By Devin Gianni
Negotiating the sale of your business pits you against buyers who often have more experience, resources, and professional assistance. When you’re ready to sell a small business, entering negotiations with the right tactics can transform you from the underdog to the power player. Sharp preparation and strategic moves level the playing field and maximise your returns.
Play hard to reach
Nothing weakens a seller faster than appearing eager. Buyers who sense your urgency will exploit it mercilessly. Create the impression that selling is an option you’re considering, not a necessity you’re pursuing. Maintain normal business operations throughout negotiations. Continue investing in growth initiatives and staff development. When buyers see the business thriving independently of the sale process, they recognise you won’t accept unfavourable terms out of desperation. Schedule meetings at times convenient for you, not just when buyers request them. This subtle dynamic establishes who holds the power in discussions. Occasional delayed responses to communications reinforce that the sale isn’t your sole focus.
Become the information gatekeeper
The flow of business information creates power dynamics in negotiations. Rather than responding reactively to buyer requests, develop a strategic disclosure plan.
- Create tiered information packages revealing progressively sensitive details as discussions advance
- Require formal expressions of interest before sharing basic financial information
- Demand signed letters of intent with earnest money before providing complete access
Information revealed too freely loses its negotiating value. Each significant disclosure should be exchanged for concrete commitments from buyers.
Fix weaknesses before they become discounts
Most businesses have operational or financial weaknesses buyers discover and use to negotiate price reductions. Addressing these proactively eliminates the ammunition that buyers typically use. Are sales concentrated among a few customers? Implement customer diversification initiatives before starting negotiations. Ageing equipment? Invest in critical upgrades that remove obvious negotiating leverage. Documentation gaps? Formalise processes and create operations manuals. These improvements cost far less than the discounts buyers demand for the same issues. Each weakness eliminated is negotiating leverage preserved.
Paint the future, sell the past
Negotiations focus heavily on historical performance, but business value stems primarily from future potential. Develop compelling narratives about growth opportunities that remain untapped. Make these opportunities concrete through documented market research, preliminary expansion plans, or product development roadmaps. When buyers can visualise specific growth pathways, they justify higher valuations internally. This approach works particularly well when selling to strategic buyers who can leverage your business in ways you cannot independently. Highlight synergies specific to each potential buyer.
Master the art of reciprocity
The psychological principle of reciprocity—feeling obligated to return favours—applies powerfully in negotiations. Make calculated concessions that cost you little but create psychological pressure on buyers to reciprocate. For example, accommodating timeline adjustments costs you nothing but creates a sense of obligation. Similarly, sharing particular insights about industry relationships builds goodwill that buyers feel compelled to match through financial terms. The most effective application occurs when buyers request changes to the deal structure. Rather than simply accepting or rejecting these requests, use them as opportunities to extract valuable concessions in return.
When executed correctly, these tactics transform what might have been a buyer-dominated process into one where you maintain control.
