Taking a Seat at the Negotiation Table: A Guide on How to Negotiate with an Established Business
By the Liberty Group of Nevada
Competent communication skills are vital to achieving lasting success in the business world. It is important to understand how to negotiate when buying an established business. The following tips serve as a checklist for potential buyers.
Tip #1: Be Prepared!
The best advice we can provide to those negotiating the purchase of an already established business is to do your homework and be well prepared for the discussion. This preparation process involves several steps.
First, you need to understand what you want out of the negotiation and what you are willing to pay for the acquisition. By having a clear understanding of your goals and the conditions that must be met, you will be able to steer the negotiations toward your desired outcome. Understanding the seller’s preferred outcome, is necessary, as well. Having an awareness of the seller’s boundaries will help bring the transaction to a successful close. Awareness regarding the current economic environment for which the business operates is important to understanding the company’s current financial standings. As a potential buyer, you need to know what exactly you are negotiating toward.
Tip #2: Build a Rapport
A key principle of negotiation is understanding that there is a win-win scenario for all parties and that both sides of the negotiation are working toward that goal. Therefore, it is highly advisable for the buyer and seller to establish and maintain a friendly, openly communicable relationship. This increases the chances of a favorable outcome being reached. Contention between parties will result in a prolonged negotiation period and could mean the collapse of the sale, altogether.
Tip #3: Have a Coach/Arbiter
Most people are unfamiliar with the negotiation process, especially when it comes to buying a business. Acquiring the assistance of an individual or organization that is familiar and well-versed in the field, can ease the uncertainty that often accompanies this process. The Liberty Group of Nevada are experts in the art of negotiation. Please call us at (775) 825-3948 to learn how we can help you through the process.
Cannon, L. (2011, January 31). How to Negotiate When Buying a Business. Inc. https://www.inc.com/guides/201101/how-to-negotiate-when-buying-a-business.html.
Hall, J. (2020, June 2). 10 Keys To Better Negotiating In Business. The School of Marketing. https://theschoolofmarketing.co.uk/10-keys-to-better-negotiating-in-business/.
Shonk, K. (2020, November 23). 5 Tips for Improving Your Negotiation Skills. Program on Negotiation Harvard Law School Daily Blog. https://www.pon.harvard.edu/daily/negotiation-skills-daily/5-tips-for-improving-your-negotiation-skills/.