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Negotiation Tips For Owners: Strategies For Business Sellers Selling A Small Business

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Comments & Replies: 2     Views: 3200     Posted By: Rob Hartman  Rob Hartman, Business Broker, SF Bay Area

What are some of the better negotiating tips for business sellers selling a small business. In this Discussion I will list several key strategies I feel work and have others comment on them as well.

Topics: Business Brokerage, Deal Structures, Selling A Business     Tags: for sale by owner, selling a business



Great article Craig.

The first thing I think helps reduce the chances of a deal going sideways is to have a long due diligence period, between 10-14 days, and also right before I go to escrow I go to the landlord and get a feel if the buyer will able to be approved. I try to get the buyer to show commitment by getting a check for $10,000 to open escrow. Yes, the buyer can always back out and get their money back, but if they only want to put $2,000-$3,000 as an initial deposit, then that doesn't show a lot of commitment, because although it is $2,000, some people would just walk away from that, so at least with $10,000 they have some skin in the game.

When taking the listing I tell the seller that everything that is in the store the buyer is going to want, so if the seller says, "oh that 62" TV on the wall, I'm taking that when this place sells", I tell them to then take it out now, because if a buyer sees it, they'll want it.

Another thing I think is important, that as the broker, we set the pace of the transaction. If a buyer wants some sort of concessions, then get them to write it down, nothing "per telephonic conversation". I try to present offers and counter offers in person, because things can be easily dismissed by either party over the phone. I try to slow the process a bit. I think you can tell when a transaction is going to blow up most of the time, and so you have to ask yourself, are they really trying to get concessions or find a way to back out of the transaction.

I also have the buyer do training (2 weeks, most of the time) after escrow, not during. If the buyer starts training before escrow closes, then that opens it self up to all sorts of problems.


  Helpful Resources To Assist In Selling And Buying California Businesses
Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Elizabeth McGovern: Escrow Services - SF Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area

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Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

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Jeff Back, Broker: Restaurant Specialist - SF Bay Area

J. Back & Associates Restaurant Real Estate was founded in 1988 as the first bay area real estate company to specialize exclusively in restaurant real estate. I am the past President of Charley Browns restaurants and have been involved in the restaurant business for over 35 years. 925-736-8200.

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