Many first-time buyers have a tendency to push the envelope a tad too far when negotiating the purchase of their first business. Their ambition as beginners is easy to understand, but it will rarely bring about a win/win situation. Rookie negotiators want to be the victors, like they're hunting prey. It can be helpful to remember that even if the other party consents, their doing so is not without notable repercussions.
High-pressure approaches will typically be seen as offensive, obnoxious, rude, and embarrassing. Trust is lost and ultimately the chance to negotiate is usually lost, too. You can usually tell that you're going too far if your prospects find something you say or do threatening, or if they appear to be bothered in your presence. Always be aware of the atmosphere of the meeting so you don't find yourself in this situation in the first place.
Clearly Communicate What You Want
Its natural when you're negotiating with a person you don't know very well for her/him to regard you with a certain amount of suspicion. In a negotiation setting, it may be the other party's instinct to expect the worst about your motives. There could be a million legitimate reasons why you have to hold out on the terms offered, but instead of considering what those motives might be, people are more inclined to draw negative conclusions.
For example, if you are unable to agree to his conditions, your negotiation partner could very well automatically conclude that you're greedy, demanding or unreasonable without ever stopping to consider what additional factors might be at work in your inability to agree to his terms. Based on this suspicious behavior, it is essential that you reduce the possibility of misunderstandings in your negotiation efforts by clearly communicating what you need. It would be awful to miss out on a good opportunity just because someone misunderstood you and deduced that you were untrustworthy. Conversely, if you can give clear explanations why your positioning is what it is, your negotiation counterpart has the chance to process this information and respond more positively.
Develop a Relationship of Trust
Think of the negotiation process as more of a discussion or an exchange of ideas rater than a competition or disagreement. One of the better ways to get your negotiations on the right track is to make sure you cultivate a relationship of trust from the start. Even the initial small talk that happens before the real meeting begins can help your prospects feel comfortable with, and more trusting of, you.
When your prospects trust you, they will be more willing to take the necessary risks to help all parties move in a direction that will benefit everyone involved. If prospects don't trust you, on the other hand, all the evidence, reasoning, facts or numbers in the world won't get them to compromise. Be sure you listen attentively and carefully to your prospects' concerns. Respectfulness will go a long way toward a profitable outcome for everyone involved.
Communicating what you want and developing a relationship of trust are two of the most important factors in negotiating when buying a business. Start with these two tips and you will be off to a win/win for you and the seller.
For more tips, check out this article from Inc.com on How to Negotiate When Buying a Business
Tags: negotiation, buying a business