Tips for Negotiating the Sale of Your Business

There are several steps to follow when negotiating the sale of your business, and when you do, and do them in a logical order, you will be rewarded with a smoother and more efficient sale process.

First things first.

Have you identified your personal needs in the selling of your business?  This is a good place to start when negotiating its sale.  Think about your needs while jogging or as a writing exercise.  Regardless of how you do it, write them down; you’ll be glad you did later.  You’ll want to discuss them with your potential buyer in conjunction with his or her needs prior to bringing up terms or price.  Terms dictate price so be sure to iron out agreeable terms of purchase with your buyer before price is negotiated.  Your price will fluctuate according to how comfortable or uncomfortable the terms make you.

Next step: Letter of Intent

The purpose of the Letter of Intent is to write in stone the agreed upon terms and price.  All other details will be dealt with by the lawyers.  On the note of professional deal-makers, ask any mediator and they will affirm that your best bet for successful negotiating is to remain calm and level headed, while keeping your goal in mind and treating the other party with respect.  Another way in which you can show your professionalism and help to keep the other party engaged is to respond in a timely manner to any inquiries or proposals sent by the prospective buyer.

Finalizing the deal

Either you prepare to close the sale by generating a purchase agreement, or you determine that you don’t have a good match and move on.  It is often recommended that the buyer’s attorney prepare the purchase agreement which is said to save the seller money.  However, not surprisingly, the agreement is then often written to favor the buyer.  In the end, the seller can save more money and strife by having her or his own attorney prepare the purchase agreement.

If the negotiating goes south, or drags on beyond what feels worth it to you, know that leaving that opportunity for greener fields is certainly acceptable.  Be firm on your personal requirements, terms, and price, and know at point you will walk away.  Putting this in your notes with your needs and sticking to it can save you time and agony in the process of selling your business.  Another option that can save countless dollars and hours is the service of Business brokers.  It is important to feel confident about the process you are embarking on, and if you don’t, these qualified professionals can come to the rescue.

Choosing a business broker

Business brokers are trained professionals who help business owners save time and money when trying to sell their businesses.  They work much like realtors in that they charge a commission which gives them great incentive to get you the best price possible for your business; the more you get, the more they make.  They have a number of avenues by which they will advertise your business, both electronically on websites specifically for selling businesses, as well as the typical forms of print media including posting fliers and sometimes the use of a storefront window capturing the attention of passersby.

 The benefits of using broker services are many.  They save you time by filtering inquiries so that you need only bother with the ones that have serious interest in buying your business.  Brokers plug your offering into their established networks of clients and contacts.  They can appraise your business’ worth and predict what it will sell for.  Brokers keep on top of current trends and how the economy is affecting the market as it relates to selling your business.

Listen to your intuition when deciding on a broker.  Sure, they should have professional experience that makes you feel confident about putting your business in their hands, but you should also feel comfortable on a gut level working with them.  As with getting an insurance quote, it is highly recommended to meet with at least three business brokers before deciding on which one feels right for you and your business needs.  Although your broker should have your best interests in mind, don’t forget that ultimately, you’re the one who calls the shots.