Business Development of MSME through Acquisition & Takeover with Win -Win Negotiation skill and tactics. 4-9-2021. It has been centuries that Western countries have tried and tested successfully the inorganic route of growth through business acquisition and takeover. 

 

The phenomenon is new to Indian market where acquisition and takeover has picked up speed. The entrepreneurs have adopted this route of business growth. This has been possible after the economic liberalization policies of the Indian Government. Many business houses tried their hand on business development through acquisitions in Western countries. For example, TATA acquiring JAGUAR brand, Aditya Birla acquiring Novellas and Suzlon acquiring Wind Turbine manufacturing unit. Almost all these acquisitions have not been successful because of poor negotiation skill. The westerners who are all skilled and expert in business negotiations have sold the businesses at very high rates or with non-competition clause. The valuation of all the Indian companies acquiring the business have lost their valuation. We have learnt the lesson hard way and now the Indian businesses have focused their attention on the acquisition or takeover process. It is all about marketing stories of Negotiation services. (

https://marketingwonders.xyz/going-old-school-with-marketing/). 

 

 

 The takeover of business acquisition starts with due diligence of assets, legal propriety, valuation of the assets and business, preparation of negotiation strategy, deciding the skill required for negotiation and finding the experts for negotiation, completion and conclusion of the deal and finally preparing the well drafted agreement to avoid future litigations. The Suzlon deal is classic example of acquiring at high price and lack of non-competence clause let the seller free to start the same business in new company thus making the business takeover totally unsuccessful. 

 

If this is the case with large corporates like listed above, what will be the future of the MSME acquisitions. 

 

 First, there is no organized platform facilitating the information for the MSME units who wants to sell. So, even if there is an entrepreneur who wants to buy business do not find any seller and even if there is some seller of business, the chances of getting the deal through is very minimal. 

 

Second, Indian MSMEs was not in organized form and structure till now. Even today about 40% of the MSME organizations are either proprietorship or partnerships as per the old Partnership Act. There is no regulatory framework to monitor the financial and statutory information. So, the professionals who wants to do due diligence does not get the proper information. 

 

 Third, there is lack of professional talent who will provide the services to the buyer and seller. In western countries there are professional business brokers and business negotiators. This professional’s help negotiate the business skillfully in win-win situation.

(https://archikaarora.com/how-to-make-written-communication-work-for-you-instead-of-against-you/). The professional with a personality can get the deal you deserve. ) 

 

 

Fourth, there is lack of finance availability for such business acquisitions by MSMEs. The Indian banks and NBFCs do not focus on lending for such type of structured deals. 

 

 Fifth, there is huge opportunity for business sale and business purchase in this segment because of the nuclear family size. The only son in the family who has gone abroad for study does not want to return to India after studies. So, what will happen to the established business of the promoter who is in the retirement age or who is physically not fit for running it. I have seen many branded businesses in India facing closure or running at sub optimal capacity because of this problem. The problem is aggravated because of new generation going for hi tech new digital economy business away from traditional businesses. Till the time Negotiation profession develops or matures there is good scope for Negotiation freelancers.(https://komalsurana.com/freelancing-be-your-own-boss/). 

 

  Because of the above problems the Indian economy is losing good value of assets locked up in MSMEs in India. There is ocean of opportunities in this segment if finance and legal professional join hands and provide specialized services to this MSME businesses. Indian economy based on rural India is still dominated by the MSME sector.

 

 

 A big revolution is coming in the MSME business because of the disruption caused in the economy. Many traditional businesses are going out of gear. The most important part of the entire process is Negotiation. The negotiation is an art and science. Negotiation is an imperfect science. The most important part of negotiation is that the results are always unpredictable unless you sit on the table with clear objectives. The Win-Win negotiation is rather more relevant in business takeover and business acquisition deals. The Win win negotiation keeps long term in mind. 

 

 

 A win win negotiation may seem to be costly in the initial phase but over a period of time it proves to be more useful, productive and beneficial to all the stake holders. Our course on 100 Tactics and counter Tactics on Negotiation is very useful for the entrepreneurs in day-to-day business life and acquisition/takeover deals. The tactics may vary from product to product, from situation to situation and from party to party. 

 

 

 Chinese negotiators play cheap tactics while the Japanese use very shrewd tactics. Indians are emotionally easily manipulatable. Out of all the 100 tactics my favorite tactic is to remain silent and have patience. Silence tactic is considered to be goldmine. Patient listening to counterpart is much more revealing. Sometimes, these tactics seem to be contrary from one to one. But it is not so, as said previously, one tactic is true and prefect in one set of circumstances while the same may prove to be counterproductive. 

 

 

 For this reason, the skilled professional’s help is very important. Particularly, MSME entrepreneurs need them badly. In western countries many institutes have launched formal courses on Negotiation learning. Whatever academic or theoretical knowledge one may have, practice makes one perfect in negotiation. Subjective negotiation is also important with objective negotiation based on the commercials. For example, in an acquisition negotiation it is not compulsory to talk to Employees union and surrounding environmental & social activists. 

 

 

https://blog.our-area.com/ But taking them into confidence will help make the deal more successful. Business negotiation’s success depends more on detailed and professional drafting of the agreement. Arbitration clause in a Negotiation business agreement is very important to avoid long and tardy process of judicial system. Particularly in Indian market, the judicial system is very lethargic and takes lot of time for final outcome. This makes Negotiation skill more relevant.

 

 

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Business Development of MSME through Acquisition & Takeover with Win -Win Negotiation skill and tactics. 4-9-2021. It has been centuries that Western countries have tried and tested successfully the inorganic route of growth through business acquisition and takeover. 

