John B. Charleston, III, MBA
The Highest Price Vs. The Best Deal
Naturally, sellers want the highest price they can get for their business. In come cases, however, it might not be the best deal. For this reason, every offer should be scrutinized carefully. When an offer is presented, the first thing a seller looks for is the price. If it is lower than anticipated, the seller’s first reaction is to give it back, initiating the case for its being much too low. A seller should consider an offer carefully and avoid a hasty reaction.
Here are a few alternatives that might offset a lower price:
• an offer with no or very few, and easily satisfied contingencies
• a consulting agreement or other deferred compensation
• a quick closing
• all cash, if that’s important
• employment contracts with relatives or long-time employee(s)
• business vehicle to remain with the seller
• buyer has a long success record indicating long-term survival
• short-term payment period if seller financed
When a professional business broker is involved, he or she can point out those areas that may offset the price, down payment or the structure of the deal. After all, the important thing is not what a seller gets, but what he or she gets to keep!