Have we lost the ability to negotiate? In the last week I have spoken to two prospective business buyers about two very different types of business. Both of them said they were very interested in my clients' business but neither were prepared to put in an offer.
In both cases they considered the business to be overpriced (although one lady hadn't even completed an NDA nor had she requested the accounts, psychic maybe?). Fair enough...........but surely you expect the price to be a moveable feast and open to negotiation don't you?
I go to some trouble to advise my clients as to what I see to be the right price for their business. In 90% of cases we always set the price at a higher level for two reasons:
1. to give negotiating headroom.
2. as all businesses continue to trade and develop whilst on the market it may be that the valuation does actually improve: setting the price at a higher level than perhaps a current-day valuation leaves a cushion to allow for this.
Maybe I have got it wrong but surely one should consider whether the business is of interest then go about discussing the price. Why pull out before getting to price negotiations? Especially if the business is suitable in every other way.
Keith Green - Partner, Anderson Moore
Keith Green - selling businesses and advising SME business owners since 1997 and still enjoying it.
Selling Your Business
Businesses for Sale