Selling Your Business Like a Pro
Having a player mindset when selling a business can be a real gamechanger. The goal with this approach is to steer clear from coming across as desperate or highly motivated to sell. Instead, a seller who embraces a player mindset operates from a position of strength. It’s all about realizing you have something of value and then realistically taking steps to move forward.
Keep Operations in Check
It is vital that you, as a seller, realize that your number one responsibility is to your business. You must keep normal hours of operation and activities should proceed as normal. This will ensure that everything at your business is operating at peak levels. Inventories must be maintained, team members must stay on board, and you should continue moving forward as though there is no sale on the horizon. After all, business deals fall apart every single day.
Stay Realistic
Being a player doesn’t mean being unrealistic or greedy when it comes to pricing. While you, and your business broker or M&A advisor, will want the very best price for your business, it is essential that you remain realistic about the value of your business. Remember that like any asset, your business is not worth what you think it is worth. Instead, it is worth what someone is willing to pay for it. If you are like most business owners, you have a great deal of sweat equity built up in your business, and that means your emotions are likely involved. Having an impartial expert evaluate your business and reach a realistic price is in your best interests.
Maintain Confidentiality
A key part of achieving a successful sale is to maintain confidentiality. Experienced brokerage professionals always use confidentiality agreements because they work to protect their clients. One slip up in the realm of confidentiality can destroy a potentially great deal and even damage your business. Don’t work with any business broker that doesn’t utilize the powerful tool that is the confidentiality agreement.
Get the Upper Hand
Being a player instead of a seller means that you act from a position of strength. Circumstances often dictate whether or not a seller is in a position to act from a position of strength. For this reason, you’ll want to sell when you are not forced to do so for personal or financial reasons. You’ll want to prepare your business for sale when you are not under any pressing stress to sell. Investing the time to clean up your balance sheet, address any environmental or leasing issues, assemble key documents, settle litigation and other key steps, should be done long before you wish to sell. In short, you want to be ready to sell whenever you feel like doing so.
Selling a business is a complicated process with many moving parts. Quite often, it is the structure of the deal that is more important than the price. Maintaining momentum is often the most important part of achieving a successful sale, for deals that drag on for an extended period of time are more likely to fall apart.
As a player selling from a position of strength and not a seller who is in reactivity mode and must sell immediately, you set yourself up to be firm but also utilize flexible thinking. Being flexible and realizing when to bend can make all the difference between a deal happening and a deal falling apart.
Copyright: Business Brokerage Press, Inc.
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Strategic Negotiation: Essential Tactics for Deal Success
Negotiation can evoke a range of feelings: some people thrive on it, others dread it, and many fall somewhere in between. Regardless of your stance, the ultimate goal remains the same: to emerge successfully from the negotiation. Mastering effective negotiation methods and tactics can give you an edge where others might falter. The objective is to close deals effectively. Here are three negotiation strategies that have been proven to close more deals.
Leverage the Experts
One common belief is that you should never negotiate your own deal. Business owners are often too emotionally invested in their businesses, which can cloud their judgment. Buyers can also become overly emotionally attached. Engaging a professional business broker or M&A advisor can be a strategic move toward achieving a favorable outcome. A professional broker not only knows what constitutes a fair price but also understands the many factors that influence the negotiation.
Take it or Leave it
Another strategy to consider is the “take it or leave it” approach. In this method, the buyer presents their offer, the seller makes a counter-offer, and then the negotiation ends. The seller maintains their position and hopes for the best. This approach carries risks, as showing some flexibility can often lead to a successful deal. While the “take it or leave it” strategy can be high-risk, it also has the potential for high rewards. An experienced brokerage professional can assess whether this strategy is appropriate based on factors such as the business’s appeal to future buyers.
Addressing Variables
A third approach involves focusing on the most important variables for both the buyer and the seller. Understanding what matters most to both parties can be crucial in crafting a successful deal. It’s important to remember that key issues aren’t always financial; they might include commitments to retaining key employees or allowing a relative to remain involved with the business. Recognizing the complexity of buying a business and addressing these variables can facilitate a smoother negotiation process.
Reaching a Compromise
Finally, consider the strategy of splitting the difference. It’s essential for both buyers and sellers to avoid letting ego derail the deal. Quibbling over minor differences in a multi-million-dollar transaction is usually counterproductive.
Offering to meet halfway between the seller’s asking price and the buyer’s offer—provided the disparity isn’t too large—demonstrates goodwill and flexibility. By proposing to split the difference, you reduce emotional tension and show that you value reaching an agreement.
In dealmaking, don’t be afraid to think creatively. Every business, buyer, and seller is unique, and each deal presents its own challenges. A skilled business broker or M&A advisor will evaluate each situation on its own merits, rather than adhering to a rigid formula.
Copyright: Business Brokerage Press, Inc.
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