Negotiations are typically a series of offers and counter offers and being prepared well before negotiations start will help ensure you get the outcome you want. As much as it may feel daunting, remember you hold the asset that someone wants and if you are not happy with the negotiating process or the offer on the table, you can always walk away!
Below are 4 simple principles to help you through the negotiation process.
Clarity
Set your objectives. Have a clear idea of what you want to achieve.
Know your limits. Are you certain your lowest asking price is sufficient to meet your financial needs?
Plan your questions. What information from the buyer will help you move forward to achieve a good sale? Listen carefully to what buyers are saying. Often you will gain valuable information on what they need relative to what you are offering. Have they given an indication of their price range or other reasons for wanting this business?
Simplicity
Keep it simple. Think about issues likely to arise through the negotiations and have an answer. For instance, what if you are asked why you are selling, or why you are asking for a particular price?
Being able to provide a succinct answer to these types of questions will give the buyer confidence and remove any confusion or concerns.
Objectivity
Don’t get emotional. Stand back and consider the issues objectively.
Don’t rush into agreements. It is ok to say you will get back with an answer. Only accept offers in writing.
What will you do if you get more than one genuine buyer interested in the business, or you get your asking price almost immediately? Conversely, what will you do if a buyer is slow in responding and you are getting close to your deadline, if you have one?
Flexibility
Think about your options. Negotiation is about getting an outcome that is better than other alternatives open to you. Do you have room to move on non-price related things such as settlement period, deposit, additional fixtures and fittings?
