Are you planning to purchase an existing business? If so, what measures do you intend to employ to get the best deal?
When buying a business, negotiation is the key. If you are good at it, you’ll get the business you want at the best rate. If not, you’ll chance of paying more than its value is higher.
It’s therefore important that you follow these negotiation tips.
- Consider The Business You’re Buying
Any business won’t remain in the industry indefinitely. At one point in time, it’ll have to be sold. Here, the seller and the buyer need to be content throughout the entire process.
When purchasing a business you don’t want to pay more than its value. On the other hand, the seller wants to sell it more than its value. How then do you solve this impasse?
This can be done by negotiating. If you aren’t good at negotiations, consider getting an expert or broker you can trust to help you.
The good thing is, negotiation is a skill, and everyone can master it. All you need is practice, diligence and application. With time, you’ll be able to cut through deals with ease.
- Be Prepared
Do you want to win in your negotiations and get the best deal possible? To do this, you need to be prepared. The people you’ll be negotiating with will definitely be prepared.
As such, you’ll need to do research about the seller and their business.
For instance, you need to know the reasons behind the listing. They likely want to leave town for good. In such a case, do they have a timeline? Can you exploit it? Who are you competing with on this offer? This can also be dependent on the location of the business. For example, if you are looking at a business for sale in Nevada, and you know the owner is intending to leave the area to move somewhere else, then you may be able to use this to your advantage.
It’s information like this that shapes the entire discussion. Undertake a thorough search on this business and identify its shortcomings. In this way, you’ll be able to negotiate a better deal for yourself.
- Be Optimistic but Not Overly Optimistic
Once you do your homework, it’s time to lay the groundwork. However, the negotiation process is not always fluid,. You need to remember that there is no guarantee that everything will flow in accordance with your plan.
For instance, the selling team may throw a curveball, and if you don’t have a response, then it may weaken your position. As such, you can’t hold rigidly throughout the process. Just make sure you can react to anything that comes your way.
- Be Inquisitive
If you want to get the best deal, ask right questions and seek clarification.
The information you get here should help you make the right decision. If you’re smart, you’ll unearth the reasons why the business is on sale.
In asking these questions, you need to be serious. Don’t just ask questions for the sake of it. They need to be relevant.
Where possible, use open questions as much as possible. Don’t limit yourself to the type of reply you are looking to get. With an open-end question, you can learn more about topics they want to avoid and seek an understanding of them. Put simply, don’t rest until you get the results you need.
The more you ask these questions, the more you will learn, and the more likely you will be successful in negotiating your purchase of the business.