Sellers aim high when it comes to asking price. The logic they use is that they can always reduce the price. What sellers need to remember is that if the asking price is initially too high, buyers won’t even take a serious look. The selling price must be realistic and what the market will bear.
Pricing Matters
If the asking price is too high, buyers will move on. In the meantime, you may have lost a qualified buyer that would have been very interested if the price was lower. Pricing should be treated in a professional manner.
Instant Millionaire?
Some sellers want to sell their business for top dollar and become instant millionaires. Sometimes this is warranted and sometimes the numbers don’t support these valuations. It pays to be realistic. There is usually about a 15% difference between what sellers want and what the market will bear.
Business Brokers Help Determine an Accurate Valuation
When it comes time to calculate a reasonable asking price, a business broker has considerably expertise. Business brokers take many diverse issues into consideration to come up with a price this is fair. A few of the factors that business brokers consider are location, competition and annual sales variations.
Prospective Buyers Can’t Read Your Mind
Determining the right value for your business is key. The last thing you want is to have an evaluation that is too high as you will eliminate many prospective buyers. While you may know that you are willing to negotiate and perhaps even reduce your asking price, prospective buyers do not. A realistic and appropriate asking price is of paramount importance. A business broker can help guide you towards the best decision.
Market Forces Have the Ultimate Say
In the end, it is the market, not the seller, that determines the correct selling price. If no one is willing to pay a certain price than a given business is overpriced. That may be a brutal fact, but it is also quite true.