Joe Valley has built, bought, and sold over a half-dozen of his own companies. After selling his last eCommerce business, he joined the company that sold it—Quiet Light. Then Joe became a partner in the company. Since he’s joined, he’s personally sold $100 million in total transactions. Joe has seen deals fall apart—and other deals exceed all expectations—because of how people behave. What’s the secret to winning a deal when you aren’t the best offer? Joe shares his surprising secret in this episode of Negotiations Ninja.
Outline of This Episode
- [1:51] Learn more about Joe Valley
- [3:35] Don’t be an A–hole
- [8:45] Hone in on the seller’s interests
- [14:09] Should you negotiate with your advisor?
- [19:53] Common structures that exist when selling a business
- [25:34] Where Joe commonly sees earnouts
- [26:52] How to connect with and learn from Joe Valley
Don’t be an A–hole
In the last 12 months, Joe has seen an average of 4.4 offers on every listing on Quiet Light. Some listings see as many as 12–13 offers. That means you do need to differentiate yourself as a buyer. But it doesn’t mean you have to come in all-cash.
How do you negotiate and win over people who bring all cash to the table? What’s the secret to winning those deals? Joe believes the answer is simple: Don’t be an A–hole. The same applies to the person selling the business. No one wants to buy from an A–hole. Why?
Because that business is probably built on a house of cards and may collapse on you. You want to buy from someone you trust. Buy from someone who made a great business for a great buyer to take over at a great price. If you do that, someone will be willing to pay more for your business. You’ll be able to negotiate politely and professionally—with the facts—and win.
The qualities it takes to win
A guy named Matt has bought 5 businesses through Quiet Light. There wasn’t a single time where he was the only offer. He was never the highest offer. Yet every single time, he won the transaction. Why? Because he was likable and complementary. He did his research to understand the business so he could have an intelligent conversation with a like-minded entrepreneur.
Matt is truthful, honest, and full of integrity. He shares his plan for the business(es) that he wants to purchase. Why is that so moving? In many cases, the entrepreneur selling a business is loyal to their team. They want to sell the business to someone who will take the team with them and grow the business. Someone like Matt will buy the business and follow through on what he says he will do.
Joe’s expertise: managing emotions
Joe emphasizes that the difference between a good advisor and a great advisor is that a great advisor understands the sellers’ and buyers’ emotions. Joe manages people’s emotions and expectations through the entire process.
When you list your business, you have one mindset. When you start to get offers, your mindset shifts. When you’re two weeks away from closing, it shifts again. At the end, your mind is likely in a panic. Your emotions are running high. As you get to the point where you’re getting offers and talking to buyers, you’re getting emotional.
People choose the best buyer over more cash or the best price because emotions come into play. You’re selling your greatest asset. It will make a dramatic impact on your present and your financial future. You have to choose the right buyer so you make it from the letter of intent phase through the final closing. That means you won’t always choose the person with the most money or incentives. Emotions drive people through the process. That’s why, if you’re not an A–hole., you have a leg up over the guy full of cash.
Resources & People Mentioned
Connect with Joe Valley
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