Forget the Asking Price – Negotiate

When you see a ‘business for sale’, usually it has an asking price. Sometimes you will notice the asking price says ‘ask the seller’. This means exactly what it says. The seller may say that because he does not want his staff, his competitors or even his wife to know the selling price. It’s his right to hold it back, just as it is your right to ask. Sometimes the seller wants you to make an offer. This may be a tender type of sale, where the seller will take the highest ‘bid’.

Always assume the asking price is the start of the negotiation.

Before you even consider making a lower offer, firstly do your checking up on the business. There is no point making an offer for a business you later have to pass over.

If the seller is desperate to sell, you might get ‘sucked’ in by the bargain price and not do your due diligence sufficiently.

One strategy could be, you make a low-ball offer, subject to due diligence checks.

See what the reaction is from the seller. If he says no, ask him for a counter offer.

It is not only sellers who use a broker. As a buyer, you may want to use the services of a broker to assist with the negotiation and the due diligence. A broker will likely get you a lower price, making it well worth paying his fee.

Look on Listabiz for a broker to act on your behalf.

August 1, 2011

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