What Works When Negotiating A Deal?
John Timpson, of the high street Timpson chain, writes a regular column for the Telegraph and this one shares his advice on negotiating deals.
He suggests that you shouldn’t leave it to a third party to do the negotiation and that you should be involved yourself. Do your research prior to sitting down, don’t be greedy and keep a close eye on your lawyers are key points in his article. The full article is available at the Telegraph site.
Q I’ve read that the key to negotiation is to never go alone and always understand what the other party needs, not just what they say they want. What have you found effective when negotiating a deal?
A It helps to have someone with you, but don’t leave the negotiation to a professional advisor; you are the best person to judge the right deal.
The right price isn’t just about price/earnings ratios or valuing the balance sheet; all that matters is what it’s worth to you. If you plan to buy a business, before starting any discussions, get to know as much as you can about your acquisition target.
You’ve made the big decision to put your business on the market. Your reasons for selling are valid, carefully-considered, and “good” – the kind that won’t make a prospective buyer shy away. Now, you may tell yourself, comes the fun part. You’ll come up with a price – maybe a little high, but why not? – and let gut instinct (an attribute common to successful business owners) lead the way.
Wait just a minute. Or maybe a quarter of an hour; however long it takes you to bone up on your negotiation skills with the following steps as a guide. Being a smart negotiator is tantamount to effecting the successful sale of your business.
They suggest a) using a professional (such as a business broker) to assist b) being realistic about the value of your business c) knowing your buyer and what your buyer wants d) being flexible e) having options available and f) getting your timing right.