Why Setting the Right Asking Price Is Critical When Selling Your Business

 Today, I want to talk about a topic that comes up all the time with business owners:

Why you need to get your asking price right when selling your business. https://youtu.be/CuiJUenzEzc 

1. The Most Common Mistake Sellers Make

When I was a business broker, I would meet sellers who were convinced their business was worth far more than it actually was.

Example:

• Business value: $275,000
  
  

• Seller’s “needed” price: $500,000
  
  

Many sellers base their asking price on personal financial needs, not what the market will actually pay. That’s a huge mistake. What you need has nothing to do with what the business is worth.

If you need more money to retire, maybe you aren’t ready to sell. That’s okay—but don’t expect the market to meet your personal goals.

2. Overpricing Kills Your Chances With Reasonable Buyers

Some brokers might tell sellers: “Let’s list at $550,000—you can always negotiate.”

I never worked that way. I would either price it close to fair market value or decline the listing.

Why? Because:

• Reasonable buyers know what a business should sell for.
  
  

• If they see a $275,000 business listed at $550,000, they assume the seller is unreasonable.
  
  

• Reasonable buyers are educated, motivated, and ready to act, but they won’t waste time with sellers who are out of touch.
  
  

Overpricing a business repels the very buyers you want.

3. Who Overpriced Businesses Attract Instead

If you overprice your business, the only buyers who show up are usually unreasonable buyers:

• They low-ball your business at $150k–$200k
  
  

• They may lack financing or motivation
  
  

• Some are tire-kickers, wasting your time
  
  

Meanwhile, the serious buyers never call.

4. The Reasonable Buyer Is Key

A reasonable buyer:

• Has money and motivation
  
  

• Understands business valuation
  
  

• Won’t pay double the worth of a business
  
  

Your goal as a seller is to attract these buyers. That only happens when your asking price is accurate and credible.

5. How to Get the Price Right

Getting it right starts with proper advice and a thorough evaluation. That’s why I do Most Probable Selling Price Evaluations for my clients worldwide.

A proper valuation allows you to:

• Set a realistic asking price
  
  

• Have intelligent conversations with potential buyers
  
  

• Attract buyers with money, purpose, and motivation
  
  

Don’t guess your business’s value. Work with someone who can show you exactly what it’s worth.

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Austin, TX - January 2026

 

I'll be in Austin, TX in January doing a Business Buyer Boardroom Mastermind day.

Learn more and enroll at https://www.BusinessBuyerBoardroom.com

How Much Is My Business Worth? Understanding Real Business Valuation

Today, I want to tackle one of the biggest questions every business owner faces: How do you put a price on a business?

Whether you’re thinking about selling in a few years or just want to plan for the future, understanding how valuations work — and which type you actually need — can make a huge difference.

Learn more about business pricing, exit prep, and MPSP reports:  HowToSellMyOwnBusiness.com 

Watch the full video here:  https://youtu.be/6AFQjkl-Mvs 

 

Premiere- Linda Smargis Market your business with a book

 

Everyone needs a book for their business

New Interview guest- Linda Smargis

I’m happy to have Linda join me for a one-on-one interview!

Linda has been a ghostwriter for years helping people and businesses everywhere gain credibility by becoming an author.

Tune in and as we’ll be discussing what kinds of businesses can benefit from the marketing heft that can come from being an author.

This is a ‘must see event’ for business owners who are looking for an edge over the competition.

I even once spoke to someone who used a book in their search efforts!

Set yourself a reminder on YouTube here: https://youtu.be/f984MII_emU 

Premiere will be going live Monday December 08, 2025 

See you there!

David C Barnett

Should You Buy Into an Existing Business as a Minority Partner?

Key Risks, Financing Realities, and How to Structure a Partnership the Smart Way

This week I would like to talk about a question I received few years ago, Kurt sent in a great question:

“I’ve recently approached a local business owner about partnering—me buying into the business. He might actually be considering it. How do I evaluate this opportunity and what financing options exist?”

If you’re thinking about becoming a minority partner in an existing business, there are unique risks, structural challenges, and financing limits you need to understand before moving forward.

