05 Dec Negotiate with Just One Buyer (If You’re Nuts)
There is no possible way in the world to get the best deal by courting and negotiating with just a single buyer.
Need I say again?
You will not get the highest and best price if you deal with just one buyer.
Even if your buyer is the very best and most capable buyer, the only way to coax every nickel out of ’em is to make them fear that their biggest competitor will outbid. And the only way to put that fear in them with credibility is to actually play their biggest competitor against them (subtly).
And what if you’re wrong about who is your best buyer? Judging a buyer’s capability and motivation is an imperfect science. It’s subjective. The only way to know, in FACT, if a particular buyer is the best is to talk to ALL the buyers. You might find out – to your benefit – that you were wrong.
Don’t be fooled. The number of buyer candidates for healthy and profitable businesses is substantial. Not as many as stars in the sky, but close. Individual buyers (thousands), industry buyers (many), and private equity groups (hundreds). The work required to identify them all, contact them all, cull through them, and bring the top five or ten to the table is considerable – but it can be done.
Sure, it’s too much for the business owner himself or herself to do, but all you need to do is find a skilled and experienced M&A advisor and entice him or her with a sizeable success fee that gives incentive for higher prices. Sure, you’ll have to pay the success fee, but it’ll be a drop in the bucket relative to the value he’ll add.*
*assuming you don’t choose one of the seminar-based, up-front,fee-loaded M&A advisor scams.