Mastering The Art Of Pricing Your Business For Maximum Value

Simple business psychology gets ignored a lot.

BUT – like most financial transactions, a business sale involves both logic and emotion for the buyer.

> The logic part is based more around the financials and the return on investment.

> The emotion part relates to the personal motivations behind the buyer wanting to acquire the business in the first place.

> Some aspects involve both logic and emotion – for example, a potential buyer believing that new ownership will generate more value.

So I’m surprised that ‘price’ is frequently introduced without any serious narrative or precise understanding of the buyer.

Focusing on price too early makes it all about the numbers. And remember, the ‘right kind’ of buyers will pay a premium for the ‘right kind’ of business.

The build-up to an exit can take several years, to optimise the valuation AND to strategically market the business to hook in multiple qualified buyers, who are prepared to pay a premium.

In the end, pricing is both an art and science.

#sme #business #ukbusiness #exitlaunchpad #M&A #mergers #acquisitions