When it comes to buying a business, buyers buy a documented and believable future. If you are the seller, it is your job to explain the past and sell the future. While it is up to the seller to prove the value of the business, it is often not a good idea for the seller to volunteer a price. As the old saying goes, “He who mentions price first loses.” Once a price is mentioned by the seller, there is really no chance that the price will ever go higher and it becomes a cap.
It is worth noting that the buyer may be a strategic buyer and may not be buying what you think you are selling. In fact, D. Peter Drucker put it succinctly when he said, “The buyer rarely buys what the seller thinks he’s selling.” Generally, it is up to the buyer to define the price after reviewing the seller’s business.
Do you explain the past and sell the future without mentioning the price?
