The truth is that it simply comes down to good communications with the prospective buyer as well as concretely deciding what price and terms you will accept in advance.
Getting your negotiations right will be key to achieving a favourable price and terms. Fortunately, the Bizdaq Offers Dashboard provides the ideal platform to receive offers and negotiate your sale in your own time without the need for pressurised phone negotiations.
We’ve put together a guide for negotiating with buyers that will put you on the path to the successful competition of your business sale.
Patience Is a Virtue
Assuming your sale isn’t a distressed one, then you should be patient and avoid accepting your first offer (unless it meets all your criteria). The temptation is to think that no more offers will come, however with the buyer reach of Bizdaq there will be more interest in your business – especially if you are early into your sale.
Avoid chasing interested buyers into making an offer as this will put all your cards on the table and give the buyer ammunition in negotiations. Although you may be in a position where you are desperate to sell, we advise you to avoid any communications with the buyer that shows your desperation. In negotiations, the disadvantage is always with the party that is seen to want the deal to happen the most. Stay patient.
However, most buyers will be very enthusiastic about the new opportunity your business presents. They will be keen to push the deal forward. Your job here is to stand firm on your price and ensure that you are prompt in your response to buyer messages.
Set a Time Limit
To progress your sale it is a good idea that once you have a firm offer from a buyer that you set clear timelines for when key milestones should be achieved. The first is of course to ensure that the ‘Heads Of Terms’ document is signed by both parties to take your business off the market so you can enter the due diligence stage of your sale. Work with your solicitor to set clear timelines and set these in your terms & conditions during your negotiations on your Bizdaq Offers Dashboard.
Decide on Any Concessions in Advance
At some stage of your negotiations, a buyer will generally try to negotiate some form of concession into your agreement. Concessions can range from helping the buyer run the business for their first week to buying a new piece of equipment pre-sale.
You should avoid getting to your negotiations before considering whether you will accept a concession. Carefully consider what if any concessions you would accept to achieve your asking price and favourable selling conditions.
If it isn’t acceptable at the start of your sale, then it shouldn’t be acceptable during negotiations.
Help the Buyer
To ensure a prompt sale you should aim to respond to buyer questions, viewing requests and offers promptly. Taking too long to respond will frustrate buyers and immediately put doubts in the buyer's mind over your reliability.
You should also make sure that you put time to one side each week to handle buyer viewings.
Remember that ultimately helping buyers decide on your business will help you sell your business faster.
Carefully Review Buyer’s Terms
Accepting an offer is an exciting moment in your business. But make sure you don’t get too carried away before you have carefully reviewed the buyer’s terms with your solicitor. Your solicitor will need to check the following:
- Due diligence agreements and timeline
- Proposed price and payment structure
- Purchase exclusions or additions
- Warranties and representations
- Any requests for your future involvement