Should I Lower the Price to Get a Sale
If you have a listing, you may ask yourself what asking price is my sweet point.
Most businesses take months to sell.
During the weeks and months of selling your business, and talking to prospects you might get a little anxious to sell.
That is completely normal and natural.
When ascertaining if the price is the issue, then you want to analyze it from a few fronts.
Generally, a lower price will attract a quicker sale all things considering, most of the time. There are a few instances or exceptions to this, but more importantly it depends on a few factors if you should do it.
This applies to many properties including real estate and other inventory or assets.
First, how quick do you want a sale on 1-10. If you need to get out, like right away, yes make the price as attractive as possible. Undercut it by at least 20% of fair market value (where it will sell within 6 months).
This will signal to the market you’re serious but also attract as many leads as possible if the asking price is relatively proportional to the cash flow.
If you are at 5, that’s not necessarily a time to panic and do a huge price drop.
When we list a business we try to assess the real value and we factor in timelines to sell. That doesn’t mean you should hold out for max value with adequate analysis of timelines, and most business sales that generate max value are not 100% upfront cash deals.
The true test is understanding what’s the lowest you’d be willing to accept, and to structure the price in line with something above that so you leave cushion but close enough to make it attractive for leads and prospects and serious buyers who will place offers. If something is priced too high, it might prevent offers from coming in because they can’t justify parting with that much for it. You want prospects excited to acquire the asset. Most will undervalue what you have, not overvalue what you have, so keep in mind the closer your price is to true market value, the less they have in terms of justifications to move from that.
Reach out for help with acquisitions:
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Leader in Acquisitions with Expertise in Representing Sellers & Buyers on Deals
Jarbly is a leader in acquisitions with expertise in helping with listings, negotiations, LOI's, asset purchases, company purchases, and real estate purchases. JARBLY has access to high net worth individuals if you are on the sell-side and businesses that may be of interest to you if you are on the buy-side.
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