Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

How to Buy a BUSINESS on YOUR TERMS! #businessacquisition #negotiationstrategies

6 Jun 2024 · 1 min

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Mike Andes explains practical negotiation strategies for buying businesses, emphasizing two core levers: price and terms. He argues you can concede on price if you control the terms (for example, paying a higher nominal price but spreading payments over 15–20 years). He illustrates using an anecdote about an owner of Augusta Nation buying out another lawn-care business and exploiting the seller's urgent timing to negotiate price and payment structure to his advantage.

Chapters

I just got off the phone with an owner of Augusta Nation that's looking to buy out another lawn care business. When it comes to acquisitions and buying people out, there's two important things. One is price. Number two is terms. I'm willing to give up one of these things. If someone has a certain price in their mind and I'm buying them out, fine, I'll pay whatever you want. But the terms I'm going to control. For example, I might think a business is worth $200,000, and they want $500,000 to buy out their business. Great, I'll give you $500,000, but I'm going to pay you over the next 15 or 20 years and break the payments up. In this event, the owner that they were buying out really needed to move quickly. And so timing the terms was very important. And so I was talking to the owner of Augusta saying, look, now we can really negotiate pretty heavily on price because they need to move quickly in terms of the terms and the timing of the deal because they got to get out of town within the next several weeks. Now we can really take advantage on price.