Negotiation as a Buyer

Hard-nosed, Extreme Negotiation Tactics Rarely Work Well

As a buyer, understanding what you want the deal to look like when all is said and done is important. Be cognizant of how much flexibility you have and where you can give and take. Hitting the seller with unrealistic and extreme demands may just hinder your relationship with the seller. Starting your negotiating terms closer to where you want to ultimately end up may actually produce a better deal than you might expect.

Collaborative Vs. Confrontational – Guess which method will help you most?

Typically, sellers are not desperate. If you go into the deal in a confrontational manner, the seller is not going to share important information you need to know. The seller may believe that the buyer is looking for a reason not to do the deal because of the way they are acting. They might be thinking, “I don’t like you and I don’t want my employees to have to work with you!”

In a recent deal, the process for buying the business was stretched out an additional sixty days. Almost every conversation was a hard core negotiation for the buyer. As a result, the bank kept getting changes on what the deal looked like. It almost got to the point that the bank wanted to back out because they didn’t know what they were dealing with. The seller backed out a couple of times and the buyer came back saying “it was just negotiation, I can do something different!” This did not sit well with the seller.

The idea is to go in with what you really want. You need to have an understanding of what you are trying to get out of the opportunity. The end result needs to be a win-win for the buyer and the seller and that usually means that both parties have to give a little.