4 Reasons Why the Business Broker Has Listed No Price on the Business For Sale

I’ve seen this as an increasing trend in listings. The seller will not post a list price for the company for sale. Why wouldn’t they list how much they want? Here are a few responses I’ve received from qualified brokers.1. It dissuades buyers who aren’t serious from wasting the broker’s time. Business brokers seriously get bombarded by unqualified buyers. According to various resources only 10% of the people who say they are interested in buying a company will get to the point where they actually submit a written letter of intent. Even less will actually close on a business. Most business brokers are compensated based on contingency, meaning that if they don’t sell the business they don’t get paid. Several will charge an administration fee or a listing fee to gather all of the pertinent documentation and list the business for sale with various services. A buyer who puts in an offer without knowing the price will be more likely to have done their homework.2. Selling a business is like playing poker – The business broker is trying to get you to show all of your “cards.” When a buyer puts in an offer the broker will try to get you to represent how much is coming from cash and how much is coming from bank or lender financing. Business brokers love “mostly” cash buyers because it means they can get paid quickly. Rarely are businesses purchased with all cash. If the business broker knows they are waiting on an SBA loan or other financing they will ask for proof of your financing.3. The price of the business is subjective to the buyer. I firmly believe that every business is subjective to the buyer in their personal and financial situations. I also believe you cannot pay too much for a great business. The greatest question is the business you’re buying a great business or a poor business? Business brokers also cite that there is a range of prices that businesses move in. There is never a magical number that will get the deal done. Rarely do business buyers shoot out a super high price. It’s more frequent that the price is going to be low.4. The terms are more important than the price to the seller. One business broker told me that through his experience sellers of businesses are much more interested in the people that are buying their business as opposed to the price. Most business owners/ managers are more concerned that their people, reputation, and clients are well taken care of as opposed to the large chunk of cash they have to pay taxes on when they sell the business. These sellers are usually business owners/managers as opposed to true absentee owners. If the wrong buyer is trying to acquire the business, the price will never be enough. If the right buyer is buying the business, the price is always negotiable.

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