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Overpricing Your Business Can Hurt Your Chances Of Selling

Pricing a business for sale too high can deter buyers, miss the market, and appear desperate

When considering the pricing strategy for selling a business, it is important to be aware of the potential downsides associated with setting the price too high.

- Turning away potential buyers - Overpricing may deter buyers from even considering the business or making an offer. They may assume the seller is unwilling to negotiate or that the business is not accurately valued.

- Appearing desperate later - If the seller has to lower the price multiple times, it can seem like a red flag or sign of desperation to buyers.

- Losing negotiating power - Starting with an unrealistically high price leaves little room to negotiate. Buyers may make lower offers, knowing the seller will eventually accept less.

- Letting competition enter - An overpriced business stays on the market longer, allowing more competing businesses to become available to buyers.

- Wasting time and money - The costs of marketing and keeping the business running mount over an extended selling period. It also takes time away from the seller's other plans after the sale.

- Creating suspicion - Buyers may think something is fundamentally wrong with the business if the seller seems unreasonable in their pricing.

The optimal strategy is to price the business based on an objective valuation, taking into account its true worth from a buyer's perspective. Being flexible with some room for negotiation is also key. Selling quickly at a fair price is usually the seller's best move.