Reaching the negotiation stage when buying a business is not easy. For an initial approach to be accepted, you will need to have demonstrated a sound understanding of the company and a good financial proposition. Negotiations can be complex and time-consuming, and will often break down, sometimes at a very late stage. However, many pitfalls can be avoided by the right approach.
Set parameters and goals initially so that you know what you want to get out of the negotiation process. Having a clear idea of your goals prevents the other party from setting the tone and the pace of the negotiations, and enables you to quickly recognise and set right any deviations from your goals. Stick to your major objectives: a good negotiator wins the important issues and allows the other party to win the minor ones.
Thorough research will prove invaluable in the negotiation process. Not only does this demonstrate to the vendor that you have an accurate picture of their company, but it can also strengthen your bargaining position. Any weaknesses you have uncovered in the target company can be exploited, and this may enable you to reduce the price.
Use some basic psychology in the negotiation process: try to understand the aspirations of the vendor. He will obviously be interested in the amount of money he is likely to receive as a result of the sale but if he has built up the company himself, he will probably be emotionally attached to it. He will also be concerned with protecting his reputation, and may have strong loyalties towards his employees. Show understanding for these issues and demonstrate wherever you can how your aspirations for the company meet his own. Do not underestimate the importance of this - you may be competing against another purchaser who is offering a similar financial package.
Ensure that you have a strong, professional team around you who understand your objectives.
Once a thriving online garden centre started in 2018, after an internal dispute the business stopped trading in 2022. In a space of just 3 years the business achieved £500k in turnover. This is a perfect opportunity for someone looking for a new...
Presenting an opportunity to acquire a very profitable plumbers and heating merchants business operating nationwide.
Popular and well-regarded Sushi and Ramen restaurant and takeaway, which is situated in a prime city centre location in Norwich. The premises are set over three floors and are presented to an extremely high standard throughout and offers the opportun...
LEASEHOLD
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.