In most cases, a business for sale will not have several buyers submitting bids for a business. As stated elsewhere on this site only 30 percent of businesses listed for sale, actually ever sell in California. In many businesses that do sell, they only ever had one real inquiry, one true offer and of course, one real buyer. Going into the process of selling your business with this in mind, may help you when it comes to negotiating terms with a potential buyer.
When you have a real buyer on the hook, and a bona fide offer on the table, it is important not to give the buyer any reason to back out of the deal when it comes to negotiations with the buyer. If the buyer is asking for a concession in one area or another, itís perfectly ok, to flat out accept the concession with no counter offer or negotiation. I was recently involved with a deal where the seller found it necessary to "negotiate" on every point the buyer brought up or concession he requested, even when it didnít affect the seller, financially or otherwise. As we all know, time kills deals, and the more time spent negotiating back and forth over trivial items adds time to the deal process and increases the chance of it falling through, which happened in this case. Now the seller has no buyer, no other offers and has spent the last 2 months working on selling the business instead of working on growing the business.
A better method, would be to keep track of the concessions you make, and then when there is a concession requested, that might affect you, financially or otherwise, you can bring those other previous concessions up. For example, "I understand why you would request "Concession A" Mr. Buyer, but as you probably remember, I have already conceded to "Concession B, C and D" to help facilitate this deal, however, on Concession A I need to make an adjustment," et cetera and so forth.
On the contrary, just because you have a buyer on the hook, and don't want to lose them, doesn't mean you need to concede on every point. If a buyer has taken the time to submit a genuine offer, then you should act knowing they really want the business. It's a lot of work to investigate and make an offer on a business, so if a buyer has gone that far in the process, it usually means they have a desire for the business, and will be willing to make a few concessions to make the deal happen.
What other negotiation tips would you suggest when it comes to selling a business? Please reply to this post or post your comment above - thanks!