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Category Archives: Negotiations

Expect Negative Surprises When Acquiring a Business

By | Accounting, Business By The Book, Business Development, Buying a Business, Financial Reporting, Growth Strategy, Investing in Small Businesses, Negotiations, Ownership & Purpose, Selling a Small Business, Valuing a Small Business | No Comments

Some aspiring entrepreneurs will get started by buying an existing small business and many business owners have growth plans that include buying up other businesses to add larger chunks of growth via acquisition (mergers and acquisitions or “M&A” growth as opposed to “organic” growth). And if you are a business owner, you will most likely at some point sell your business. So here’s a few tips to both sides of the transaction… While it may not be statistically significant in terms of all the deals ever done, in my experience of negotiating with roughly 300 prospective sellers, signing approximately 75 letters…

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How to Negotiate a License and Royalty Agreement

By | Business By The Book, Finance & Accouting, Negotiations, Planning, Selling Your Idea or Invention, Valuing a Small Business | No Comments

Q: We are beginning negotiations for a royalty/license agreement. What is the customary way to value what we should receive as a royalty/license fee? Do you have a template we could use to save on legal fees? A: A license and royalty agreement would generally be used when an author, producer, inventor, or other creator licenses their product, content, or invention to another company to take it to market for them. See How to Determine Whether to Patent and Produce an Invention or License it to Another Company and How to Take an Invention to Market for some examples. The bottom line is that creating a…

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Eight Ways to Prepare for a License and Royalty Agreement Negotiation

By | Business By The Book, Channels and Alliances, Intellectual Property, Legal Issues, Negotiations, Planning, Selling Your Idea or Invention | No Comments

Q: I am about to enter into a licensing/royalty negotiation with a company that is interested in taking my idea to market. I’ve read your Q&A post on Taking an Invention to Market and How to Negotiate a License and Royalty Agreement and they were very helpful, but I am looking for more specifics on how I should prepare for and approach the negotiation? A: The key is to do your homework. Here are a few specifics: Research – First of all, do your research on the potential value of your product or idea by looking at other deals that have been done in your industry with…

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