MASTERING THE ART OF BUSINESS ACQUISITION NEGOTIATIONS: STRATEGIES FOR A SUCCESSFUL OUTCOME

transparent and considerate throughout the entire process builds trust and establishes a solid foundation. It also likely minimises risks, maximises value and increases the likelihood of reaching a successful outcome for all.

Anticipate the other party's objections, and prepare responses to likely potential objections or concerns.

Author: Richard Jacobs

Associate Barker Business Brokerage

P. 02 1272 8179

E. richardj@barkerbusiness.co.nz www.barkerbusiness.co.nz

Buying a business is a significant transaction and both parties need to consider several factors in the negotiation. Understanding the other party’s success factors is critical to the best outcome.

Establishing a positive respectful relationship with the other party is crucial. Listen actively, be empathetic, and find common ground to build trust. Be collaborative fostering a cooperative atmosphere, being

Stay composed and avoid getting emotionally attached or reactive during negotiations. Emotions cloud judgment and hinder productive discussions. Focus on facts and rational decision-making. Be flexible in your approach and willing to explore different options. Be patient and persistent while working towards a mutually satisfactory outcome.

Premature disclosure of sensitive information can have detrimental effects, hence from the outset establish protocols for maintaining confidentiality and ensure only authorised parties are involved in the negotiation process.

A well-researched negotiator is more likely to be taken seriously and can influence the other party's decision-making. Establish your credibility by being wellresearched, gather market data, industry facts and understand the seller’s motivation for a sale.

Establish acceptable boundaries for the negotiation, ie what is your walk-away point? Continually test and challenge your own assumptions and verify information to avoid surprises.

You must understand who has the final say on the sale and negotiate with them directly if possible. Determine decision-making authority early.

Consider legal and regulatory factors, evaluate their risk and proactively develop contingency plans if possible.

Consideration should be given to surrounding yourself with experts, such as lawyers, accountants, or industry consultants, to provide guidance and support during negotiations. Their specialised knowledge can contribute to a more effective negotiation process.

Performing due diligence as early as possible to do a comprehensive examination of the business, its assets, financial records, liabilities, contracts, customer base, and other relevant information will minimise the risk of surprises or non-disclosures and supports the negotiation process.

It is often beneficial to start a negotiation with non-financial terms such as how warranties will be handled or the management of contingencies. This often helps build trust and create a better pathway for discussing financial matters later.

What is your target price? Are there specific terms and conditions that must be met? What are the specific of what you want to acquire? i.e., tangible assets, stock, people (skilled technicians), recurring revenues (subscriptions), intangible assets (patents, copyrights, brand).

You must be prepared to articulate how you justify your valuation - you need to analyse financial statements, cash flow, customer base, assets, and market position. Incorporate objective standards or benchmarks to assess the value and fairness of offers. e.g., market comparable, industry benchmarks, or independent appraisal reports. Objective criteria help reduce bias and subjective judgments. Consider seeking professional advice from your Business Broker.

Understand the underlying interests of both parties rather than getting fixated on specific positions. Identifying shared interests can help you find creative solutions and expand the range of possible agreements.

Create a list of viable alternatives to the current negotiation. Having attractive alternatives strengthens your position and provides leverage in the negotiation process.

Clearly express your expectations, concerns, and reasoning behind your proposals. Listen carefully to the other party's perspectives and ask clarifying questions. Effective communication reduces misunderstandings.

Be aware of time-sensitive factors that can influence negotiations, such as market conditions, regulatory changes, or the other party's deadlines. Use timing to your advantage when making offers.

A robust backup plan empowers you to walk away from unfavourable deals and negotiate from a position of strength.

If negotiations become challenging, break down complex issues into smaller, more manageable components. Addressing one issue at a time can lead to incremental progress and facilitate the agreement. Sometimes labouring on the small and insignificant takes the focus off the large and significant.

Introduce a give-and-take approach by offering concessions on certain issues in exchange for concessions from the other party. When making concessions, do so strategically. Ensure that each concession is reciprocated with a valuable concession from the other party. Avoid giving away too much without getting reasonable returns.

If financial considerations are a sticking point, explore alternative financing structures, such as earnouts, seller financing, or equity participation. Creative financing arrangements can bridge gaps and facilitate the agreement.

Embrace moments of silence during negotiations. It encourages the other party to fill the void, potentially revealing valuable information or making more favourable offers.

This is now more crucial than ever as we live in a global economy, we need to respect our differences. Some things that are acceptable in one culture may be totally unacceptable in another during the negotiation process, so it’s vital to understand each parties’ cultural backgrounds and how to manage these to ensure everyone is respected during the process.

Remember the best negotiations result in a win-win where the aim is to achieve a mutually beneficial agreement that addresses the needs and interests of both parties.

By good planning, thinking laterally, communicating positively, and understanding value in an evolving negotiation you will maximise the rewards for all stakeholders.

Negotiating is both a science and an art, it requires understanding, practice and adaptability. By considering some of the pointers above, you can increase your chances of achieving favourable results.

The Author, Richard is an awardwinning salesperson & negotiator. He honed his skills as a sales lead and bids manager working for several globally recognised international companies while negotiating many multi-million deals including both large capital asset sales and business sales.

We are pleased to present an exceptional opportunity to acquire a highly profitable accessory and technology repair business.

There is significant potential for expansion and growth. The business model has a highly successful blueprint that can be easily replicated with minimal investment and effort into a highly profitable national network of retail outlets. The opportunities at this point would be endless with either an IPO or franchising the retail outlets.

Operating from regional Victorian locations this business has established a strong brand reputation providing outstanding customer service and a proven track record of financial performance way above industry standards.

The business employs a minimal amount of trained and experienced technicians who possess the expertise to handle various iPad and mobile repair tasks efficiently. The team’s proficiency allows for quick turnaround times and customer satisfaction which is the business’s USP.

The vendor is prepared to sell the business in total or by individual location.

The financial performance of this business is truly outstanding.

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