Be a Winning Seller: Good Negotiation is the Key

Be a Winning Seller- Good Negotiation is the KeyYou have made a big decision to sell your business on the market. Your reasoning for selling your business is carefully-considered, valid, and “good” – the kind that does not make a prospective buyer shy away. Here comes the fun part. You will decide on the price of the business – it may be a little high, but why not? – And let your gut instinct lead you through as this is a common attribute successful business owners has.

Hold on a second. Maybe in less than an hour; however length of time it takes you to strengthen your negotiation skills with the following steps as your guide. Negotiating smart is tantamount to effecting the successfully selling your business.

Gather Your Forces

First step, enlist the help of a professional business broker. A business broker understands the tactics for selling your business as well as the sales negotiation process. Gather some information before meeting your business broker such as: the last 3 years of federal income tax returns, profit and loss statements, a list of equipment and fixtures, any copies of leased equipment (if any), lists of loans (if applicable), with amounts and payment schedule, approximate list of inventory on hand, and names of any outside advisors (attorney, accountant, etc.) that you plan to consult.

Be Market-Smart

It is crucial when valuing your business to have a clear and realistic notion on the price. Although you may have impressive financial records, it is just as important pricing your business intelligently. Your business broker will use an industry-tested valuation method, including ratios based on the sales of comparable businesses, as well as the historical data that closely matches your business type. The business broker will use incorporate intangibles to also insure that the value will not be underpriced when selling your business. Simultaneously, the business broker will confirm that you understand how the price of the business is dictated by the marketplace and that reasonable pricing is an absolute must. Majority of Buyers will not wait for an overpriced business to lower in price to reconsider buying the business – they will just go elsewhere.

Know Your Buyer

Discovering the right potential buyer may be more critical than getting a very high asking price. Your business broker will figure out the right buyer for the right business, putting sole focus on prospective buyers who are financially qualified and are earnestly interested in buying your business. Discover early on about the bargaining power of the buyer as well as their plans to finance buying your business. A business broker will do that and further: they will foresee any concerns that a buyer might have and delegate with you over any problems that might make a buyer cautious and therefore unnecessarily adversarial during the process of negotiation. Surrounded by knowledge of negotiating terms, price and other aspects vital to selling the business, the business broker will counsel you each step of the way. A business broker is the ideal person to follow up and keep the deal going in the early stages when the buyer is in consideration of making an offer. You can lose bargaining effectiveness by doing the follow-up yourself when working alone. Having a business broker negotiate on your steed is the smartest way to sell your business. While keeping you at a distance from your personal words, the business broker can get your thoughts across to the other party.

Be Flexible

You will need to keep the offer going when presented an offer from a buyer while negotiating selling your business. Inspect it thoroughly, and don’t immediately despair. Sometimes you won’t get your asking price, but that doesn’t mean that the offer has nothing to comment it. There may be other aspects to offset what you feel is a low figure, such as – if the offer is seller-financed – a consulting agreement, higher payments or interest, more cash than expected, or a promise of a buyer relationship that will make life simpler. When evaluating a deal, inspect the document for a long period and look for methods in which the offer might accomplish your objectives. Foremost, just because the buyer provided a low offer does not mean think in terms of “punishing.” This is easily the worst reason for not accepting an offer – and positively a self-defeating one for you.

Beef Up Bargaining Power

Having options available is the best negotiating weapon. For the seller, lack of desperation is the most imposing one. With any luck, you will not have to wait too long to sell your business. Do not let the business slack while preparing to sell the business. It is imperative that potential buyers see the business at its peak – crowded, and showing no signs of negligence. As an example, keeping normal operation hours, signage repair and other areas of the business, repair or dispose non-operating equipment, discard items that are not included in the sale, and maintaining inventory at constant levels. Make it known that you are not in the position to forcibly sell the business and – if necessary – you have the right to refuse all offers and maintaining the operation of your business. This may be the last thing you will want to do, having made a difficult decision to sell your business, but the buyer won’t know that.

Master the Art of Good Timing

The timing is critical to selling your business successfully. Any deal will go stale if it sits around too long in the market as every deal has a shelf-life. Otherwise, ideas will need extra time to solidify – and people occasionally need a little time-and-space to be objective about their own positions. A business broker will keep this process moving at a consistent speed. The business broker will provide or offer any advice about the specialized contracts and forms needed to finish selling your business.

You will benefit greatly during the negotiating of the sale process with the guidance of a professional business broker. The business broker represents you, the seller, and aims to complete the transaction in a fair amount of time and at a price and terms that is acceptable by you. Helping to generate a win-win situation for all parties involved, the business broker at appropriate junctures will present and assess offers to help structure the sale and negotiating to a successful close.

Copyright: Business Brokerage Press, Inc.

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