the negotiation well-prepared so that you can achieve the best results and exit with no regrets. Here are five tips for negotiating a sale so you can confidently step up to the negotiation table.
1. UNDERSTAND THE BUYER
You may think you know everything about your business and automatically have power over the buyer since you’re the one selling, but that’s not outrightly true. You need to properly prepare and research to gain leverage and anticipate any problems. It’s important to understand the buyer’s perspective and have answers prepared for questions and issues about your business that actually matter to them. Becoming familiar with prospective buyers and their true interests is also important. Not only is it important to know who you’re selling your business to, but it may give you more bargaining power if you know their driving interests and why they want to buy your business over others.
2. UNDERSTAND THE MARKET
Understanding the current market will give you greater insight into a buyer’s perspective and help you understand the value of your business and its assets. Pay attention to relevant market activity and the sale of similar businesses in your industry. This will make you a better-informed seller and also help you determine the best sales price.
3. HAVE A SET PRICE LIMIT
Go into the negotiation with a walk-away number. As the seller, this is the lowest price you’re willing to go to close the deal. Don’t be afraid to defend your asking price, and stay disciplined to your walk-away number so you’re comfortable with the final sale.
4. CONSIDER MAKING THE FIRST MOVE
You may be tempted not to show your cards and to let the buyer make the first offer, but don’t be afraid to set things into motion. Doing so can help anchor the negotiation, set the tone for the deal, and give you a slight advantage.
5. REMEMBER THAT YOU CAN WALK AWAY
As the negotiation progresses, you may get tunnel vision. While it may be hard to imagine walking away empty-handed, especially after putting in a lot of time and effort, sometimes that’s the best choice. If you’re not comfortable with a deal, it’s better to walk away than make the wrong business decision and have regrets.