Details, details, details. When you’re negotiating the sale of a business, everyone comes to the table with their own details—what they want and don’t want, what they need and don’t need, and their own strategies and expectations. Negotiating the sale of your business can involve everything from price to employees to branding to intellectual property and more. It can be easy to get caught up in the minutiae and forget the big picture.
But the big picture is where your head needs to be. Of course, you should come to the table knowing what your absolutes are, but it’s important to also come to the table flexible and willing to negotiate, if need be.
The first thing to remember during the sale of a business is that it should always only be the buyer nitpicking, not you. The buyer is coming in thinking about his/her needs, what your business can provide, and how much money he/she is prepared to spend. The buyer will look over each and every item that your company can provide and ask: do I really need this? Am I willing to pay for this? You, on the other hand, need to focus on selling the business as a whole.
At the same time, watching a buyer nitpick over every little detail about the sale of your business can be infuriating. You just want to get the process moving, to get the sale of your business finalized, and after the transition, to move on with the next phase of your life. The buyer, on the other hand, needs to make sure that he/she is making the right decision. The buyer’s caution and attention to detail is likely going to irritate you; aggravating your impatience and hampering your desire to get your business sold. But it’s important to be patient.
Here are a few tricks during the sale of your business on how to work through the details, one at a time, with the buyer, without losing your mind—or killing the deal.
- Stay focused on the big picture. Ask yourself, if this were a product you were selling, how would you encourage the buyer to commit? Think about what the buyer needs and wants, and tailor your discussions towards the buyer’s needs. The buyer is making a life-changing decision and your company may be the one thing the buyer has been missing all these years. What are the benefits your company provides? How is buying your company going to make the buyer’s life better? Stay focused on the sale, and don’t lose sight of the end goal.
- Understand the problem. If you find yourself nitpicking the details, or if the buyer seems to have gotten derailed by minutiae, sit back and ask yourself two questions: Does it matter? Is it doable?
First, focus on the question, does it matter? How important is the thing the buyer wants changed? Not important? Change it. It’s better to just make the change and move on than to spend hours or days arguing back and forth about it. Is it kind of important? Do your best. Consider your own wants and needs and think about what you know the buyer wants and needs. If you can change it, then do it. But what if it’s very important? Communicate! See if there is something else you can offer instead. You want to sell the business, the buyer wants to buy the business, otherwise he/she wouldn’t have made the offer. The buyer is likely going to be willing to at least talk it over, help you understand his/her perspective, and give you an opportunity to explain yours. In short—talk it out.
How important is the thing you want changed? Not important? Forget it. It doesn’t matter. What does matter is selling the business. Is it kind of important? Forget it. It doesn’t matter. Again, what does matter is selling the business. But what if it is very important? Again, communicate and stay focused on the big picture. In the end, it’s about getting the deal done.
- Is it doable? This is a different kind of question, and one that might take some thought and consideration. Is it even possible to make the change that is being discussed by you and the buyer? If it’s doable, then absolutely, make the effort to get it done, and move on. If not, then your business broker/intermediary should be talking to the buyer’s team about it—to come up with a solution. Always remain focused on the big picture, the end goal—the sale.
Often, nitpicking in any situation is simply a defense mechanism by someone who is under stress or trying to make a major decision (like your buyer). Nitpicking slows the process and usually has a snowball effect. By asking the buyer what he/she would prefer, you can open up the discussion, provide the opportunity for the buyer to realize that it’s just nitpicking, and clear up any problems early on. However, it should be noted, that a nitpicky buyer might also be a warning sign. For example, if you are in the very early stages of the process, and you notice that the buyer is nitpicking every little thing before you even get to the agreement, it does not bode well for the rest of the negotiation. This can be an opportunity to learn a little more about the buyer, and a clue about whether this is the right buyer for your business or not.
Lastly, set your own expectations ahead of time, be patient, and stay focused on the big picture. While there are many details to be discussed, don’t let yourself get dragged too far down in the mud. Work with the potential buyer to negotiate a deal that works out the best for everyone involved.
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