Navigating Unreasonable Seller Expectations: A Strategic Approach

April 04, 2024

by a searcher in Delaware, EE. UU.

Hello Searchfunder Family,

In the intricate dance of acquisition, one of the most common hurdles we face is navigating through the maze of unreasonable price expectations from sellers. It’s a scenario many of us encounter, yet it remains a nuanced art to master.

Drawing from my journey and the myriad of discussions we've had here, I've found that empathy, strategic communication, and thorough due diligence are key in aligning expectations. It's not merely about the numbers but understanding the seller's emotional investment and the legacy they're parting with.

Here’s a condensed strategy I’ve adopted:

Empathy First: Start conversations by acknowledging the seller's attachment and their business's value beyond just the financials.

Data-Driven Discussions: Present comprehensive market analyses and comparable sales to ground your negotiation in reality, not just opinion.

Win-Win Scenarios: Propose creative deal structures that offer value to the seller beyond the sale price, like earn-outs or continued involvement.

Engaging sellers with unreasonable expectations isn’t about convincing them to lower their price on the spot but about starting a conversation that can lead to mutual understanding and respect.

Have you encountered similar challenges? I’d love to hear your stories and strategies. Let’s continue to share our insights and grow together. For a deeper dive into navigating these negotiations, feel free to schedule a chat with me here: https://calendly.com/tonybellamy/1-1-meeting-with-tony-bellamy

Warm regards,

Tony Bellamy

P.S. Sometimes the unreasonable expectations are so outrageous that, after a couple of conversations, the best course of action is simply to leave the table and not choose another battle.

Reply by a professional
from University of Akron in Charlotte, NC, USA

For me, I think the term "Unreasonable Expectations" is part of the problem. I hear buyers complaining about this all the time. This thinking is a judgment mindset and will most likely block any deal from being made. In judgment, all is lost; however, in acceptance and respect anything can be accomplished. Value isn't a objective thing. It's a subjective thing made up of an array of variables.

Yet, it seems most buyers only approach the process and the seller from their own perspective without much room for anything else. When you approach a seller on their terms and see through their eyes, you are able to meet in a free space where you can build a relationship first and then try to figure out whether a deal can be made.

Again, value is just a subjective thing to each parties. If you can build that relationship first, many times you can craft a deal where both parties feel they receive the value they want. however, entering with the mindset that one side is unreasonable will most likely lead nowhere.

This is also why I suggest buyers use an intermediary who can facilitate the relationship building and deal making process. A good intermediary can be the good and bad cop whenever it is needed.

However, in the end, if expectations and value can't align, there is no need to continue since there are so many other deals to be made.

Reply by an intermediary
from City University of New York, Bernard M. Baruch College in San Francisco Bay Area, CA, USA

Tony, to a add on to my post, I am a seller of a $20 million dollar business. Entrepreneurs who built a business from scratch take pride on what they accomplished. They put blood, sweat, and tears. Selling is bitter sweet. All I say when looking at a business, let the buyer explain his asking price and show respect for his/her accomplishments. The price is one thing, but as a seller if someone was disrespectful or I felt they were the wrong person for the business, I wouldn't sell even if they paid double. Seller and buyer need some chemistry and price is just part of the reason to sell or buy

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