Three reasons you should list an asking price on your ad (and not P.O.A)

If you’re selling a business, you might be feeling emotional at the thought of putting it up for sale. After all, you’ve invested a lot of time and energy into your business. It can feel confronting – and final – to put a hard number on your life’s work.

But if you want to honour your efforts, and get the best price possible, our research shows listing a price will get you further.

That’s why we recommend you find out what you think your business is worth, and list it (or a similar figure) clearly. It’s a more effective strategy than writing ‘POA’ (price on application).

Here’s three reasons why:

1. You’ll get more enquiries

Here’s a valuable insight into potential business buyers: most of them only make one or two enquiries.

There’s a few reasons for that.

Firstly, most buyers are selective about what they’re looking for. They want a business that meets all their key criteria, one of which is typically price.

Secondly, buying a business is a scary thought. Many buyers are facing the prospect of quitting their jobs, and committing to a business with no fixed income. The idea of contacting a seller without knowing the price can feel daunting.

Given most enquirers have no business buying experience, they’re also wary of being ripped off.

In both cases, ‘POA’ represents a big unknown…and an obstacle in both a practical and emotional sense. The price might not meet their budget criteria, and they’ll have to invest time and energy just to find out what it is. Both of these things can prevent a buyer from making contact.

That’s especially true if there are other, similar businesses in your industry with a price listed. Many buyers will choose the certainty of a ballpark figure over the uncertainty of POA.

Listing a price lets potential buyers weigh your business up against others on its merits. Listing ‘POA’ gives them a reason not to contact you…and as a result, some won’t bother.

2. You’ll get better enquiries by listing a price

You have better things to do than field enquiries from someone who can’t afford your business.

By listing a clear price, you’re giving prospective buyers an indication of what your expectations are…even if you’ve left a little wiggle room. That will help filter out tyre-kickers who like the idea of your business, but don’t have the funds to pay for it.

It will also save you getting queries from people who just want to know how much it costs. Again, by removing the ‘how much’ barrier, you’re inviting buyers to seriously weigh up your business on its merits, rather than waste time and effort second guessing how much it might cost them.

That will, in turn, lead to more serious enquiries.

3. You’ll be starting an open, honest conversation

Selling a business usually relies on you building a relationship with the buyer. It’s a lot more involved than most other purchases, and you’re both in it together.

Writing POA, even with the best of intentions, means you’re not giving the buyer an important piece of information up front. And if you want to build a constructive business relationship with them, that’s not an ideal way to start one.

On the other hand, listing a price gives the buyer a clear indication what you think the business is worth. They won’t have to waste time asking you the price, wondering why you didn’t list one, and second-guessing what you might be hiding.

Instead, you can spend time talking about the business, why you’ve valued it at that figure, and what you think it can offer them. That’s a much more exciting conversation, and one that will drive the sales process forward.

‘But I don’t want to give too much information away’

It’s understandable if you’re worried about a competitor getting insight into your business, or somebody undercutting you. But if a competitor can’t figure out how much your business is worth anyway, then they’re probably not much of a competitor.

And not listing a price doesn’t mean someone will undercut you. On the contrary, you’ll be disadvantaged compared to similar businesses who are willing to list a price.

Besides, the right buyer is unlikely to fret about a minor price difference if your business offers a better opportunity. Instead of withholding the price, focus on what’s unique and special about your business…benefits and opportunities that other similar businesses don’t offer.

Our advice? List a price.

You might feel unsettled at the idea of putting a dollar value beside your business. And that’s okay.

But listing a price really will give you the best chance at a successful sale and a step closer to your next adventure. You’ll get more enquiries, you’ll get better enquiries, and you’ll make it easier to connect with your buyer.

If you write ‘POA’, any potential buyer who contacts you will want to know the price, anyway. By listing the cost upfront, you’ll likely hear from buyers who can afford your business, and you’ll be a step further along the process when they get in contact.

And that, in turn, will increase your odds of making a successful sale.