Both the business owner and the broker are motivated to obtain the best possible price that a reasonable and responsive buyer will pay because both the owner and the broker have a vested interest in the sale. Increasing the down payment to one-half can reduce the selling price by twenty percent. Generally, a buyer attempts to acquire as much business as possible for their available cash. Disregarding other factors, high percentage down payments generally cause buyers to discount offers. Terms are significant when pricing and selling a business .
Competition influences price and terms .
Competition among buyers can create higher selling prices. When a business is overpriced or the owner offers unreasonable terms, few buyers, if any, will have an interest in acquiring that business. Conversely, when a business is priced realistically with reasonable terms, more buyers are likely to pursue an acquisition of the business. Finally, buyers know something about their market. The buyer who believes other buyers are competing for the business will be highly motivated to offer the asking price to avoid losing the business to another buyer s offer.