Sometimes in the process of acquiring a business, buyers – and sellers – get caught up in negotiating the best possible deal for themselves and lose sight of their ultimate objective, which is presumably to buy – or sell – a successful, ongoing business and maintain – or even improve – its prospects for a highly successful future.
In a lot of ways the sale of a business resembles the sale of real estate, but it differs in one important respect: In most real estate sales, the buyer and seller have little on no common interest following the sale. In many cases, the buyer and seller of real estate may never even meet face-to-face.
Contrast that with a business acquisition, where in almost every case the Buyer and Seller become somewhat co-dependent to successfully transfer and transition the business and its employees, its customers and its vendors. Most business sales will not be fully successful without the continuing goodwill of the Seller following the closing.
Thus, it only makes sense that both parties would want the other to leave the closing table feeling like they got a very good deal. Anything less is simply leaving the door open for future difficulties.
From experience, I believe the only realistic negotiating style in acquiring an ongoing business is: Win-Win, Or No Deal. In other words: If it isn’t a good deal for the Buyer, and/or it isn’t a good deal for the Seller, it isn’t a good deal. Period.
If you know of a business owner who’s thinking of selling or buying a business and who might benefit from a free consultation with us, have them contact me, or any of the M&A professionals at www.bradwaygroup.com.
By: Mike Ertel, Transworld M&A Advisors