First-time buyers should secure 'lower price' during sales negotiations
Amateur negotiators may aim to secure a deal at any cost
First-time buyers should aim to secure a cut-price deal during sales negotiations, it has been claimed.
Although it may appear obvious for many experienced negotiators to try and lower the asking price, amateur staff may solely focus on purchasing their desired asset at any cost.
Susan Schreter, a university lecturer in entrepreneurship, wrote on MSN Money: "First-time buyers want to own a business so much that they skip the tire-kicking process [called due diligence] and never challenge the seller's purchase price.
"They assume that they can fix nagging issues after closing the transaction without thinking about the mounting costs. This is how successful business buyers become unsuccessful business owners."
Ms Schreter advised companies to research the future earning performance of their desired company, as sellers may often inflate their own projections of the firm's potential.
First-time buyers should also challenge the value of an inventory and mention any potential problems which could lower the cost of the deal, she added.