Benchmark Business Group

Don’t Slam The Door On Lowball Offers

May 15, 2023

The process of selling a business can involve multiple offers and counter offers between buyers and sellers before an acceptable agreement is reached.

Some buyers start that conversation with what may seem like a ridiculously low offer, often with unfavorable terms for the seller. It’s important to remember that when a buyer throws out a lowball offer, they aren’t being insulting, they are simply beginning the process of negotiation.

Engaging with interested buyers, even those with lowball offers, is an opportunity for you to see your business through the buyer’s glasses. It’s up to you, the Seller, to not let your pride or emotions get in the way of productive negotiations. If the interested buyer has the financial capability to purchase, and the interest to begin discussing a deal, a low offer can lead to a productive conversation.

Instead of slamming the door on lowball offers, be curious about the buyer’s logic and try to understand their concerns and be open to what they consider to be the flaws in your business. By keeping negotiations flowing you can gain insights on the rationale a buyer is using to assess your business, answer their questions, ask your own questions and learn more about their fit for owning your business.

Productive negotiations build productive relationships, and it’s essential to have a productive relationship with the people that ultimately purchase your business. Deal negotiations will include a broad range of details to hammer out and gain agreement on with a buyer. Setting aside your emotion and focusing with your deal team on the deal dynamics that you are willing to accept is part of the sales process.

The more you can understand a buyer’s motivations, fears and logic, the better prepared you will be to negotiate a win/win deal. If you simply dismiss low-ball offers without exploring them, you’ll miss the opportunity to be more prepared to engage with other buyers, and you may miss the opportunity to sell your business to a willing buyer, for a win/win price!

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