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10 Major Mistakes Business Buyers Should Avoid - Not Using Intermediary For Negotiations

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mistakeMistake #7 - Not Using Intermediary For Negotiation

Something changed in your life and you decided to own a business. You could probably start from scratch, but considering all pros and cons decided to acquire an established business. Well, it's a very wise decision as long as you do it right. Unfortunately, new business buyers make many mistakes that make business acquisition much harder, some times causing substantial financial and emotional hardship, other times loss of otherwise promising business opportunity altogether.

 

Let's review 10 major mistakes that business buyers make that prevent them from successfully buying a business.

 

Mistake #7 - Not Using Intermediary For Negotiation

Buying a business, and especially negotiating a deal can be very stressful to both the buyer and the seller. Just imagine that one side is selling their most valuable possession, and the other side is about to make the biggest investment in life that may affect all their future. They negotiate price, down payment, financing, training, non-compete, and other terms of purchase. Trying to negotiate the lower price, it's quite possible that during face-to-face negotiation buyer may start criticizing the business' condition or current management style. How do you expect the seller to react to such comments. "I don't need to take a crap from you" or "I'd rather burn my business to the ground than sell it to you..." immediately comes to mind. With all this electricity flying in the air it's very hard to stay civil and maintain business-like attitude.

Larger companies deploy an army of lawyers or mergers and acquisition guys to actually negotiate deals. Small businesses can't afford such luxury, however putting a  independent third party in between can eliminate unnecessary strain and help actually accomplish something.

BUSINESS BUYERS AND SELLERS SHOULDN'T NEGOTIATE FACE TO FACE - IT CAN EASILY KILL THE DEAL.

Business intermediary will communicate with each party separately, and being a professional negotiator, can smooth out rough edges. Business brokers also know many tricks allowing to find solution for seemingly unsolvable situations.

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Guest Monday, 18 December 2017