5. Master the Art of Negotiation
Making an offer to buy an existing business can be tricky because the seller is usually set on their asking price, you have your own idea of what the business is worth, and you both want a deal.
Low-balling an offer will just insult people and you should refrain from it, even if you think the seller is attempting to rip you off. Instead try something along the lines of, “I’ve done my research and I think we both know you’re asking too much; something like this (as you nonchalantly slide an upside down piece of paper with the offer on it) better represents what your business is worth.”
Even if the seller is offering a fair price, your offer should be lower than what you’re willing to pay (once again, don’t purposefully low-ball). This will provide negotiation room for a counter offer from the seller and hopefully you can both reach an agreement you are both happy with.
6. Get It in Writing
Once you reach an agreed sales price on the business for sale, you should consult a lawyer to draw up a contract to complete the transaction. For a novice creating a sales agreement, for buying a business, on your own or in tandem with the seller can easily get messy. Hiring an attorney to create a comprehensive purchase and sale of business agreement will protect both parties business interests and keep things civil.
Ultimately, when you’re ready to proceed with buying an existing business, never take anything for granted. Do as much research as you can, because if there is one “red flag” there are probably more. While buying a business is less risky than launching a startup there are still plenty of risks. Make sure you understand them all.
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Miles Hall is a business freelance writer that frequently reports on issues concerning the business world, such as businesses for sale, franchise opportunities, business brokers and how to buy and sell businesses.
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