Chapter 2: How Buyers Really Think

What is the buyer across the table really thinking?

What sellers often miss

Many owners assume buyers will pay more because of the opportunities they see. More often, buyers pay more because they see fewer risks. Growth potential may create interest, but confidence in future performance is what ultimately drives value.

The takeaway

One of the most effective ways to increase the value of your company is to reduce the uncertainty surrounding it. Buyers reward businesses that are predictable, transferable, and resilient. The more confidence you create, the more value you create.

Figure from How Buyers Really Think. The point is not the exact numbers but how far two offers on the same business can diverge once structure is read alongside price. — The point is not the exact numbers but how far two offers on the same business can diverge once structure is read alongside price.

Illustrative, not your deal. Where the book uses dollar figures, they are there to show how something works, not to describe your business. Your banker, your accountant, and your attorney will put real numbers to your own situation. Full note.

Terms this chapter uses

Read the full chapter in the book

Pre-order the book All 34 rules

Rule 2

Every buyer is evaluating risk first and opportunity second.