Negotiations can be tricky affairs. One wrong move can undo a tremendous amount of work.
In negotiations, it is best to take a moment and think about where the other party is coming from. What are their needs and how best can you meet them? Understanding your buyer’s motivation increases the chances of a successful negotiation.
What Appeals to Most Buyers?
You will not know your buyer personally. This means that you will not know what they value most, how exacting their standards will be, and how easy or challenging they will be during negotiations. Act in such a way that would appeal to most buyers. Ensuring that your business is in strong financial health. It means that your business will be appealing to a corporate executive. It will also be appealing to an individual buyer with a leadership/managerial background. Keep in mind that individuals who buy businesses will want a strong ROI. Oftentimes, they will want the responsibilities that accompany that investment to not interfere too greatly with their current lifestyle.
Playing into Emotions
Owners often get excited and push too hard in the beginning stages of the sale process. However, it’s important to keep things realistic so that buyers don’t feel that you’ve tried to oversell your business. Once the initial excitement has worn off, they may be less likely to make a purchase.
Being Forthcoming with Information
It is quite common that you will not at first know if your buyer has previous experience in your market. As a result, you shouldn’t assume that they understand anything about your business. In short, it is definitely in your best interest to be very honest about your business and what is involved in running it. Sometimes, there are issues that they will invariably discover. It is best to go ahead and disclose those issues early on as it establishes trust and goodwill.
Understanding Expectations
Try to understand what your clients expect from you. This includes whether or not they want post-sale assistance and if so, how much. It’s also important to remember that there is no way for them to know what your expectations are. It may seem like an obvious thing but it can be easy for small details such as this to slip through the cracks with all the other things going on in running a business. The better understanding you have of their needs and wants, the easier time you will have fulfilling those needs and wants without any hassle from either party involved.
An Investment of Value
The investment of value is a term that applies to any business owner seeking to understand what it is that their buyer wants out of the transaction. Knowing this ahead of time can give you a better understanding of which areas your company should be focusing on in order to match those expectations.
The more you know about what motivates your buyers, the more successful you will be in executing transactions with them. A broker who understands the motivations and concerns for prospective buyers can add an important new level of understanding during negotiations. It can give both parties a fuller picture and greater chances at success.