Leveraging Scarcity When Selling Your Business
Does Your Business Broker Create Scarcity April 24, 2017 by Michael Shea PA Often misunderstood at the mainstreet and middle market segments of business sales is the leveraging of the element of scarcity. When large companies with EBITDA over $1MM dollars go to market for sale they often are sold in an auction format. No price set and buyers who need to grow and fit strategically submit offers and terms. The leverage and control is the sellers. Now there are obviously some games and tactics used by buyers to give sellers haircuts prior to close but….leverage remains the sellers. The reason private bankers and M&A professionals do this is to create competition and drive the principle of Scarcity into the process. Conversely, when small business’s or middle market companies go to market they often have a price. And frankly, there are lots of good reasons as to why that is so which can be talked about later. However, Scarcity as a principle can and should still be lever