Getting To True “Yes” Faster
Buyers and sellers of just about anything (products, services, businesses, houses, website domains – you name it) seek the best price possible, based on perceived value. And the best price is usually higher for the seller.
Take the value of a business. You can estimate it many ways – as a multiple of EBITDA, for example, with an eye on cash flow and gross sales. Whatever the formula, the valuation itself is informed by the assumptions buyers and sellers make, and they’re rarely the same. Both will scrutinize past performance and future gains, but they’ll put the same data through their own crunchers and come up with different price points. That’s how it works.
How can we make negotiations go smoother? We go into them with our minds and ears wide open.
- Remember, value is in the eye of the beholder. The word “reasonable” (as in reasonable price) is always subject to individual interpretation. You can have polar-opposite views and still get a win-win result by crafting an agreement that recognizes individual viewpoints.
- Get over yourself – and listen. Too often buyers and sellers focus exclusively on their own needs. It’s crucial to stand your ground, but there’s someone else at the table whose input is as valuable as your own. Listen.
- Take the long view. The more robust the perspective (for example, long-term vs. short-term) the more likely that diverging viewpoints can be accommodated.
- Don’t take it personally. Sellers typically have a strong emotional bond to their “baby.” Factor that in, and try to discount it if you can.
Remember, it’s about a successful outcome not all of the detours in between.