Tip 3: Create Alternatives

The actual negotiating process requires far less finesse if you’re negotiating from a position of strength. If I had to choose between expert negotiating skills and a strong position, I’d choose a strong position every time. For example, when you’re in the market for a new car, it’s much more effective to negotiate the purchase when you couldn’t care less whether you walk off the lot with a car rather than when you desperately need a vehicle.

The key to creating a strong position is wanting to sell, but not being forced to. As a rule of thumb, the more options you have, the stronger your position will be. Here are some tips to help ensure you negotiate from a position of strength: 

• Negotiate with as many potential buyers as possible.
• Make certain your business is performing well before you go to market.
• Create alternatives to a sale so you’re not emotionally dependent on selling your business.
• Avoid any appearance of desperation in all negotiations.
• Maintain your emotional objectivity by using your investment banker as a liaison in negotiations.

Once you’ve created your options, you must subtly communicate to the buyer that you’re negotiating from a strong position. Deal with buyers in an interested, professional, but dispassionate tone. Communicate to the buyer that you’re prepared and motivated for the sale, but not dependent on it. Convey that you love what you do, yet now it’s best for you to move on. In essence, send the message to the buyer that you’re motivated but not desperate to sell.