How To Make An Offer: 4 Strategies
Many sellers and buyers struggle with making an offer to others. Whether the proposed purchase price, terms, the specifics of a non-compete, or other matters, it can be a challenge. Why? There can be a number of factors:
- Your personality style
- The motivation of the potential buyer or seller you are working with
- The financial/emotional significance of the potential transaction (e.g. retirement after 20 years)
- Lack of transactional experience for either or both parties
- Technical aspects of the proposal that require consultation
- Some or all of the above
So, what do you do in these circumstances?
There are a couple of easy ways to increase the odds of creating a successful proposal.
- Identify the specific issues that are of importance to either or both parties. The specific items that come up often point to bigger life issues.
- Take your time to review your own issues as well as those of the other party. Impatience is rarely a virtue is this situation.
- When talking about specific issues consider the broadest range of options possible. It tends to open up the discussion and may uncover new options for a win-win transaction.
- When presenting an initial proposal, try to use the simplest language possible. While the legal precision of an initial Letter of Interest (LOI) has merit, it may be better to identify key bullet points on a blank piece of paper before forwarding a 15-page LOI that another person can’t read. It’s much easier to go from one page to 15 than the other way around.
There are many other strategies to build a successful transaction, and simplicity is one of the best.