Getting the Best Deal Means Putting Others First
If you think you’re in the driver’s seat and buyers are the passengers, think again
Negotiating is tricky.
It’s a skill that’s learned through practice.
A key to effective negotiation is putting the other person first. Be aware of your emotions and your own biases, and think of the situation from the other person’s perspective.
When we’re selling our online business, our pride and joy, it’s easy to be emotionally attached to it. This is both a blessing and a curse.
It’s a blessing in the sense that it has driven you to build a fantastic business. However, it’s a curse in that being too emotionally caught up in your business can be detrimental to negotiations.
Feeling like your business is the best thing in the world and being stuck on the idea of its potential can make you stubborn, which is not good for negotiations.
This is why many sellers approach the table with a combative mindset and lose out on the best deal because they’re not willing to work with the buyer, who has their own ideas and reasoning.
There are a couple of rules you can follow to help you overcome this cognitive bias and get you the best possible deal for your online business.
Rule #1 — Take a Step Back and Breathe
Both you and the buyer want the best deal, right?
That doesn’t mean the highest sales price for you and the lowest sales price for the buyer.
If you have a business making $10,000 a month, you’re not going to sell it for $10,000,000. It’s just not going to happen.
That’s why you have to be realistic and have a deep understanding of what your business is truly worth, not what you want or think it to be worth. Or, for that matter, what the buyer wants it to be worth.
Your business value is based on numerous factors, mainly its age, profitability, and assets.
Unfortunately, the amount of time and effort you’ve invested into your business and how much potential you think it has are not factors that affect your business value, because you can’t put a monetary value on subjective metrics.
When you understand this, you will start to understand that even though a buyer might be asking for a price lower than what you initially expected, they aren’t your rival. They have reasons for offering what they do, and if you listen to them, you might agree.
Rule #2 — Learn How to Work the Crowd
Now that you understand the cognitive biases that can affect sellers, you can start to focus on selling.
Don’t forget, as a business owner you are a marketer and a salesperson — use those skills to your advantage.
You know how your product or service solves a problem or satisfies a desire for your customers? Your business will be the same for buyers.
Get to know what buyers want, such as a business that’s earning steadily, a specific business model that’s within their skill set, and opportunities in place for growth, among other things. Know these factors and outline how your business satisfies these criteria.
There are some general criteria that most buyers have, like the ones listed above, but if you have a particularly unique business, you might want to hone in on a specific type of buyer.
We’ve found there are six main types of online business buyers:
- Newbie Norm — new to online business investing and looking for a small, simple business.
- DIY Dave — looking for a “fixer upper” that’s within their skill set.
- Flipper Fred — also looking for a “fixer upper” with the aim of reselling for an ROI.
- Strategic Sally — runs multiple businesses and wants to leverage a specific new business to grow the others.
- Portfolio Paul — has an investment portfolio of businesses and wants to diversify their investments.
- Investor Ivan — a large capital buyer who has operators to run their businesses.
Out of these buyer personas, which one do you think would be most interested in your business?
If you have an idea, check out the article above to understand their needs more.
When you know how your business solves a problem or satisfies a desire for a buyer, you can use that in your business ad through copywriting and in sales negotiations to close the deal.
Your business history will have some selling points. Maybe you’ve received interest from wholesalers who’d like to sell your product. Maybe content from your site has been featured in the media. Maybe you experienced a stockout one month and lost sales — even this is a selling point. A buyer with good stock management skills could quickly increase profits with your business by organizing your stock — this would be a DIY Dave-focused selling point.
Your business assets are also selling points. For example, your standard operating procedures (SOPs), employee contracts, trademarks, etc. all affect your business value.
It is important to note, however, that creating multiple social media accounts right before you try to sell is not something that will increase your business value. Yes, we have had many sellers try this.
When the Cards Are On the Table
A simple shift in mindset helps negotiations go so much smoother.
Again, it is a skill you learn through practice. If you undersell your business and you’re too lenient, then you won’t get the price you’re looking for. If you’re on the other end of the spectrum and you’re unreasonable and stubborn, then you also won’t get the price you’re looking for.
As with most things in life, it’s about balance.
So, how do you find this balance?
First, understand what your business is realistically worth by looking at its assets, history, profitability, and other tangible factors, while detaching yourself emotionally. This tells you what you want from the sale — don’t forget to have a bit of leeway with this figure for negotiations.
Second, understand what the buyer wants and how your business gives them exactly that. This will help you sell your business better in negotiations and on any promotional materials you create for your business.
The goal of the business sale should be a win-win situation. You want the buyer to succeed with your business, not just because you will want to see “your baby” do well, but because it opens up opportunities for you to sell other businesses in the future. It helps build your reputation as a good entrepreneur.
In the future, you might even want to be an operator who runs businesses for Investor Ivan’s — who knows?
Either way, a happy buyer is a lot easier to deal with than one who has walked away unhappy from the deal.
Experienced buyers also share this mindset of wanting a win-win situation, and they can be your best customers.
Where Should You Sell?
You really have two options to sell your online business:
- Go private
- Go through a broker
When you go the private route, you do everything yourself: promoting your business on marketplaces and online communities, finding buyers, preparing your business for sale, arranging and handling negotiations, acquiring the funds, and migrating your business over to the buyer, along with other smaller tasks that take time and experience.
When you use a broker, while you do pay a commission fee on your sale, in return, you hand over most of the abovementioned jobs to the broker. With Empire Flippers, you hand over all of those tasks to us, and we handle all the aspects of online business deals.
Working with a broker who has a trusted buyer pool makes it easier and faster for you to find the right buyer and get your business sold.
If you feel that using a broker could be the best way to sell your online business, then we welcome you to submit your site for sale on our website. If not, we hope this article helps you in your business sale.
