If you are in a hurry to sell your business, and speed is now more important than getting maximum price – price the business at or near an average sales price based on a realistic estimate of market value. Make sure you still have some negotiating room in your asking price. Buyers will almost always find a problem and the ability to give a little back solves many problems. If possible, always keep a few chips in your pocket to use to solve problems all the way through settlement.
If you have the luxury of time, and are considering selling your business, Please click here for a downloadable e-book, “ 10 Ways to Increase the Value of Your Business“.
One of my first listings as a new business broker was a small daycare center. The Seller had made her decision to sell and was now in a rush to get it done. She had been marketing the business for the past two months herself. She did not have a huge investment and just wanted out so, because she wanted a quick offer, she had priced the business at about 75% of the fair market value. Her one prospect proceeded to negotiate her down to 60% of the fair market value and still chose not to close. Prospects assumed something must be wrong with the business for it to be priced so low. We immediately suggested raising the price to 95% of fair market value. This was low enough to generate contacts from real prospects and gave us money with which to negotiate with. The business was sold and settled at 85% of fair market value in 60 days.
Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors Business Brokers, Business Valuations, Business Transactions