\n\t\tOpinions expressed by Entrepreneur contributors are their own.\t<\/p>\n
You did it. You turned that wild, half-impossible idea into an actual company. You survived the chaos, the bad coffee, the endless nights and the times when quitting looked easier. And now, someone wants to buy it. Big moment. Selling your first business<\/a> isn\u2019t just another transaction \u2014 it\u2019s probably the biggest financial deal you\u2019ll ever make. It\u2019s thrilling, but also quietly dangerous. Many first-time founders walk away thinking they did great, when in reality, they left a few million sitting on the table.<\/p>\n If you ask me, selling is not luck. It\u2019s a negotiation<\/a> game. And the buyer likely does this often \u2014 they know the playbook. So, you need yours too. Use my five negotiation secrets, and you\u2019ll walk away with profit in your hands.<\/p>\n Before you discuss price, you must know your BATNA<\/a> and WATNA. But what are these?<\/p>\n BATNA stands for B<\/b>est A<\/b>lternative T<\/b>o a N<\/b>egotiated A<\/b>greement.<\/p>\n WATNA is the W<\/b>orst A<\/b>lternative T<\/b>o a N<\/b>egotiated A<\/b>greement. These are your safety net and your worst-case scenario.<\/p>\n Your BATNA is your plan B. If this deal falls apart, what will you do? Maybe you have a second-best buyer waiting. Maybe you\u2019ll keep running the business for another year to boost revenue. Having this gives you power. If you know you have a solid Plan B, you won\u2019t accept a bad offer and, of course, stay confident.<\/p>\n Your WATNA is the worst outcome you can live with. It\u2019s your absolute \u201cwalk-away\u201d number and terms. You should never, ever accept a deal worse than your WATNA. Knowing these two points is like having a map in a dark forest. It tells you where you can go and where you absolutely cannot. Do the research well and talk clearly to your advisors.<\/p>\n The first number mentioned in a negotiation acts like an anchor, because every other price discussed will be compared to it. This is a psychological trick. You, the seller<\/a>, should almost always drop the first number. Why? You want to set the anchor. You want that first, high price to be the starting point in the buyer\u2019s mind.<\/p>\n Don\u2019t be afraid to be ambitious. Throw down a strong, high number. But keep in mind, it needs to be reasonable. An outrageously high number makes you look unserious. But a well-justified high anchor gives you room to negotiate down, for sure. When you present your price, back it up with a clear, compelling story.<\/p>\n Don\u2019t just say, \u201cThe price is $X million.\u201d<\/p>\n Say, \u201cBased on our 30% growth forecast, our repeat customer rate and our IP position, the valuation is $8 million.\u201d<\/p>\n If you use a POS (Point of Sale) software for your retail business, you have a goldmine of data. Don\u2019t rely on tax returns only. Use your POS reports \u2014 the ones showing daily sales, inventory turnover, customer purchase habits and even employee performance \u2014 to back up your financial claims.<\/p>\n Here, you are not just naming a price. You are detailing the value. This makes your high number feel solid. Now the entire discussion is in your favor right from the start.<\/p>\n First-time sellers obsess over the total price. That\u2019s a mistake. The deal structure is often where millions are gained or lost. Remember, the buyer is trying to minimize risk. You should think about more than just cash up front.<\/p>\n Look at things like:<\/p>\n You can often win big concessions on these terms without changing the headline price. Be flexible on the structure, but make sure you stay strategic about the risk. A slightly lower price with cleaner terms can be worth much more than a high price with massive risk.<\/p>\n Every time the buyer asks for a discount, an extra term or a longer indemnity period, you must ask for something in return.<\/p>\n Think of it like this: \u201cI can agree to lower the price by $100,000 if<\/i> you agree to a 30-day closing period instead of 60 days.\u201d<\/p>\n This is a contingent concession. Your agreement is contingent upon their movement. It protects your value. It shows the buyer you are a serious negotiator. You\u2019re not being difficult \u2014 just being fair. You just created a win-win situation, congrats!<\/p>\n Selling your first company is personal. It\u2019s your baby. The buyer knows this well. Which is why they will use your emotional attachment against you. They might criticize the business. Your job is to stay cool. My best tip for today will be to check your ego and emotions at the door. You should know that this is a business transaction, nothing else.<\/p>\n If a buyer makes an aggressive offer<\/a> or a harsh comment, your best tactic is often silence. Don\u2019t jump to defend or accept. Let the uncomfortable silence hang in the air. People hate silence. Often, the buyer will rush to fill the void. They might lower their price or give away a crucial piece of information. Silence is a powerful negotiating tool.<\/p>\n Also, never forget the power of the team. You should have an attorney and an M&A advisor. When the buyer pushes hard, you can use your team as a shield.<\/p>\n Say, \u201cThat\u2019s an interesting point, but I need to consult with my tax advisor on the implications of that term.\u201d This gives you time to think clearly. It shows you have a professional, objective process and that you are a strategic player.<\/p>\n Following these secrets won\u2019t just get the deal done \u2014 they will help you close a deal that truly reflects your incredible success. You earned those millions. Now go get them!<\/p>\n Sign up for How Success Happens and learn from well-known business leaders and celebrities, uncovering the shifts, strategies and lessons that powered their rise. Get it in your inbox.<\/a><\/i><\/p>\n<\/p><\/div>\n1. Do your homework: Know your BATNA and WATNA<\/h2>\n
2. Anchor high and justify your number<\/h2>\n
3. The price isn\u2019t everything: Negotiate the structure<\/h2>\n
\n
4. Trade, don\u2019t give in \u2014 use contingent concessions<\/h2>\n
5. Manage your emotions and use silence as power<\/h2>\n