How you can improve your negotiating position

First, formulate your competitive advantage. This includes the presence of a management team, the presence of a professional system for attracting clients, and the presence of an accounting system.

All this taken together is the main advantage on a par with competitors. It is important that when buying a company, an investor sees that it can operate without an owner being present. After all, this kind of business will be more attractive to a buyer than one where everything is tied to the owner.

Second, understand the buyer's needs. Don't oversimplify his desires by thinking that he wants to pay you less and that's it.

Therefore, when you negotiate, you tell the investor: "By buying my company, you not only get a business that can operate independently without constant control of the owner, but you can also fulfill your immigration duty."

Other owners don`t think about it at all, presenting the needs of the buyer as something secondary that they are not interested in.

Also, to achieve the goal, you structure the deal to maximize the receipt of money. Investors want to lower the initial payment. If you can offer the buyer an installment plan, you can negotiate a higher sales price. Moreover, in this case, you will receive more money due to interest in the installment plan.

On the other hand, you need to structure the deal so that you get as much profit as possible in the end. This can be achieved if you have a good working capital structure. If your company has more accounts receivable than accounts payable, then all accounts receivable belong to you. You will receive this money within a certain time after closing the deal. If the debts are about the same, it is worth agreeing with the buyer so that he takes over both.

You can learn more about negotiating from our class.

What should be done to improve your position?

Как улучшить переговорную позицию 3

  • Establish internal work in such a way that the company can run smoothly without the constant intervention of the owner. This will greatly raise the value and attractiveness of the business in the eyes of an investor on a par with your competitors.
  • Show that you understand the buyer's wishes and are willing to listen to their suggestions.
  • Structure the trade to maximize your profits but not scare away the investor. You can offer an installment plan, and this will also increase your income through interest on the installment plan.
  • To avoid falling for manipulative tactics, read our article.

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