Business owners, is your asking price really important? Ask yourself this question. If you are selling a product in the market with competitors, does it matter how much you charge for your product? Of course! The customers know what they can get elsewhere and will not pay more than necessary. However, if you are one of the only sellers in that particular market then charging higher prices may be acceptable to them because they have no other choices.
So when do asking prices matter? When there are lots of options for consumers to choose from, then it becomes imperative that the seller has a competitive edge or their business will suffer greatly.
Pricing Does Matter
When you set an asking price that is too high, buyers will simply move on. However, you can lose a qualified buyer that inquires at a lower price. So, pricing is something that should always be treated in as professional of a manner as possible.
Instant Millionaire? Maybe and Maybe Not
According to recent studies, there is usually about a 15% difference between what sellers want and what the market will bear. This means that if you are looking to sell a business that is over $1 million in value, you can expect to receive around 90% of your asking price. However, it is important to keep in mind that this data is only based on businesses that have actually been sold.
Business Brokers Help Determine an Accurate Valuation
A business broker can help you determine an accurate valuation for your company. They will take into account a number of factors, including location, competition and annual sales variations. So, does the asking price really matter? The answer is yes – and business brokers can help you make sure you’re getting the most for your business.
Prospective Buyers Can’t Read Your Mind
You want to make sure that you are asking for a realistic and appropriate price. This will immediately eliminate many prospective buyers. A business broker can help guide you towards the best decision.
Market Forces Have the Ultimate Say
Ultimately, it is the market that decides what a product is worth. The business is overpriced if people aren’t willing to pay a certain price. It’s a brutal fact, but it’s true. So how do you find the right price for your product? You have to find the sweet spot where people are willing to pay more than your costs, but not so much that they would rather go to a competitor.