It goes without saying that most successful business owners are well versed in the art of negotiations. This can mostly be attributed to the experience gathered over many years in cutting different deals with vendors and customers.
Even so, most, if not all business owners feel utterly unprepared or uncomfortable when it comes to handling negotiations when selling their businesses.
For starters, handling a transaction of such magnitude can be daunting. Even more overwhelming is parting ways with a business that is not only personal but valuable as well. The high stakes involved make the entire process of negotiation incredibly difficult or unique, to say the least.
The process of selling an online business involves two warring sides, although most modern online business selling deals now involve experts who are well versed in eCommerce business valuation. On one side is the purchaser who aims at acquiring the business for not only the best favourable terms but at the lowest price as well. On the other hand, you, as the seller, will aim at acquiring the best seller terms as well as the most favourable prices.
Even so, both parties always aim at finalizing the deal. But how can you as the seller come out of the negotiations victorious? These pointers will give you an upper hand in the negotiation process and emerge with the best deal.
1. Know That Price is Not The Only Factor
While the final price plays a key role in any negotiations, it’s of utmost importance to remember that it is not the only thing. Other factors such as the terms of the deal immensely play an important role in a negotiation.
Ensure to consider other aspects such as the payout and earnout. What will the payout structure be? And will there be any earnings from the deal? Also, consider your staff and management. What will they gain from the deal?
To come out of the negotiation as a winner, always ensure to consider these factors. Once you put all these factors into consideration during a negotiation, you can rest assured that the entire process will be a success.
2. Ensure to Have a Final Number
Having the final number in mind is one of the most important things to have while entering into any negotiation. It plays an integral role when selling your online business as well.
Although final prices can always change during a negotiation, it’s important to, first of all, enter the negotiations with a clear understanding of what the buyer expects to pay.
Do thorough research about the buyer, interview the buyer first to find out what expectations he has.
Always keep in mind that a buyer will expect a walk-away number. Once you have done your due diligence in finding out what price the seller expects, you stand a better chance of having a smooth negotiation process.
While at it, ensure that the buyer is comfortable with the set number. This way, you will have a better chance of negotiating amply to your target number.
3. Make Strategic Concessions.
It’s one thing to have concessions in negotiation and another to ensure that they are well understood and reciprocated by the buyer. But how can you go about achieving this?
To ensure that the buyer reciprocates to your concession, you should ensure that the buyer understands that you are about to give out something of value. Additionally, ensure that the buyer understands how the favor for giving up the online business can be returned to you. Finally, you should demand that the buyer follows the concession to the later.
4. Know the Buyer You Will be Negotiating With
In a bid to sail through the negotiation process smoothly, you should always ensure that you get a clear understanding of the buyer’s true interests.
Even so, always remember that there is a distinct difference between an actual buyer and a negotiator representing the actual buyer. In most cases, these two individuals have different intentions and goals.
While a negotiator may be interested in closing a deal in a bid to attain their career goals, the actual buyer may be compelled to buy the online business for the sole reason of making a profit.
Generally, understanding your buyer gets you in a better position to negotiate and bargain for better terms.
5. Always Make the First Offer
Popular negotiation technique requires that you always play not only to tip the buyer’s hand in order to understand what they have in store but to make the first offer as well. The advantage of making the first offer is that you tend to get an anchor of the entire negotiation.
In most cases, this technique works well if you are more informed than the buyer. However, if you have little or no information advantage over the buyer, playing this strategy might prove difficult. You might have to opt to play coy with the buyer in a bid to win the negotiation.