Remember that the price, terms and conditions are all negotiable. Depend upon your M&A Advisor to negotiate to get you the best deal possible. Because you will likely continue to work with the buyer for training or financing even after the closing, it is especially important that you maintain a cordial relationship with them. That said, you’ll have the best outcome when you let the M&A Advisor do all of the negotiating.
You have put both sweat and equity into your business, so we understand that the negotiation process can be stressful. Remember that your M&A Advisor is skilled in the art of negotiation. He will help you reach a deal that is mutually beneficial for both you and the buyer.
Keep in mind your objectives.
In addition to getting the best possible price, there are other important elements that are key in any transaction including minimizing risk, getting the most tax-effective transaction and limiting potential financial liabilities. We will make sure that all of these details are covered in the terms and conditions of the sale.
It is often common for the seller to finance a portion of the purchase price to the buyer. In this case, a general security agreement should be part of the closing documents. We’d also recommend getting a guarantee from the buyer and regularly reviewing their financial statements.
Even when both parties finally get to the point of agreement, you are not done. The deal is not locked in until the closing. Many deals go up to the last minute and then fall apart. Because the offer is non-binding, either party can walk away before signing.
As you work through the negotiations, keep in mind your options. You need to determine this before you start the negotiating process. It may be that you keep the business or you hope that another buyer will make you an offer. We sometimes run auctions with multiple buyers to achieve the highest offer.
You need to assess the likelihood that the buyer will actually close if you do achieve an agreement acceptable to both of you. Note that if you decide to reject an offer, you have in fact purchased your own business for that amount and on those terms. Always rely on your M&A Advisor’s skills to help you get the best deal. In the end, however, it is ultimately your decision. You must decide based upon what works for you.
Mergex is there to support you during all your negotiations!