Do you wish to buy a business but wonder how to negotiate buying the business?
Are you planning to buy a business but do not know how to go about it?
Here are few tips that will help you negotiate the deal:
Negotiating is a very important skill that an entrepreneur should have in order to enjoy the benefits of success for your business. It is an art that a few have which others have to learn and cultivate. Have an appropriate business negotiation plan in hand and that will help you get the best results from the agreement. However, the process of buying a business is no less than buying a new enterprise. It takes a lot of effort, time, and a high level of commitment. It requires as much time and attention as required while creating a plan for a new business.
The negotiation process might differ from industry to industry based on the fluctuation in the market. Take into consideration the consequences and impact of the ownership of the particular enterprise that you will face in your professional and personal life. The decision taken before buying a business is very important as it brings a significant change in the financial situation of the buyer. So investigate into the nature of the business and find out if it will be suitable and rewarding for you.
The most important rule while negotiating a business is not to accept the first offer by the seller no matter what the figure is. Even if it is lower than what you had expected or had in your mind. You still have a chance to reduce it further. You should respond by offering a minimum price assuming that the figure was higher than what you had evaluated. The seller might be surprised by your offer but this will help you set an edge for negotiation strategies. Give a substantiated reason for the figure you have offered to the seller. This can be done with the help of an accountant or a broker if you have hired any.
In a situation where the seller accepts your offer immediately, this means your evaluation was high and you should try and re-negotiate again politely. The seller now has the power of negotiation techniques after gaining so much information about you. Ask for a reasonable price and see what happens.
Do not fall into a trap by telling the seller what figure you can manage to pay. This can possibly be answered if you think the seller is trying to help you through an instalment payment method or if he is determining a possible time for pay back. Now, after the price on which you both have agreed has been settled, decide on the other conditions such as payment transfer mode, time of payment, and verifying financial statements before transferring the entire amount. The final payment should be made only after you have satisfied yourself on all the aspects.
When buying a business the most important thing to do is to Negotiate. Never buy a business without business negotiation. Do not tell the seller a fixed price or do not let them know how much you are willing to pay. Wait for them to give you a price. Talk to your legal experts about the price and find out if it is worth it. Take a quick review of the products and services of the business in the market. Negotiate till the last minute, the more you ask and try to convince them, the better it is for you. Be kind and polite and offer them a one time payment – this would interest them.