“I’m Just Not Ready…”
June 24, 2025
Does Value Planning Equal Exit Planning?
July 15, 2025I’ve spent decades building my business, and now I’m finally ready to begin the next chapter by selling it. I’ve already had a professional valuation completed and have a few prospective buyers in mind—groups I believe would be excellent stewards of the company that I’ve built.
Naturally, my instinct was to present the business to them with a set price. But my M&A advisor advised strongly against listing an asking price. That seemed counterintuitive to me. After all, when I shop for a house, a car, or even a piece of equipment, there’s always an asking price. So why is it different when it comes to selling a business?
This is an excellent and very common question—one that nearly every business owner asks at some point in the sale process. The answer lies in the unique dynamics of the lower middle market and the structured process used to market and sell businesses in this range.
In lower middle market M&A—typically defined as companies with $5 million to $100 million in annual revenue—the most effective approach is to run a controlled, competitive process among a curated group of qualified buyers. When no asking price is provided, it avoids anchoring buyer expectations and helps create an environment where acquirers are compelled to compete based on the value they personally see in the business. This often leads to significantly higher offers—sometimes 5%, 10%, 20%, or more—above what we believe to be the company’s fair market value.
How is that possible? Because every buyer evaluates the opportunity through their own unique lens. Some are looking for market expansion, others for a specific customer base, proprietary technology, intellectual property, or a skilled workforce. These intangible or strategic benefits—often referred to as a strategic premium—can dramatically increase the buyer’s perceived value of the business.
Additionally, certain buyers can generate operational efficiencies or cost savings—what we call synergies—that the current owner could never realize. These synergistic acquirers are often willing to pay more because the acquisition will immediately improve their bottom line or competitive position.
By omitting an asking price and instead focusing on a disciplined, competitive sale process, we give buyers the opportunity to put their best foot forward based on their own strategic goals. This shifts the conversation from “what is the seller asking?” to “what is this worth to me?”
In summary, while it may feel unnatural at first, withholding a price is not about playing games—it’s a proven strategy to maximize value. For lower middle market businesses, letting the market determine the price through competitive tension often results in far better outcomes than setting an upfront number that could unintentionally cap the upside.
For more information about Touchstone’s Sell-Side Process please contact us. We are happy to have a 100% confidential conversation about your individual situation.
Steven Pappas, M&A MI
Partner, Managing Director
Touchstone Advisors
860-669-2246
spappas@touchstoneadvisors.com
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