A
myth often believed by sellers is that if they set their price high, they can
always drop it. When a buyer sees a
seller come off their price, they often view it as a sign of weakness and
leverage it to get an upper hand in the negotiating process.
Also,
think of personal shopping experiences.
Have you noticed how products that have been sitting on the shelf get
ratty, dusty and no longer look appealing?
The same thing can happen with a business that has been on the market
for a lengthy period of time.
Conversely,
buyers need to understand that making a “low ball” offer with the belief that
they can always go up may not be the best negotiating strategy. Although this strategy may be partially true,
buyers need to think of the “cost” associated with this strategy.
Making
such an offer can create hard feelings and resentment with the seller while
eroding the credibility of the buyer.
Since there are many similarities between a business transaction and a
marriage, resentment is not a recommended first step in any type of courtship.
When
it comes to negotiating, buyers and sellers need to focus on the issues that
are important to them rather than details that are not critical.
When
both the seller and buyer focus on the issues at hand and stay away from myths,
common ground can usually be found that gets both parties what they want.
Do you have small
business questions you would like answered about this article or others? Please visit www.VRWindsor.com
or call 519-903-7807.
William Sivell is a
sales representative of VR Windsor Inc., Business Brokerage; his blog appears
every Tuesday.
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