 

The phenomenon is new to Indian market where acquisition and takeover has picked up speed. The entrepreneurs have adopted this route of business growth. This has been possible after the economic liberalization policies of the Indian Government. Many business houses tried their hand on business development through acquisitions in Western countries. For example, TATA acquiring JAGUAR brand, Aditya Birla acquiring Novellas and Suzlon acquiring Wind Turbine manufacturing unit. Almost all these acquisitions have not been successful because of poor negotiation skill. The westerners who are all skilled and expert in business negotiations have sold the businesses at very high rates or with non-competition clause. The valuation of all the Indian companies acquiring the business have lost their valuation. We have learnt the lesson hard way and now the Indian businesses have focused their attention on the acquisition or takeover process. It is all about marketing stories of Negotiation services. (

https://marketingwonders.xyz/going-old-school-with-marketing/). 

 

 

 The takeover of business acquisition starts with due diligence of assets, legal propriety, valuation of the assets and business, preparation of negotiation strategy, deciding the skill required for negotiation and finding the experts for negotiation, completion and conclusion of the deal and finally preparing the well drafted agreement to avoid future litigations. The Suzlon deal is classic example of acquiring at high price and lack of non-competence clause let the seller free to start the same business in new company thus making the business takeover totally unsuccessful. 

 

If this is the case with large corporates like listed above, what will be the future of the MSME acquisitions. 

 

 First, there is no organized platform facilitating the information for the MSME units who wants to sell. So, even if there is an entrepreneur who wants to buy business do not find any seller and even if there is some seller of business, the chances of getting the deal through is very minimal. 

 

Second, Indian MSMEs was not in organized form and structure till now. Even today about 40% of the MSME organizations are either proprietorship or partnerships as per the old Partnership Act. There is no regulatory framework to monitor the financial and statutory information. So, the professionals who wants to do due diligence does not get the proper information. 

 

 Third, there is lack of professional talent who will provide the services to the buyer and seller. In western countries there are professional business brokers and business negotiators. This professional’s help negotiate the business skillfully in win-win situation.

(https://archikaarora.com/how-to-make-written-communication-work-for-you-instead-of-against-you/). The professional with a personality can get the deal you deserve. ) 

 

 

Fourth, there is lack of finance availability for such business acquisitions by MSMEs. The Indian banks and NBFCs do not focus on lending for such type of structured deals. 

 

 Fifth, there is huge opportunity for business sale and business purchase in this segment because of the nuclear family size. The only son in the family who has gone abroad for study does not want to return to India after studies. So, what will happen to the established business of the promoter who is in the retirement age or who is physically not fit for running it. I have seen many branded businesses in India facing closure or running at sub optimal capacity because of this problem. The problem is aggravated because of new generation going for hi tech new digital economy business away from traditional businesses. Till the time Negotiation profession develops or matures there is good scope for Negotiation freelancers.(https://komalsurana.com/freelancing-be-your-own-boss/). 

 

  Because of the above problems the Indian economy is losing good value of assets locked up in MSMEs in India. There is ocean of opportunities in this segment if finance and legal professional join hands and provide specialized services to this MSME businesses. Indian economy based on rural India is still dominated by the MSME sector.

 

 

 A big revolution is coming in the MSME business because of the disruption caused in the economy. Many traditional businesses are going out of gear. The most important part of the entire process is Negotiation. The negotiation is an art and science. Negotiation is an imperfect science. The most important part of negotiation is that the results are always unpredictable unless you sit on the table with clear objectives. The Win-Win negotiation is rather more relevant in business takeover and business acquisition deals. The Win win negotiation keeps long term in mind. 

 

 

 A win win negotiation may seem to be costly in the initial phase but over a period of time it proves to be more useful, productive and beneficial to all the stake holders. Our course on 100 Tactics and counter Tactics on Negotiation is very useful for the entrepreneurs in day-to-day business life and acquisition/takeover deals. The tactics may vary from product to product, from situation to situation and from party to party. 

 

 

 Chinese negotiators play cheap tactics while the Japanese use very shrewd tactics. Indians are emotionally easily manipulatable. Out of all the 100 tactics my favorite tactic is to remain silent and have patience. Silence tactic is considered to be goldmine. Patient listening to counterpart is much more revealing. Sometimes, these tactics seem to be contrary from one to one. But it is not so, as said previously, one tactic is true and prefect in one set of circumstances while the same may prove to be counterproductive. 

 

 

 For this reason, the skilled professional’s help is very important. Particularly, MSME entrepreneurs need them badly. In western countries many institutes have launched formal courses on Negotiation learning. Whatever academic or theoretical knowledge one may have, practice makes one perfect in negotiation. Subjective negotiation is also important with objective negotiation based on the commercials. For example, in an acquisition negotiation it is not compulsory to talk to Employees union and surrounding environmental & social activists. 

 

 

https://blog.our-area.com/ But taking them into confidence will help make the deal more successful. Business negotiation’s success depends more on detailed and professional drafting of the agreement. Arbitration clause in a Negotiation business agreement is very important to avoid long and tardy process of judicial system. Particularly in Indian market, the judicial system is very lethargic and takes lot of time for final outcome. This makes Negotiation skill more relevant.

 

 

Articles   useful for this article subject. 

 

Is Namecheap Hosting (And Domain) Good for WordPress?

www.digitaldeepak.com

3 Strategies To Help You Improve Your Content Marketing Game

If this will not provides you an Entrepreneurial mindset, nothing can!

https://630ampodcast.com/last-bite-of-apple-why-the-retail-investors-are-the-tail-end-of-capitalizing-on-growth/