Buying a Liquor Store? Negotiate Your Way to a Great Deal
By Richard Parker: President of The Resource Center for Buying a Liquor Store™ and author of How To Buy A Good Liquor Store At A Great Price© .
When it comes to buying a business for sale, the most exciting and anxious moments can be experienced when the time arrives for you to enter into negotiations and make an offer. This part of the process completely handcuffs some individuals.
But there is no need for that to happen. Just like every other aspect to the buying process, your preparation will determine your level of success.
Let me share some of the great negotiating secrets I have discovered. Use them when you are negotiating your purchase of a liquor store – and you are all but guaranteed to come out with a winning deal.
Find Their "Pain," Soothe It . . . and YOU Win!
Everybody has their "hot buttons" in a deal. These are the points that, in the mind of the seller, will make or break the deal. Once you identify them and can find a way to ease their concerns, you’ll win. It works all the time.
As an example, if the seller wants to be certain that they walk away from the deal with a specific amount of money in their pocket after broker commissions, paying debt, etc., then the down payment amount of the deal is clearly their “hot button.”
There Are Two Ways To Determine The Seller's Hot Buttons
- Put in an offer and see where and how the seller counters.
- Ask pointedly: “What’s more important to you, the down payment amount or the purchase price?”
The first of these methods is usually more effective, because it allows you to read a variety of issues once you see the structure of a counter-offer. However, method two - asking directly - is a very accurate way to measure this as well.
Play "What If" - another highly successful deal-structuring approach
Lay out the various points, giving consideration to what the short-term and long-term impact will be of your decision. As an example, if you negotiate finance terms with the seller with one lump-sum payment down the road (i.e. a "balloon payment") you must also consider that the business MUST be able to make that payment at that time.
What if there’s a cash crunch? What if you’d like to use the funds for something else at that time? What if you want to balance that with a straight-line finance program so that you’ll know what your obligations are every month and you can budget accordingly. Every situation is different, but again, consider the impact for today and down the road.
And Remember . . .
When buying a liquor store – as when buying anything else – remember that great negotiators are not born - they evolve! Your effectiveness will increase over time. Be creative. Be reasonable. Keep the end result of putting a good deal together in your mind. Don’t lose patience. Don’t be confrontational. If there is tough news to deliver, let your broker do it. After all, you will need the seller to provide you with training and other considerations.
Learn from each experience. Understand that there will be setbacks. Work though each of them! You cannot win every point. It’s a give-and-take.
Prioritize. Prepare. Win/win is not realistic. The objective is clear: you win and the seller is reasonably happy!
To learn more success secrets of top-performing liquor stores, be sure to order our guide, How to Buy a Good Liquor Store at a Great Price.
This article represents a fraction of what you’ll learn in How To Buy A Good Liquor Store At A Great Price© - the most widely used reference resource and strategy guide for anyone thinking about buying a liquor store. Read a detailed listing of what you'll learn.