The Importance of Experience When Negotiating a Business Sale

by Hugo Martin 11th of August, 2023

The Importance of Experience When Negotiating a Business Sale

Mark Twain said “A man who carries a cat by the tail learns something he can learn in no other way”, that is to say that experience comes living, doing, experimenting, achieving and failing. When a seller selects and employes a business broker to sell their business, they want to be sure that the broker has held the cat’s tail.

Nothing, but nothing can replace experience when it comes to negotiating the sale of someone’s precious asset.

Every sales transaction is unique; the character and personality of each business is reflected the detailed elements that gives that business its reason for existing. A source of income to the owners, a generator of ideas to the multiple stakeholders associated with the business, an employer of people, a generator of ideas, innovator, a social good, a place of meaning and purpose.

To be able to fully understand all these factors and how they interact to achieve value requires experience, and the ability to effectively communicate and advocate for their value status.

With that experience a business broker who has a track record of successfully negotiating business sales becomes a very valuable asset in achieving a desired outcome. There are many steps in that process including:

Preparation.

This is probably the most important step. Understand the business totally. Understand your position; what you want to achieve. Try and understand the buyer’s position, and other stakeholders, such as landlords, and what they want or not want to achieve. Where are the likely common areas of agreement, and where are the possible areas of disagreement or conflict. Roleplay and brainstorm these before commencing the negotiation process.

What do we want to Achieve?

The seller

They will mostly want the best price, the best transition, security of employment for existing employees, the successful continuation of the business into the future.

The Buyer

They will want the most advantageous price with most secure restriction of competition, security of tenure at advantageous rents. Skilled and qualified workforce to grow and secure the business into the future. To secure all intellectual property as well as physical property and a business that is not going to be disrupted into the future.

The Landlord

Will want no change if they have a secure tenant who is finically strong.

Employees

There is always trepidation with change. In most cases skilled qualified employees are at a premium and can in many cases be the cause of a decision to proceed with a purchase.

The business broker’s negations skills will enable all parties to move forward to a successful outcome. This is achieved through expert communication skills, and that is having excellent listening and empathy skills to steer the negations to a successful outcome.

An experienced negotiator never gives up! They will hold the deal together, know when to pause, when to retire into your corner, and know when to tie the deal together to the successful outcome of all stakeholders engaged in the transaction. As Albert Einstein said.” The only source of knowledge is experience”. Always use an experienced, knowledgeable negotiator to achieve that successful sale!

Tags: selling acquisition small business entrepreneurs