Interest in buying and acquiring fire protection and security integration companies remains high. There are many options for owners ready to sell their businesses, whether to exit or to shift their levels of involvement in their companies. But, having many options does not guarantee every successful business will receive good offers.
To sell your business for the right price, you need to understand the art of negotiation. While business owners need a certain level of financial prowess, the skills required to navigate a high-stakes business deal are different. Even a skilled negotiator can have a harder time pitching a business that is his own, as it is harder to separate feelings from facts.
If you have tried to sell your business on your own and have not received the offers you expected, it may be time to bring in help. Here are five things to consider when you don’t like any of the offers on the table for your business:
1. Business Negotiations Don’t Pair Well with Emotions
As we stated above, business and emotion don’t mix well. This is especially true when it comes to negotiation. The best negotiation is one that’s based on logic, not emotion.
But when you’re emotionally attached to your company, it can be difficult to take a step back and negotiate objectively. There may be flaws with your company you aren’t willing to acknowledge, or things that are hurting its value that you hadn’t noticed. These are difficult things to process in the midst of a business negotiation.
If you’re not getting the offers you expected, it may be time to consider bringing in an outside advisor to help you through the process. Someone who is not emotionally invested in your company can help you clean it up for sale. Then, he can find a deal that is mutually beneficial for both you and the buyer, rather than a compromise for you.
2. Bargaining is Part of the Negotiation Process
When that first offer comes in low, it can feel like such an insult that it’s hard to continue the communication. But, all skilled negotiators know that a little back and forth is part of the process. Similar to any other business negotiation, both parties state their numbers and then work to meet in the middle.
Being willing to see past the first offer, prepare your counter-offer, and then move on with the bargaining is important if you want to bring in an offer worthy of consideration. Many negotiation strategies hinge on handling this stage of the selling process with calm confidence.
For the owner, the process can feel like a stressful conflict of interest. If you are not willing to negotiate, you’re going to walk away from many buyers who may have been a good fit. Choosing to start with a low-ball offer is a strategy, and while it may not be the best one, it doesn’t mean the interested party isn’t willing to increase their offer over time.
3. Having More Leverage Increases Your Value
Most successful negotiations use the power of leverage to bring in a win. As a business owner, you need to understand your company’s unique value and the things that make it attractive to buyers. Find out what your company does better than anyone else, and be prepared to use that as your negotiation tactic.
If you’re not getting the offers you expected, it may be because you’re not using your leverage correctly. Are you selling a business that has unique life safety products or services? Do you have a lot of happy customers? Do you have a solid reputation in your industry? Have you been in business for decades? Any of these things can be used to pitch the value of your company and help you bring in a higher offer.
“Negative Leverage” Can Also Work Against You
It’s also possible that there are weak points that are hurting your value, almost acting as “negative leverage” points for potential buyers. This can include significant debt, a poor reputation locally, or a lack of valuable assets. Addressing as many of these weak points as possible before trying to sell can help business negotiations improve for the better.
The key is to find out what makes your business valuable and use that information in your negotiation. If you’re not sure where to start, bring in an expert to help you assess the value of your company. This person can also help you identify the weak points and create a wise plan for addressing them without stretching your financial means.
4. Negotiators Are Willing to Walk Away
In every negotiation, there comes a point where one or both parties are ready to walk away. This could be because the negotiation has reached an impasse and neither side is willing to budge. Or, it could be a negotiating tactic to increase the other party’s sense of urgency.
As a business owner, you need to be prepared for the negotiation to end at any time. In the beginning, it is easy to fall into a fear of scarcity. The worry that another offer may not be coming can lead you to rush into a negotiated agreement that doesn’t meet any of your ideal terms. You have to be willing to hold out for a better deal and end negotiations when a potential buyer isn’t interested in continuing to negotiate.
When Business Negotiations Are Not Going Your Way
This doesn’t mean you should just give up on a deal. As we mentioned before, patience during the back and forth is one of the most important negotiation skills. But, you have to believe that waiting for the right buyer is a valid alternative to a negotiated sale that leaves you dissatisfied. This could mean waiting to find another buyer, continuing to run your business, taking time to increase the value of your business before marketing it again, or even bringing in an investment partner.
The bottom line is, if you’re not getting the offers you expected, don’t be afraid to walk away from the negotiation. It may be the best thing for your business in the long run.
5. The Right Partner Can Help You Find the Right Buyer
All of the above can feel intimidating to a business owner who does not have experience with negotiating the buying and/or selling of businesses. This intimidation and lack of the right business negotiation strategies can significantly hurt the quality of the offers you receive. Sometimes to win a successful negotiation, you need to bring in an experienced negotiator.
Why a Business Broker Can Negotiate a Better Price from Buyers
An alarm business broker can bring valuable insights and experience to your conversations with buyers. Experienced brokers have the major advantage of having navigated many business sales. They understand the buyers and investors, how they work, and what they like to see. They know the tactics, have many successful deals under their belts, and can help you understand all your options when it comes time to sell.
Allowing a professional negotiator to lead your selling efforts can make all the difference!
You’re Not in The Negotiation Business, So Trust Someone Who Is!
Ultimately, you are not in the negotiation business. You are in the fire and security business. And while your company’s success would not be possible without your ability to handle business deals, selling your business is a different situation that calls for different skills.
Rather than put yourself through the stress of bargaining with buyers alone, enlist the help of someone who has a proven ability to win!
Rory Russell is More Than a Negotiator, He is An Experienced Fire and Security Broker
Rory Russell, owner of Acquisition and Funding Services, is more than an experienced business broker. He has worked exclusively with fire and security companies for over thirty years. He understands how to fight for you in every business negotiation and prepare your business for greater success.
If you are tired of low-ball offers and looking for alternatives to selling on your own, contact Rory today!
You can request a confidential business valuation here to help you make sure you understand the real value of your business. Or, you can call Rory directly and start talking to buyers today. Call 800-354-3863 to speak with Rory and start the conversation any time.
Still not quite sold on the idea of working with a broker? Here are a few more things to consider:
3 Ways a Broker Can Support You as a Security Integration Company Owner: Learn more about how a broker can serve as a valuable resource for security integration business owners whether you plan to sell now or a ways down the road.
Key Benefits of Working To Sell Your Security, Fire, or Integration Company with a Broker: If you’re still on the fence about connecting with a broker to sell your business, you may be interested in reviewing some specific ways a broker can work to your advantage.
Broker vs. Lawyer: Who to Choose When Selling an Alarm Business: Weighing your options as you approach the sale of your business? Take a closer look at how brokers and lawyers compare.