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BATNA in a Sale

Your best alternative to selling, including keeping the business, as a source of negotiating leverage.

What BATNA Means When You Sell​

BATNA stands for Best Alternative To a Negotiated Agreement. Warrillow defines it plainly as "your plan B and source of leverage": the thing you will do if you and a given buyer never reach a deal. In a business sale, the strongest plan B is usually the simplest one. You keep running the company. Because most owners are not forced to sell, a healthy, profitable business gives the seller a credible alternative that the buyer cannot match by stalling or low-balling.

Warrillow frames this as the foundation of the seller's negotiating position rather than a fallback to dread. As he puts it in his deal-mechanics chapter, the negotiator's task is to take any offer and improve it:

"The art of selling well is to take any offer—no matter how low—and try to nudge it up."

Warrillow, The Art of Selling Your Business, ch. 16

That nudging only works when you can afford to be refused.

Keeping the Business Is a Standing Offer​

The central insight Warrillow draws out is that you do not need a second buyer to have leverage. Keeping the business is itself a standing offer, and the rival bidder a seller invokes can legitimately be the owner. When an acquirer asks whether there are other parties at the table, an owner with a strong BATNA can answer honestly that yes, there is at least one alternative buyer who values the company highly: themselves, at the price that would make selling worthwhile.

This reframes a weak position. A "prop deal" (an exclusive negotiation with one buyer and no competition) normally drains the seller's power. But an owner who is genuinely content to hold the company carries leverage into even a single-buyer talk, because walking away is not a bluff.

BATNA, Multiple Offers, and Manufactured Tension​

Warrillow ties BATNA to his broader argument that competitive tension drives price. Real bidders are best, but he argues you can create the impression of competition even before it exists. His example is the pre-diligence package:

"A professionally prepared pre-diligence package is a subtle but powerful way to create competitive tension for your business—even if none exists."

Warrillow, The Art of Selling Your Business, ch. 3

A strong BATNA and manufactured competitive tension reinforce each other. The first makes you willing to walk; the second makes the buyer believe someone else will step in if you do.

Strengthening Your BATNA Before You Negotiate​

BATNA is not fixed. The same factors that make a company worth keeping also make the alternative to selling more attractive: durable profit, a business that runs without the owner, and an owner who is not desperate to leave. Warrillow warns against the opposite posture of testing the market on a whim, noting that a sale process is irreversible, "like bread: you can't un-toast it" (ch. 3). An owner who can credibly stay is the one least likely to be pressured into a bad deal.

When the time comes to ask for more, BATNA is what lets the owner make a calm, quantitative case rather than a needy one. Warrillow's example is Stephanie Breedlove, who sold a roughly $9M business for $54M: she "didn't just ask for an extra $15 million; she made a quantitative case about the strategic value of owning her company" (ch. 16). A seller with somewhere else to stand can press that case without flinching.

Further Reading​

Sources: Warrillow, The Art of Selling Your Business ch.3, ch.16.