How to Negotiate a Deal & Sell Your Business Faster
Business negotiations often affects the viability of business deals or business partnerships. During every negotiation deal, whether you own a small, large or freelance business, the challenge is to determine which negotiation strategy to proceed with while keeping in mind the long-term outcome. Most business deals have similar objectives – a winning situation for both parties involved in the business deal. Rather than prioritizing the closure of the business deal, importance is given to the mutual agreements & long-term outcomes. Having prepared for such events in advance, businesses would not only be able to sell the business faster and more effectively.
Gather the Decision-Makers:
To conclude any business deal positively, it is important to gather the right people to negotiate the terms with. As a business seller, identifying the decision-maker(s) of the business deal would consume less time & avoid misleading agreements. For example: During several instances of business deals, either one negotiation party was found in the situation where the negotiation was headed in a positive direction, only to find out the negotiator had to take further approvals from a higher authority. The best and most effective means to avoid such situations is to arrange a meeting directly with the person(s) at the authoritative level.
Being prepared is essential for any business activity, including during a business sale.
✓ Review the business buyer by internal factors such as financial documentation & external factors such as activities of other businesses - website, articles, client feedback and more.
✓ Recognize the actions of other market competitors & behavioral patterns such as the type of terms offered & prices.
✓ Identify the ‘wants’ of both parties. This will enable both parties in working towards a win-win situation, creating the desired outcome.
✓ Visualize future long-term conditions of both positive as well as negative results.
Courtesy goes a long way in any relationship. The objective is to deal with any business situation in a professional manner. Any negative impact during the business deal may automatically reduce the chances of successfully closing the business deal or even eliminate future partnership or deals. Maintaining a long-term relationship between both parties should be the goal, whether the deal may be closed or not. Consider using the ‘mirroring’ technique – repeating words spoken by the business buyer (negotiator), will not only show your attentiveness but also show that you are taking their perspectives into consideration.
Each stage of the business deal process demands a different quality from both parties. Limiting the deal to only one outcome may lead to non-closure of the deal. Understanding the dynamics during a deal is crucial for the business seller. Enhance your negotiation position by having fair alternatives, simply allowing you to make the best decision on how to proceed.
Hiring a lawyer or a business advisor would ease out the business sale process. The longer the negotiation takes to be completed, the higher the chances of disrupting the process. Promptness & active participation would result in the closure of the business deal. However, rushing or making compromises during the deal should be avoided. It is vital to comprehend whether time is with or against you.
✓ Accepting the first offer you receive is often considered to be a mistake. Business Sellers should not settle for the first offered deal, instead consider a counter-offer at a higher price or better business terms.
✓ An effective negotiation tactic used by skilled negotiators during finalizing a business deal is setting an expiration date for you offer – this will ensure the business buyer takes the deal seriously.
✓ Every negotiation requires a draft version of the agreement. As a Business Seller, it is necessary to hire professional lawyers to prepare the agreed terms by both parties (something we already offer at Bexit during the negotiation stage). Documenting the terms also gives Sellers the opportunity to include reasonable terms that may not have been discussed earlier. In most cases, business buyers would not make drastic changes in the Agreement. Finding the perfect time and balance to share the draft agreement is key.
At Bexit, the negotiation stage includes the Pre-final Agreement between Business Sellers & Buyers which takes place in person, prior to signing the Draft Agreement Contract during which the lawyer is present. The objective is to assist business sellers & buyers to negotiate effectively & sell businesses securely and fast!
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