Let’s break it down. https://youtu.be/UNZavOxgg74 

1. Buying Into an Existing Business Usually Means Buying Equity Only

If a business is already operating and has financing in place, you aren’t buying the whole business. You’re buying shares representing the equity, not the debt.

Example:

• Business value: $400,000
  
  

• Existing debt: $300,000
  
  

• Equity: $100,000
  
  

If you buy 50% of the business, you aren’t responsible for half the debt—the financing is already baked in. You’re simply buying $50,000 worth of shares.

2. You Probably Won’t Get Outside Financing

Here’s a reality many buyers don’t like hearing:

No bank lends money to buy shares in a small business.

The only exceptions:

• Personal loans based on your income
  
  

• A personal line of credit
  
  

• Loans from family or friends
  
  

• Rare cases where the seller finances the buy-in
  
  

If you’re planning to quit your job to join the business, remember:

Arrange any personal financing BEFORE you leave your job.

Banks lend based on your personal income—not projected future business earnings.

3. The Big Danger: Becoming a Minority Shareholder

This is the part most people underestimate.

Being a minority shareholder is a lot like getting married—but without the romance.

Why?

Because the majority owner can still outvote you on every major decision unless you create a detailed partnership agreement outlining:

• Voting rights
  
  

• Reserved matters requiring unanimous consent
  
  

• Profit distribution
  
  

• Decision-making authority
  
  

• Buy-sell clauses
  
  

• Dispute resolution processes
  
  

If your relationship relies on the contract regularly, it means conflict already exists.

And conflict usually stems from one critical issue…

4. Partnerships Fail When Roles Aren’t Clearly Defined

I’ve seen many partnerships explode simply because both partners believed they should control the same areas of the business.

Successful partnerships have:

Clear job descriptions

Each partner knows exactly what they are responsible for.

Formal organizational structure

Just like a larger company, the business has a defined hierarchy and workflow.

Boundaries

Partners don’t meddle in each other’s domains.

I recently worked with a partnership where:

• One partner was CFO and President
  
  

• The other was Head of Operations
  
  

They rarely stepped into each other’s lanes. That structure is what made the partnership last.

5. Buying Into Someone Else’s Existing Business Is Especially Risky

Unlike starting a partnership from scratch, you’re joining a business that is:

• Already established
  
  

• Already operating under one person’s control
  
  

• Already influenced by one owner’s habits, assumptions, and decision-making style
  
  

Here’s the key question:

Is the current owner emotionally mature and business-savvy enough to share control?

If they’ve been the sole decision-maker for years, shifting to shared ownership may be harder than you think.

6. Multi-Year Transitions Require Even More Structure

Some people structure buy-ins over several years. For example:

• Year 1: Buyer purchases 20%
  
  

• Year 2: Company pays a dividend
  
  

• Buyer uses dividend to buy another 20%
  
  

• Over several years, ownership flips
  
  

This only works when partners have:

• Policies & procedures
  
  

• Job descriptions
  
  

• An organizational chart
  
  

• Defined responsibilities
  
  

• A clear shareholder agreement
  
  

Without that structure, the partnership turns into chaos—and somebody eventually wants out.

7. My Final Advice

If you want the full argument, I lay it out in detail in my book Invest Local:

• Being a minority shareholder is rarely a good idea
  
  

• The only exception is when all shareholders are active operators, which applies in your case
  
  

But proceed carefully.
Evaluate the owner, the business, the structure, and—most importantly—the relationship.

And remember:

Partnerships are easier to get into than to get out of.

If you want to learn more about creative private investments, check out my book Invest Local — available on Amazon or as a PDF from DCBBooklist.com .

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Great Interview with the Host of Foreman Law Sam Foreman and Jake Wayman

 

Preparing, Valuing, and Structuring Your Deal For Long-term Success In this episode of the How to Buy or Sell a Business Successfully podcast, Sam Foreman and Jacob Wayman welcome David Barnett to the show. As a small business expert, he now runs a consulting firm that helps buyers and sellers navigate business transitions working primarily across North America. David breaks down what truly makes a business attractive to buyers and what can stand in the way of a successful deal. He explains the importance of having strong systems, a capable team, and a business that can operate without the owner at the center of everything.