Is the MeSoRe applicable to the sale of one’s business?

1° What is BeAlSo?

The Be Al So, you have probably heard of it: “Best Alternative Solution” also called “Best Fallback Solution” or its acronym BEALNE “Best Alternative To a Negotiated Agreement). This method, written and detailed in the 80’s by Roger Fisher and William Ury, has existed since the dawn of time. This method consists in preparing the outcome of a failed negotiation or in planning an acceptable exit for both parties.

This tool is presented in textbooks as an effective way to succeed in negotiation, especially – and this is where it was proposed – when “the other side is more powerful”: “A negotiator who has a BEALSO,” write Fisher and Ury in How to Negotiate Successfully (1982), a translation of their best-selling book Getting to Yes (1981), “is therefore better able not only to determine the minimum agreement he can accept, but also to obtain it. Seeking his MEASURE is certainly the most effective course of action he can take when confronting a seemingly more powerful negotiator.

2° The transfer of position

In any classic negotiation, the position of power changes instantly from one party to the other when the order, agreement or contract is signed. Until the signature, the buyer knows the price he is willing to pay to commit himself, he knows the price he is able to accept, the seller is dependent on his decision. It is the customer who, at a given moment, will accept the seller’s offer or will impose conditions that the seller will accept (or not). The seller is ready to commit to his offer from the beginning of the negotiations, since he is usually the one who wrote it. He therefore expects to receive demands from the buyer, such as: Price reduction, payment terms, manufacturing or delivery times, warranty and after-sales management etc.
In this case, the seller can rely on a BeAlSo that he will have prepared beforehand. The balance of power is reversed as soon as the signature is effective. As soon as the contract is signed, the seller is no longer in a state of uncertainty and now knows the conditions that have been agreed. In general, they are within the limits he had set himself. The uncertainty changes sides at this precise moment, because the buyer does not know if he could have paid less, obtained more services, if he went to the maximum of the possibilities of negotiation.

3° What about the sale of a business?

Selling your business is a little different, it is unique, even if the customer can find similar ones, you must remain his favorite target. While it is true that it is not always easy to find buyers, once one or more players are interested in the business there is a strengthening of the seller’s position. There is only one company to sell, while several buyers are potentially interested. The BeAlSo of each of them are then divergent. The seller must be able to determine precisely the conditions he would be ready to accept and be able to fall back on a second target as soon as the main target is considered to be failing. This is why a meticulous preparation is essential in terms of valuation as well as in terms of strategy. The BeAlSo will be built with the support of the advisor chosen for this sale.

In the case of the buyer, it will be necessary for him to fall back on several targets, although in general this situation is more difficult to apprehend for the buyer than for the seller, if he is well accompanied.

Pierre-Christophe PROT
Actoria Conseil