How to negotiate the best deal
In virtually every aspect of daily life, we negotiate in one way or another and we all learn to negotiate from a young age, “if I eat my peas, I can have my pudding…”
It is an important skill that is critical to get right when negotiating the sale or acquisition of a business. Not only can it affect the size of the consideration, but it often affects whether the deal goes ahead at all.
Here are five key points to make sure you get right in negotiating the sale of your business or the acquisition of a business.
Preparation is definitely a winning tactic; make sure you know your facts and figures and plan your negotiating strategy before the negotiation meeting, not during. Decide what you would like to achieve, rehearse the justifications for your position, and know your bottom line.
2) Tell the truth
Whilst clearly there is no need to give away your bottom line position, telling outright lies is counterproductive. Trust is key to achieving a deal that both sides are happy with. Lies tend to be found out, and destroy trust. Trust, once destroyed, is very difficult to rebuild.
3) Keep your cool
Despite efforts to build trust between buyer and seller, there is often a general feeling that the “other side is trying to get one over on me”. This often happens when the details of a deal are being discussed between each side’s lawyers and the buyer and seller themselves are not communicating regularly. Don’t be offended by a bargaining position or when a buyer points out weaknesses in your business. Keep the emotion out and consider the proposal on its merits. If you don’t like it you can always say no and suggest an alternative.
Seeing the issue from both sides is also very helpful when trying to reach your goals, as is admitting fault and conceding points. Clearly not to the point of lose win scenarios but the best negotiators have learnt that being fair to both sides is what works best.
5) Seek a win-win
Don’t try to win every single point. Look at the bigger picture and if you need to concede on a certain aspect of the deal, try to find another aspect of the deal that can be improved on to compensate. Negotiating the sale of a business is not just about headline price, and there are often several levers you can use to find the win-win scenario for both sides.
Remember the best deals are found when both sides win.