Preparing for and Overcoming Objections in a Business Sale
When selling your business, few outcomes are more frustrating than when a buyer you connect with decides that they don’t want to proceed. Maybe they feel your price is too high or that it’s not the right time to buy.
You might not always be able to help a potential buyer overcome an objection, but it’s always wise to be prepared. Here are some tips for negotiating with buyers when they’re about to back out.
Identifying Potential Objections & Responses
If a buyer isn’t feeling sure about a sale, they may raise just about anything as an objection. These are some common ones.
The Price Is Too High
Some buyers who raise this objection genuinely can’t afford to pay what you’re asking. However, others simply use it as a tactic to get you to drop the price. While there is always the option of discounting your asking price, the best way to respond to this objection — at least initially — is by emphasizing the value of your business.
To best prepare for this objection, you must know the true value of your company. You can obtain a quick, free business valuation with our online calculator. But when you work with a business broker, you’ll be able to get a much more precise valuation.
The Terms of the Sale Aren’t Favorable
Business sales are almost always complex, so it’s highly likely that a buyer will object to at least some terms of your sale. Always have a strong sense of where you’re willing to compromise and where you aren’t. Don’t be afraid to walk away from the deal if the buyer’s demands are unreasonable.
They’re Concerned About ROI
Sometimes, a buyer might be worried that they won’t see a reasonable return on investment. This is where having a deep knowledge of your company’s finances is critically important. When you can clearly illustrate how the buyer will recoup their investment and continue to profit, they’ll be more likely to want to buy.
Building Buyer Trust
While it’s important to be able to anticipate objections when you’re selling your business, it’s also essential that you build a rapport with your potential buyers. When a buyer feels like you’re trustworthy, they’ll be much more likely to listen to what you have to say.
Any time a buyer is willing to listen and engage with you, you have a better chance of convincing them to buy. So how do you build trust with buyers? One of the most important strategies is also a simple one: listen.
When a buyer raises an objection, don’t rush to counter it. Instead, ask questions and make an effort to put yourself in their shoes. When you demonstrate genuine care for a buyer’s concerns — and not just a desire to make a sale — your buyer will see you as someone with integrity.
Negotiation Strategies
Negotiating the sale of a business is an art form. And while specific strategies may work better than others in different situations, these are some general tactics to keep in mind:
- Be able to explain your company’s advantages over competitors
- Know your company’s value
- Take the time to understand your buyers
- Be willing to compromise
While you can negotiate yourself, it’s often wise to work with a business broker. Brokers are professional negotiators, and they can structure a deal that meets the buyer’s needs while still delivering you a great profit.
Need Help Selling Your Business?
At Sunbelt Business Brokers, we’re dedicated to helping business owners like you find the right buyers. We focus exclusively on small and medium businesses. And because we maintain a network of interested buyers, we’re uniquely equipped to help you secure an efficient sale. Contact us today if you have questions or if you’re ready to sell.
