Top 10 Negotiating Tips When Buying a Business

negociating tips

If you’re looking into the purchase of a business, then you’ll be aware that it’s not quite as straightforward as other purchases, and one of the benefits of this is that there’s often room for negotiation. There’s no set price or set way of valuing a business; there are different ways in which companies and individuals will do it. Many people will choose a service such as offered by Axis Partnership, but in order for you to get the very best deal yourself, take a look at these tips.

 

  1. Never agree to purchase a business at the first price you are quoted. Just like you’d haggle when buying a car or house, you should attempt to bring the price down when buying a business. It’s very rare to find that there’s no opportunity for movement.

 

  1. Start low, but don’t be insulting. If you’ve done your research on the business, you can work out the very minimum the business might go for, and this is where you start. Going in with an obviously undervalued price can harm your position.

 

  1. There’s no place for goodwill gestures in a business acquisition; making concessions can easily lead to your opposing number strengthening his or her position. Don’t confuse this with the valuation of goodwill as a going concern.

 

  1. Have a good poker face. It’s important that whenever you receive a counteroffer or response from the other side, that you are measured and don’t give anything away.

 

  1. ‘What if’ questions are always a good way of putting the seller on the back foot and strengthening your position. Ask them what would happen in a number of scenarios to find out how much they know, and how capable the business is.

 

  1. Planning your answers is very useful indeed. Rehearse what you’re going to say in certain situations that you predict might happen.

 

  1. Do not allow the position of the seller to influence negotiations. Their status, wealth or attitude should have no bearing on this isolated deal.

 

  1. Indifference is the best response to give if the opposition is negotiating aggressively, as they are likely pushing you into a reaction.

 

  1. Don’t discuss how much you can afford to pay until you’re in the very late stages of negotiation. It’s a useful bargaining tool, but can make things difficult at the start.

 

  1. Finally, don’t forget to negotiate the terms of the deal alongside the price, as these can be very important too.

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