3 Reasons to Sell a Business Without Including an “Asking Price” – From Jordan Zwiegoron

Imagine for a moment that you’re driving through a desirable neighborhood where you’re hoping to find a home you’d love to buy, and you spot a “For Sale” sign.

You pull over and grab a brochure from the realtor’s signpost.  With anticipation, you hold the flapping paper still, only to sigh inwardly, ‘too expensive.’  You’re about to get back into your car, when you notice another stunning home for sale next door. Leaving your car engine idling, you walk next door and grab another brochure. This time, for this particular home, the price displays, “Contact Agent.”  As a potential buyer, you may be initially annoyed by this lack of upfront disclosure.  And yet, this house looks intriguing. You jump back into your car and find your cell phone, making a call to inquire about the price. The call leads to a meaningful conversation, and unexpectedly you find yourself discussing home of your dreams with the person on the other end.

Like home sales, small businesses are typically listed with the asking price exposed and upfront to potential buyers. In a similar fashion to the occasional undisclosed home price, even small businesses can be listed without an immediately revealed asking price.  The question here is whether or not the unconventional approach will attract more buyers than it drives away.

It’s important to mention that not all small businesses will benefit from listing with an undisclosed asking price.  A professional business broker can review the pros and cons of each approach with you. Listing a business without an asking price is the exception, rather than the rule.  The fundamental reason to consider listing a business for sale without an asking price is to entice buyers to determine value, based on their own market assessment.

Here are 3 reasons to consider taking the undisclosed pricing path when listing your business for sale.

Extreme industry multiple variance.  Most small businesses sell within a relatively predictable price range.  While a formal valuation will help fine-tune the target price range, most industries have established “multiples,” which are commonly based on adjusted earnings. However, there are always outlier industries, where the established range is tricky to predict. For example, software companies can sell for a multiple of revenues anywhere between 1x – 10x.  Listing a company without an asking price can be a wise decision when selling a business with undefined or abstract multiple ranges.

Wildly unique business model.  Several years ago, I sold a chain of Bay Area donut shops called Psycho Donuts.  The company attracted national publicity for its unusual flavors and unique environment.  The business was ranked in the Top 10 donut shops in the US, and won competitions on the Food Network.  To this day, it’s one of the most unconventional donut shops in the country.   If your business is fundamentally different than any other company in your industry, it may be worthwhile to consider listing with an undisclosed asking price.

Books aren’t reflecting reality.  There are cases where a business’ books cannot fully capture the actual value the Buyer will receive from the business.  This can happen for many reasons.  Maybe the business model recently changed dramatically leading to more profitable business that is still ramping up.  Whatever the reason, if the value of your business is greater than what’s on paper, and you can lead the right buyer to a greater understanding, you may consider listing your business without an asking price.

In the best-case scenario, listing your business without an asking price can benefit the Seller with a top dollar offer. On the other hand, the approach can also lead to unpredictable results.


Jordan Zweigoron is a Senior Advisor with Sunbelt Business Brokers. He can be reached at (408) 436-1900, x105, or at jordan@sunbeltbayarea.net. Or connect with Jordan on LinkedIn.