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Five Negotiation Tips for Ensuring a Successful Business Sale

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As an entrepreneur, you’ll know that selling ideas, products and services is as much about how you handle the process as it is about marketing what you have to offer. 

So, even though selling your business (understandably) feels much more like a unique event, in essence, your negotiating know-how will play a big part in getting the deal over the finishing line.

Here are five useful tips offered by experienced entrepreneur and FSB member Philip de Lisle, to help you get fully focused on clinching that sale: 

Be on time and be polite

You might not want to appear too keen and anxious to please in your negotiating approach, but just remember that this is no time for playing it cool to turn into disrespect. 

Philip de Lisle’s crisp take on this spells out what’s actually at stake: 

"Few things upset a potential buyer more than the seller being late and/or impolite. It is discourteous and shows that you don't care about the buyer, so why should they care about you? I guarantee that your meeting will be short and not sweet."

Be ready to provide the right information

No one could possibly know more about your business than you. So, put it to good use by making sure you’re thoroughly prepared to meet interested buyers. 

This is your best chance of quietly making a big impression. If you can demonstrate that you have all the information they might ask for at your fingertips, then you could soon be just waiting for the ink to dry on that sale contract.

Adopting a more ‘relaxed’ approach, as de Lisle points out, could leave you facing somewhat darker possibilities: 

"Failing to have the right information suggests that you are not on top of things. So what else are you not on top of? It will make a potential buyer nervous and likely to either dig very deeply during due diligence to drive down the price or, worse, walk away."

Keep calm

Negotiating a business sale is an elaborate dance – so be sure your own footwork is up to the odd tough tango.

It’s relatively easy to stay calm through the cut and thrust of everyday commerce, but any serious buyer will guess that, for you, there’s much more riding on this deal. 

If you’ve put in the years building up a business, and earmarked this sale as a retirement instrument, don’t be surprised if you have to field some below-the-belt comments intended to get under your skin.

All this is rarely as personal as it can feel, and de Lisle again sums up what’s really going on: 

"No potential buyer wants to pay over the odds, so they will do many things to make you uncomfortable. If you react you've given them an edge. So don't!"

Define your perfect buyer

As de Lisle explains: “Not knowing what you truly want just wastes everyone's time. Potential buyers will quickly lose interest in you and your company.”

If there are good reasons for why you want a strong say in the future of your business, then choosing your successor will be top of your list when it comes to finding a buyer. 

So, sit down beforehand and list the must-haves that define your perfect buyer. 

And on a practical level, not knowing what you really want just wastes everyone's time. In such circumstances, expect potential buyers to quickly lose interest in you and your company.

Establish what you aren’t prepared to accept

“If you don't know what your red lines are, how can you negotiate effectively? A potential buyer will quickly realise this and is likely to walk away.”

You can only bargain effectively if you are clear about what your own red lines are. 

Clarify on price and certain key conditions in advance, otherwise your buyer will quickly sense the areas where you are becoming weak and find a window to bargain you down. 

While this could lead to you settling for a much poorer deal than you had hoped for, it could also mean a potential buyer loses patience with your dithering and simply chooses to walk away.

By Jo Thornley, Head of Brand and Partnerships at Dynamis. Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between, and and likeminded companies.