Disclosing the listing price for your business is optional. Each business sale is unique. As such, the decision to disclose your listing price is contingent on the seller’s personal goals and motives.
Reasons why you may want to disclose your listing price:
Disclosing the listing price establishes transparency during the sales process. It gives prospective buyers a starting point and educates them around your expectations.
2. Qualified buyers will be contacting you
The listing price can serve as a filter, ensuring that mostly qualified buyers, who have genuine interest and the financial capacity to buy your business will contact you. Both parties are able to save time and effort on buyers who do not have the financial capacity needed.
3. Increases confidence
A listing price showcases the seller’s seriousness in their business. Potential buyers may see it as a sign that the seller has a good understanding of the business’s value and increase their buyer confidence, increasing their interest in the business.
4. Influence market perception and competitiveness
Buyers will want to compare your business with others when making a purchase. By disclosing the listing price, you can influence the market perception of the value of your business, potentially increasing your competitiveness.
Reasons you might not want to disclose your listing price:
1. Increased negotiation power
Disclosing the listing price can reduce the seller’s negotiating power. Not having a predetermined price lets you retain the ability to negotiate with the buyer and potentially sell your business for a higher price.
2. Larger pool of buyers
While a listing price can act as a filter, saving time, it can also limit your buyer pool. Choosing not to list your price allows more flexibility, attracting buyers with varying financial, strategic and business goals–allowing you to negotiate and find one that best fits your situation.
3. Complex valuation
In some cases, certain businesses have characteristics such as intellectual property that make it difficult to obtain an accurate valuation. In these cases, it is more appropriate to keep the listing price confidential.