COMMON NEGOTIATION MISTAKES IN SELLING A BUSINESS Many purchases of a business fail because of problems that arise during negotiations. The sad part is that many of the problems could have been prevented. Try to avoid these rookie mistakes: 1. ASSIGNING A VALUE TO OFFERS. Do not think about offers and counter offers in terms of “good” or “bad.” Instead, consider whether an offer is acceptable to you as it is or whether it would be acceptable with changes. In this sense, all offers are good. 2. JUDGING MOTIVES. As soon as you determine that the other person is greedy or insincere you have killed the deal. Rather, assume that since the other party has made an offer that must indicate interest. 3. REJECTING OFFERS OUTRIGHT. It is rarely helpful to your cause to dismiss an offer. Instead, make changes that work for you and give back to the other party. Always put the ball in their court and make them be the ones who reject an offer. Drawing lines in the sand will not get you what you want. 4. ASSUMING YOU ARE THE ONLY ONE DANCING. It is very common to have parties claim to be the only one giving in or doing their part. You can be sure the other party is saying the same thing. It almost goes without saying but negotiating is about give and take to achieve something that works for both. 5. TRYING TO MAKE A KILLING. You are much better off, unless you are at the f lea market, to avoid extreme positions and low-balling. Start with what works for you but also what is within a reasonable range. Beginning “out-of-the-ballpark” only creates ill-will and suspicion that leads to failure in negotiation or failure in the transition of the business. 6. SPRINGING NEW DEMANDS. It is common for parties to bring up new changes they want even after points have been agreed to. Nothing makes other parties more upset than to have new requests pop up out of the blue. 7. TRYING TO NEGOTIATE ONE POINT AT A TIME. Buying and selling businesses involves a wide variety of considerations. It is a waste to try to come to an agreement on one item, like price, without looking at the whole package. 8. FAILING TO PUT THINGS IN WRITING. Parties often want to talk and feel out the other person. That is not a bad start but soon offers need to be put in writing with detail. Scribbling an offer in an email and asking, “Would you take this?” is not productive. Negotiations in a business sale or purchase are all about making something work for both of you, the employees, and the customers/clients. They are not about you winning and the other person losing. For more information, visit www.APS.net or contact Trent Holmes at Accounting Practice Sales at (800) 397-0249 or trent@aps.net.
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