What affects the selling price?
Several factors come into play. Two of the most critical are price and terms. Over eighty percent of all businesses sold above $100,000 are sold with one-third or less down and the owner financing the balance. Asking for one-half down will reduce the price by approximately twenty percent. Asking for cash will reduce the price to forty to sixty percent of the one-third down payment price. A buyer is trying to buy as much business as possible for the money he has to pay down. When a seller asks for $200,000 down on a $400,000 value business, the buyer will keep looking until he can find a $600,000 value business where the owner will accept $200,000 down and finance the balance. High percentage down payments cause buyers to discount offers. The business owner who asks for all cash is not going to succeed because buyers know they can buy three times as much business for the same investment. The quality of the information provided to a prospective buyer is critical. The value of the assets
Several factors come into play. Two of the most critical are price and terms. Over eighty percent of all businesses sold above $100,000 are sold with one-third or less down and the owner financing the balance. Asking for one-half down will reduce the price by approximately twenty percent. Asking for cash will reduce the price to forty to sixty percent of the one-third down payment price. A buyer is trying to buy as much business as possible for the money he has to pay down. When a seller asks for $200,000 down on a $400,000 value business, the buyer will keep looking until he can find a $600,000 value business where the owner will accept $200,000 down and finance the balance. High percentage down payments cause buyers to discount offers. The business owner who asks for all cash is not going to succeed because buyers know they can buy three times as much business for the same investment. The quality of the information provided to a prospective buyer is critical. The value of the assets
