Flexible Sellers Win At The Closing Table
For most business owners selling their business will be the single largest financial transaction of their lifetime and one that will fund the next steps in life. Once the big decision to sell has been made there are many more decisions to be dealt with throughout the sales process. Many of these decisions have big consequences and need to be considered carefully, others may not be as consequential, however they can carry a lot of emotion.
A key factor to a successful sale is to remain flexible. The enemy of a successful sale is being inflexible and drawing hard lines unnecessarily.
Here’s an example of what to avoid:
In the final stages of a four-million-dollar business sale, the owner/seller announced they were going to keep a riding lawnmower. The mower, which was several years old was parked in a garage area of the business in full view. The buyer, who had seen the mower on multiple tours of the business assumed it was being sold with the business. He drew a hard line and took the position that if the mower wasn’t included the sale was off. The business owner who took an equally hardline position, refused to include the mower. It was a standoff and both parties refused to give in. The sale of a $4,000,000 company was in danger of collapsing after months of deal-making, over a used $1,500 mower.
If it sounds ridiculous, I assure you it wasn’t! These seemingly silly little deal points can easily grow out of proportion under the stress of due diligence and deal negotiations. Fortunately, in this case our business broker was able to step in and arrive at a solution where both parties felt satisfied.
It is essential to remember the goal of the buyer and seller is to arrive at the closing table to execute a win-win deal – a deal where the seller is excited to reap the rewards of business ownership and the buyer is excited to own a rewarding business.
There are dozens of decisions to be made along the way to closing the sale of a business. And often, they require a good degree of give and take between the buyers and sellers. The timing of the sale, financial terms, asset allocations and your availability after the sale are only a few of the decisions you’ll be negotiating. Being flexible allows you to stay focused on the goal of selling while considering the alternative solutions for getting a win-win deal negotiated.
By leveraging your business broker, attorney, and accountant as you are making decisions you can remain flexible on deal terms, and still be confident you’re making solid deal decisions.