Business Negotiations

When selling a business, the negotiation stage is of critical importance. This tends to begin once an offer has been made. Unfortunately, those with inexperience can make costly mistakes during this part of the selling and buying process, which is why it is vital to use the services of experienced advisors who can advise and assist you. Read on for more information regarding business negotiation.

How should you prepare for the negotiation stage?

  • Your 'walk away price' – Before you begin looking at different negotiation strategies, you need to determine your walk away price. This is something you should discuss with your advisor. Once this price is established, stick with it, no matter the circumstances.
  • Due diligence – An important part of the negotiation process involves conducting due diligence on the buyer to ensure that they are trustworthy and financially sound.
  • Understand the market – Not only do you need to understand your buyer, but also you need to know the marketplace in which you plan to sell your company. This will give you a better perspective. Understand the associated value of your company assets and pay particular attention to any relevant activity in the market.

What factors do you need to consider when negotiating the sale of your business?

  • The buyer’s perspective – It is important to be as flexible as you can, and understand the point of view of the buyer. It can be easy to get wrapped up in what you hope to gain from the deal, but you need to think about what they stand to gain from buying your business. It has to be an attractive deal for them too.
  • Remember, price is not everything – Of course, price is of huge importance when selling your business, but it is not the only thing that needs to be determined during the negotiations. The terms matter enormously. What is in store for senior management and employees? How is the payout going to be structured?
  • Making the first move – Don’t be afraid to make the first move. We simply assume the buyer should, but there are advantages to be made by laying down the first offer. It can set the tone for the deal, making sure you have the upper hand, and, of course, it will get the conversation started a lot earlier too. Your advisor can help with this.

Why should you use the services of professional consultants?

The experience of business selling agents can be worth its weight in gold during this stage of the sale of your company. They will have negotiated on many deals in the past, and thus they will know how to overcome every hurdle that comes about. They will know what to consider, and the fact that they are motivated to sell at the highest price makes a monumental difference. After all, it is easy for emotions to cloud judgment when an owner gets too involved. Remember, it’s fine to walk away at the ‘eleventh hour’ – if you fell something is not right, and your advisor agrees, you shouldn’t proceed. If you’re looking for further information on how to negotiate, or are looking for professionals to help, contact us here at Kingswood Business Sales on 01858 545805 and benefit from our wealth of experience and educated advice on the sale of your business.

When we chose Kingswood to sell our business we believed that their simple, easy to understand proposition to sell our business “a better way” was just what we wanted.This is exactly how it worked out with professional support from beginning to end. And the fees were exactly as quoted!

I would use Paul Holohan and his team at Kingswood again without question.

Bob Hanks