By Gal Barzilay / COO
Selling an eCommerce business is a complex journey, marked by its own set of challenges. As a seller, your goal is to secure a favorable deal while navigating potential hurdles. In this article, we will delve into common challenges sellers face during negotiations with buyers and provide strategies for effective management. To illustrate these strategies, we will use Sara and Michal as examples.
1. Price Disagreement
Challenge: Differing valuations between seller and buyer.
Strategy: Collaborative mindset and data-driven approach.
Example: Sara aimed to sell her Amazon baby product business for $900,000, but Michael's offer was $750,000. They jointly analyzed industry trends and finances.
Factoring growth and expenses, they agreed at $825,000, blending their initial positions and market insights. Their cooperative, data-driven approach led to a successful resolution benefiting both of them.
2. Conflicting Terms
Challenge: Disagreements arise over deal terms.
Strategy: Clear communication and balanced terms.
Example: By pooling their insights and analyzing growth, expenses, and competitors, they settled on a price of $825,000. They blended their initial positions with market data, using a collaborative approach that led to a successful resolution benefiting both parties.
3. Information Transparency
Challenge: Buyers require accurate data; sellers are cautious.
Strategy: Building trust through non-disclosure agreements (NDAs) and rapport. Example: They signed an NDA, ensuring confidentiality. Sara shared sensitive data, showing trust. Their rapport grew, the gap narrowed, and they settled at $825,000. The NDA built trust and transformed numbers into partnerships.
4. Emotional Attachments
Challenge: Sellers have emotional ties to the business.
Strategy: Acknowledging emotions and ensuring legacy.
Example: Michael recognized Sara's emotional attachment and pledged to preserve the business's essence. Utilizing non-disclosure agreements, Sara shared data securely, and Michael's commitment to maintaining the business's core identity paved the way for compromise.\
5. Post-Sale Transition
Challenge: Concerns about the business transition.
Strategy: Detailed transition plan.
Example: In the negotiation, Sara presented a focused transition plan. This plan emphasized joint cooperation for a smooth handover, covering vital operations and customer relationships. This practical approach showcased Sara's dedication to business continuity, effectively narrowing the gap and leading to an agreeable resolution.
Selling your business can be both a financial and emotional process, similar to the examples given by Michael and Sara. To prepare yourself, it is important to understand the use cases.
Through understanding, open dialogue, and strategic negotiation, sellers and buyers can successfully navigate these challenges to forge deals that are mutually beneficial.
Why did we build boosst?
It can be a very difficult process to buy or sell a business, both financially and emotionally. We built boosst so you would never feel alone in the process.
We believe that we can empower founders and give them insightful data in order to create their future according to their terms.
Looking to sell your business? Check out how boosst can help
Looking to buy a business? Check out how boosst can help
Book a free call with our M&A team lead here > Click here
About the Author
Gal Barzilay, Co-founder and COO of boosst. Gal is a former software engineer who has experience working with global banks and developing tech solutions for eCommerce brands such as Adidas, L'Oréal, and HP. She grew up with two parents who owned small businesses, when they wanted to retire, they couldn't find anyone to continue their companies.
Connect on Linkedin > here
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