Generally speaking, when buying a business, there are a series of offers and counter offers which make up part of the negotiation process. You as the buyer want the cheapest price you can get and the owner/vendor wants to sell at the best price they can get! So somewhere in between can often lead to a mutually acceptable price.
Try to stay objective and reference your reasons as to why you want this business. Go over your research material, your business plan and projections that you should already now have, before you start negotiating. Some other helpful hints:-
- Don’t be afraid to ask questions.
- Know your price range and stick within it.
- Have a plan well before any negotiations start.
- Negotiation is always an option, so don’t be rushed into a decision you are not sure about. There will always be another business for you.
- Negotiation should be about getting a win/win outcome.
- Make sure your financing is in place so you can close the deal quickly if necessary.
- Make sure you are clear about what you want.
- Consider what is most important to you.
- Don’t assume the Vendor shares your priorities. Ask questions and listen carefully to the answers. This will give you insight into the reasons the Vendor is selling and their priorities. For instance, does the Vendor have a deadline?
- Consider points you are willing to concede to get the business at the price you want.
- Make sure you do your homework on the area so you know what a fair price is.
- Be confident in your knowledge about the business and the area, for instance, is their growth potential in the business, or even the location of the business.
If you don’t feel comfortable negotiating yourself, you can always employ the services of a Negotiation Advocate. These professionals are trained negotiators and may be an option to consider. Alternatively consider your accountant or solicitor to do the negotiating for you.
