Does Your Asking Price Truly Matter?

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 716 words

Yes. An asking price that is too high keeps good buyers from ever calling, and one that is too low caps what you can get, so for a company of real size the safer approach is often no published price at all, with competition among qualified buyers setting the number.

What matters is not the figure you print but the range you are prepared to defend and the process that tests it.

What an inflated price does

Owners often start high on the logic that they can always come down later. The trouble is that buyers cannot see your flexibility. A qualified buyer who sees a price well above what the earnings support rarely negotiates; they move to the next opportunity, and you never learn they were interested.

The damage is hard to undo because first impressions stick; buyers keep notes, and the same names come back when you relaunch. What typically follows:

• The best-matched buyers screen you out before the first conversation.
• The company sits on the market, and a listing that has been visible for months invites the question of what is wrong with it.
• When the price is finally cut, buyers read the cut as weakness and press harder.
• Lenders test the price against cash flow regardless. If an SBA or bank lender will not support the number, the buyer cannot pay it.

What an underpriced number does

The opposite mistake is quieter. An owner eager to move on, or anchored to an old conversation with a competitor, names a figure first. Every buyer then negotiates down from it. There is almost never a mechanism that pushes a buyer above your own stated price, so the number you name becomes the most you can hope for.

Owners also underprice by accident. A price based on last year's tax return, before add-backs for owner-specific costs, or a rule of thumb heard at a trade association lunch, can be well below what a buyer would pay for the same earnings once they are properly restated. A valuation built from a recast of your statements is the protection against that.

The market has the final say

A price is only real when a buyer who can fund it agrees to it. Your retirement needs, the years you have put in and what a friend received for his company do not appear in a buyer's model. What does appear: adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, after owner-specific costs are added back), how durable those earnings are, growth, customer mix, management depth and the terms you will accept. In the firm's experience, profitable companies in the $3 million to $100 million revenue range most often trade at three to seven times adjusted EBITDA. Where you sit in that band is the argument.

Pricing with a range and a process instead

In a sell-side process, a blind profile describing the company without naming it goes to screened buyers without a price. Those who sign a confidentiality agreement and prove they can fund a purchase receive the full package, meet you, and submit letters of intent (LOIs), the written offers that set out price and main terms. When several arrive together, each buyer knows it is competing and prices accordingly. Your advisor's valuation tells you what a reasonable outcome looks like, so you can judge the offers, but it does not cap them. Our answer on how Texas M&A advisors set a realistic asking price explains when a stated price still makes sense.

Know two numbers before the first conversation: the range you expect, and the lowest net amount, after debt and taxes, that would make selling worthwhile to you. Keep the second one to yourself.

How we handle pricing

MDR & Associates starts with a free opinion of value after reviewing three years of financials, then runs the ten-step process with the aim of several letters of intent negotiated at the same time. We present every offer to you in person, and you accept, reject or counter. If we do not believe we can sell the company for maximum value, we decline the engagement rather than tell you what you would like to hear. For more on creating that competition, see how to find multiple serious buyers. For a starting range, request a free valuation snapshot.

Where this fitsBusiness valuation in Texas →

Questions owners ask next

Should I tell a buyer my number if they ask?

Usually not. Once you state a number, it becomes the ceiling. Ask the buyer to put a proposal in writing with price and terms, then let your advisor compare it with what other qualified buyers are prepared to pay for the same company.

What if every offer comes in below my range?

First find out why. Buyers may have spotted a risk you can fix, or the range may have been optimistic. You can decline, deal with the issue and return later. Nothing obliges you to accept, and with a success-fee-only arrangement, walking away costs you nothing in fees.