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Every business broker knows that the art of negotiation is a deep and complex process that, if done well, finds both parties walking away from the table satisfied (and often very happy). But if executed poorly, the negotiation process can leave participants feeling like there were defined winners and losers – which is never a good thing. If you are considering buying or selling a business, of course I would urge you to engage a seasoned business broker with expertise in negotiating the sale of a business to ensure the best possible outcome. After years of brokering successful deals, I have learned a thing or two about the process. The following are a few secrets and tips when it comes to the negotiation process.
SHIFT THE FOCUS
Business owners who are unversed in successful negotiations often don’t end up closing the sale of their business due to being hyper-focused solely on their own needs. They lack seeing the big picture – which is to get a deal completed that meets the needs of both the buyer and the seller.
A mutually beneficial deal is what every negotiator should strive for. If there is only one winner in a negotiation, that means somebody lost – which is a key characteristic of poor, unsuccessful negotiating. Great negotiators understand that positive deals consist of a series of trade offs. They strive for a Win-Win outcome and facilitate each party’s willingness to bend a little bit in the areas that they can actually bend on.
It becomes a matter of perception. By shifting the focus away from your exclusive needs and putting yourself in the other party’s shoes, you learn what is important to the other side and are better able to align those things with what is important to you.
ASK QUESTIONS AND BE A GREAT LISTENER
It is imperative in the negotiation process to ask the right questions of both parties and, probably more importantly, to be an active, insightful listener. Having an active ear in the negotiation process means hearing and acknowledging what each party is saying and, as importantly, what they are not saying.
By asking discerning questions throughout the sales process, a strong negotiator gains an understanding of those items of importance to each party. This knowledge helps to distinguish the areas of agreement among the parties, as well as those areas that still need some work.
Smart questions and active listening can save substantial time within the negotiation process. Buyers and sellers sometimes assume that something is important to the other party when, in fact, it is not. Likewise, both sides may already agree on major issues without knowing it.
The difference between a good deal, a great deal and one that falls apart at the seams often boils down to active listening skills.
KNOW THAT THERE ARE MULTIPLE WAYS FORWARD
Great business brokers are always exploring for creative options and simply don’t get attached to a single outcome. By focusing on each party’s interests rather than their positions, a smart negotiator can envision and develop more than one possibility for a path forward. Creativity at the negotiating table is a significant, high-value skill that can turn a seemingly dead deal into massively successful one.
Gregg Kunz is a Colorado Business Broker and Certified Business Intermediary (CBI) with more than 20 years in senior management, a three-time business owner and master in negotiations. He is the principal broker at Rocky Mountain Business Advisors and is considered an expert in Mergers & Acquisitions.
Please note: Our business brokers represent buyers and sellers throughout Colorado, Wyoming, and New Mexico. Our office is located in Denver.