Negotiation is a skillset that takes practice to develop. Many business leaders struggle to negotiate well, even after years of negotiating in their own business dealings. We've put together a few tips to help you negotiate better deals for buying a practice.
Focus on Closing
Before you even begin negotiations, it's important that you have your mind set on closing the deal. If you're just going into a negotiation to "see what you can get," with no real intent of coming to a fruitful resolution, then you are likely wasting everybody's time. If closing the deal isn't at the center of your vision, then you need to re-center yourself.
Know What You're Negotiating For
Too often we see would-be practice owners come to the negotiation table with an all-or-nothing attitude and little understanding of the practice itself. Sometimes these are people who make offers just to see who will cave to them. If you're serious about negotiating for a specific practice then you first need to research that practice well and know exactly what you're negotiating for. You also need to be clear on which items are must-haves versus which items you're willing to let go of. Not every battle is worth fighting, and part of the negotiation process is showing good will toward the seller by making some concessions.
Create a Paper Trail of Your Negotiations
Negotiations can be quick paced in some instances and you don't want to let something fall through the cracks. As you negotiate your way through the deal, make sure that you are taking notes and following up with the other party through emails. This protects you and ensures that there is legal clarity about what was negotiated. In addition, overzealous buyers sometimes find themselves negotiating with parties who are not authorized to make final decisions about the sale. Make sure you are noting within whom you spoke and what their concessions were.
The seller has worked hard to build their practice. Negotiations can take a toll on them, especially if there are extenuating circumstances forcing the sale. The best thing you can do is be gracious and show patience. You don't want to take over a practice where you've become the villain because the staff will likely have heard a thing or two about you by the time you arrive.
Negotiating for a practice is an important part of getting a good deal and protecting your interests, but it has to be done with a positive end in mind. You should never go into negotiations with the intent of locking on a position and refusing to budge. Keep an open mind and know where you can afford to make some concessions.