This article was originally published in the GrowthBusiness M&A Guide.

The M&A Guide is aimed at entrepreneurs and owners of growth companies, summarising the state of play of the dealmaking landscape and the various elements of the ecosystem over the past year. The aim is to help business owners understand whether a merger, acquisition, sale, or going public is right for their business, and the types of advisers and expertise they may require along the way.

Get prepared

No matter how experienced you may be as a business person, nothing that has gone before will have prepared you for the huge emotional stresses and strains of negotiating the sale of your business.

We all know how attached we can get to the businesses we create and build. They’re like our babies. We want only the best for them. But at the same time, we also want to ensure that we achieve the maximum value from them once we decide to sell.

Understanding the process

The selling process can be an exciting one, but it is also time consuming. Whilst you may want to be directly involved in all the meetings with the prospective purchasers and their advisers, it’s important to remember that you still have a business to run. It is not unknown for the price to be forced down towards the end of protracted negotiations because business performance has suffered. Your corporate finance advisers should be able to handle a lot of the nitty-gritty while you ensure the business is still operating efficiently.

When you do get involved in the negotiations, don’t be flattered by the attention given by prospective buyers. They are not there for your benefit. Be objective, especially if they start enthusing about how good your company is.

Be open and honest. Identify any potential issues upfront and confront them head-on. The due diligence exercise will reveal any areas of concern so it’s best to get them on the table from the beginning.

Price obviously plays a key part in the negotiations. But it’s not the only one. Other factors have to be taken into consideration such as the structure of the deal and when and how payments are to be made. Is there to be an earnout? And what plans does the purchaser have for senior managers and other employees?

Many buyers will want a business owner to stay on to help the transition after a sale. There are often sound operational reasons for this. But you will need to agree the timescale and when the break will come. You will no longer have control of events and it may be demoralising to see a company you have grown being taken in a different direction under new ownership.

Ask the potential purchaser to produce evidence of funding at an early stage of the negotiations. This will help ensure that you’re not dealing with time wasters. Offering a ‘lock-out’ (exclusive negotiations and access to information for a limited period) will also do this.

The art of negotiation

Any negotiation is a two-way street, so it may be necessary to make some concessions. Make sure, though, that this is recognised by the other party and that you might expect the favour to be returned further down the line.

Consider what buyers are trying to achieve. They want to buy and you want to sell, subject to price et cetera. Try to research the buyer’s specific needs. A buyer looking for a brand name may be persuaded to take on more debt. One looking for a profit stream may not wish to acquire non-core assets. The better informed you are, the less likely you are to be taken advantage of.

Early on, you should have decided what you want from any potential deal and the type of buyer that may be prepared to pay a premium price. You’ll have also settled on the minimum that you are prepared to accept. So if the prospective purchaser you are dealing with is not offering the deal you want, and never looks like doing so, be prepared to walk away. Sometimes this ploy can be used for dramatic effect, but if a deal cannot be agreed within your required terms, let this be known clearly and unemotionally.

If someone makes an offer which doesn’t meet your asking price, reiterate your requirements and politely point out where their offer falls short. Purchasers may come back with a better offer, but they will only do so if they think they can do business with you in a sensible manner. It may be best to pass the really detailed parts of the negotiation to your professional advisers with clear instructions as to the desired outcome. This will avoid you being seen as difficult or getting too emotionally involved.

In Summary

The five key steps to a successful negotiation are:

1. Invite an offer, rather than name a price.
2. Respond to the offer carefully as it might not be all about cash. You need to understand the full terms.
3. Ensure that a potential buyer has the funds and will fit in with your timetable before investing more time.
4. Meet face to face to agree a final acceptable offer and shake hands on it in order to give you the moral high ground if the buyer attempts to make changes before the deal is completed.
5. Don’t try to change the deal. Deliver what you have committed to.

Most people only get to sell a business – often their most valuable asset – once in their lives. So it pays to get it right.

Nik Askaroff is the CEO of EMC Corporate Finance.

The M&A Guide 2017 is supported by Clydesdale & Yorkshire Bank, EMC, Kingston Smith, Knight Corporate Finance, and Squire Patton Boggs.