Buying a business is stressful enough. The thought of adding negotiation to the process is enough to make some buyers run for the hills. But negotiation isn’t a bad thing, sometimes it is even expected, and it can get you a better business deal.
What Can Be Negotiated When Buying A Business
Good negotiation skills are necessary to get the best deal when buying a business, but anything can be negotiated if it is of importance to you. The most common areas of negotiation when buying or selling a business come down to a few select points.
- Price. The sales price is the negotiation point that always jumps first to mind. This is definitely open for negotiation. You should examine the company with a fine-toothed comb before making an offer. Your offer should be fair, but also take into account any additional costs you may incur after the sale. One common cost is upgrading obsolete equipment. If you know you will have to do this, you can try to negotiate a lower sales price to help cover these additional costs.
- Financing. How will you pay for the business purchase? If you need financing, shop around for the best terms for your specific situation. Business loans are hard to come by so you may find yourself talking to private lenders. Always negotiate a loan that you can afford to pay and still make a profit on the business. You may even be able to negotiate with the seller to retain a financial stake in the company until you get on your feet.
- Contracts. Sales contracts are always open to negotiation. Under the advice of an attorney, you may want to change things as simple as the closing date to as complex as a non-compete clause. One important note: always negotiate these changes before you sign the contract.
- Inclusions and Assets. Do you want to keep certain equipment? Negotiate it into the sales contract. Equipment, storage space, vehicles, etc. may or may not be part of the deal. If you want it, ask for it. Likewise, if you want something gone, make that part of the deal.
- Staffing or Seller Assistance. Do you want the seller or certain key staff members to stay on to help you transition? Make sure you put that into a contract. Negotiate how long the seller/staff will remain to assist you and a salary or compensation for their time.
Business Brokers Are Expert Negotiators
If you loathe the idea of negotiating, ask your business broker to do it for you. A business broker will be incredibly helpful if you want to negotiate anything related to the sale. Not only will the broker be able to give you advice on what to negotiate or what to offer for the sale, they can do it on your behalf. That’s right. You don’t even have to be the one to face the seller and negotiate the terms. Your broker can do it for you.
The business brokers at Crowne Atlantic Business Brokers have worked with hundreds of Florida business buyers and sellers, negotiating terms that are favorable to all and make the sale happen. If you need help negotiating the purchase or sale of a business contact Crowne Atlantic Business Brokers at 407-478-4101.