February 4, 2020
Three Key Negotiation Strategies
By Achim Neumann
When selling a business, there are three negotiation strategies that are worth keeping in mind:
- Go in with a One-Time-Offer. When making an offer or a counter-offer, a seller or buyer lets the other party know that this will be their final offer.
- Meeting in the Middle. When the buyer and seller are some distance apart in their business valuations, the quickest and easiest means of gaining a resolution that is fair for both parties is to settle on a figure that falls somewhere in the middle.
- Identifying Priorities. Factors will commonly differ on how important they are for both the buyer and seller. Some of these factors will be non-monetary or personal, such as continuing access to certain benefits associated with the business or maintaining certain members of staff. Bringing these priorities to the negotiating table and offsetting one against another may be the key to moving forward.
Both parties have to decide on who is going to represent them in the transition negotiations before the process begins. While some people decide to go at it alone, it is advisable to task an intermediary to get you the best possible deal. Intermediaries have no emotional connection to the deal and possess a wealth of prior experience. Providing they understand the business, using an intermediary can drastically reduce the pressure and stress experienced by both parties during the sale.
Due diligence needs to be done by both parties, buyer and seller. It is essential that buyers keep in mind that the seller knows more about the business than they do. In the pre-negotiation phase, both buyer and seller should try to anticipate what they think will be the other party’s priorities and put special importance on these when negotiating the deal.
If you’d like to speak more about negotiations for selling a business in Maryland to buying a business in Florida, and everything in between, then please don’t hesitate to reach out to one of our M&A professionals at A.Neumann & Associates, LLC.
About A Neumann & Associates, LLC
A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or firstname.lastname@example.org