There will likely come a point in time when you consider selling your MSP company. Even if you do not intend to sell, negotiating like a pro when a suitor emerges can spur quite the impressive offer. Let’s take a quick look at techniques that will help you get the most for your business.
Establish a Walk-Away Figure Prior to Negotiating
Do not begin negotiating until you have a good idea of what your MSP company is really worth. Establish your walk-away number before talking with prospective buyers. Do not settle on any old number just because it seems lofty. Spend time researching the market and similar company sales to ensure your walk-away number is reflective of the market, as well as your sweat equity.
Recognize Price is Not the Be-All, End-all
The business’s sale price is certainly important, yet a small difference in offers should not be an automatic deal-breaker. The terms of the deal are extremely important. Consider factors such as earnouts, structured payouts, the fate of the employees, and so on.
Know Your Numbers and the Market
Do your homework. Do not start negotiating until you are completely confident in your numbers as well as the state of the market. Informed sellers make prudent deals and are that much less likely to be taken advantage of.
It Might Be Prudent to Make the Initial Offer
Even though you are selling, you might find it makes sense to float out the first offer. This offer will serve as the foundation for subsequent negotiations. However, if you do not have an information edge on the prospective buyer, making the first offer might not be wise.
Entertain the Idea of Making Strategic Concessions
Certain concessions are beneficial in negotiations since they have the potential to result in reciprocation from the other party. The seller might be willing to give up something of value if you are willing to make a concession of note. So, don’t rule out concessions. Discuss concessions internally and consider whether making one or several will ameliorate negotiations.
Consider the Nuances of the Other Party
Get a gauge of the buyer’s interests and background. Understand the party you are going to negotiate with. Know their desires, tendencies and other idiosyncrasies. This knowledge will help you make the most of the negotiations and ultimately maximize the value of your company.
Keep Trying to Get the Deal Done
The shared aim of MSP company buyers and sellers is to get the deal done. Rely on the advice set forth above, and the deal will prove mutually beneficial for both parties. However, there are some situations in which it makes sense to walk away from negotiations. If you feel uncomfortable with the proposed terms, do not hesitate to take some time to think about a prospective deal while away from the negotiating table.
