I am in NYC and the buyer is in SF. I would like to sell for $35K but was offered $15K. What should I expect as a next step? Should I be prepared to walk away?
The key to negotiation is understanding what the other party wants. What aspect of the business are they interested in? Are they going to run the business in the same manner you did or are they just after the brand/trademark, domain, list of users/emails, underlying software platform, etc?
If you truly walked away from the business, then it's tough to have negotiating leverage, however you can afford to be creative, such as taking $15k in cash and then 3% of gross sales over the next 18 months.
The other often overlooked aspects of selling a business:
- legal fees (can easily consume the sale price in your case) and the cost incurred by the seller in transferring the assets.
- unless the effort is negligible (and it almost never is), a consulting agreement should be in effect to compensate for the time spent transferring assets / knowledge to the new owner.
- tax ramifications can be significant depending on how the transaction is structured; consultant an accountant and since it's December, consider delaying the close until January unless all the tax implications are fully understood.
Answered 10 years ago
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