After you've completed due diligence, and have come up with a price you are willing to pay for the business, it is time to make an offer. It is strongly recommended that you build your offer with the assistance of your lawyer.
It is very common for an initial offer to be met with a counter offer, which means that you will enter into negotiations. You may choose to conduct negotiations on your own or engage an expert to assist you.
Negotiation is a learned skill. If you are uncomfortable with the process it is recommended that you have an expert assist you. You can also increase your negotiation knowledge in advance by reading articles, watching videos or reading books such as "Negotiation Genius" by D. Malhotra & M. Bazerman and "Never Split the Difference" by C. Voss.
- Remember this is a business discussion. Keep your emotions in check and do not allow passion to make decisions for you.
- Set your maximum price in advance and be ready to walk away if the seller isn't willing to come down.
- Negotiations need not be distributive (i.e. just about the price). There is always an opportunity to negotiate for non-monetary items such as transition assistance, training, sales assistance, etc.
- Speed should never be a factor. Buying a business is a large financial and personal investment. Take the time to review any offers presented to you and push back on deadlines for responses that you don't give you enough time.
- Role play the negotiation in advance and try to anticipate what the other party will ask for, or turn down.
- Make sure you're satisfied with the outcome. If you are not comfortable with the final deal be prepared to say so and if necessary walk away.
- Be prepared to move forward with finalizing the purchase once negotiations conclude and if both parties are satisfied.