- A published asking price can help buyers assess a smaller listing-style sale, but it can anchor negotiations before you learn what buyers would offer.
- A private range helps you judge offers without stating a price publicly. You can also use it without running a bid process.
- Neither a published ask nor a confidential bid process guarantees a higher price. Buyer reach, screening, and confidentiality needs should shape your choice.
- Compare offers by their terms and cash at closing, not just the headline price.
Decide what price buyers will see
You can publish an asking price, keep your price expectation private, or invite qualified buyers to bid without stating a price. A published ask helps buyers assess fit but may anchor negotiations. A private expectation gives you a reference point for judging offers, while invited bids let you compare buyers’ proposed prices and terms.
You still need a supportable range before choosing an approach. Salt Creek’s valuation calculator provides a preliminary range, and its EBITDA basics guide explains the earnings measure buyers often use.
Choose how buyers encounter your price
A published asking price can help buyers decide whether a smaller, listing-style business fits their budget. Buyers may anchor on that price and question a later request for more.
A blind listing can show a price without naming your business. You still need to check whether the description could identify you through its location, industry, size, or other details. You can screen interested buyers and control when they receive sensitive information, but neither step removes every confidentiality risk.
For an established business, you may prefer to keep a documented price range private while approaching buyers directly. The range gives you a way to judge early interest without telling every prospect what to bid. You can share it selectively with a qualified buyer if it helps move a serious discussion forward. A private range does not commit you to an auction or require you to accept an offer within it.
If several types of buyers could be a fit, you can invite qualified buyers to bid without stating an asking price. Screen buyers before sharing detailed information, then compare their prices, payment terms, and plans for your role after the sale. A bid process does not guarantee multiple offers or a higher price. Salt Creek’s auction process guide explains invited bids and staged disclosure.
Compare pricing approaches
Choose an approach based on how many qualified buyers you can identify, how broadly you need to reach them, and what business details you can safely disclose.
| Company profile and goal | Buyer reach | Confidentiality need | Qualified buyers known in advance | Approach that may fit |
|---|---|---|---|---|
| Smaller owner-operated business seeking broad listing exposure | Broad, with screening needed | Identity withheld in a blind listing, but details may still identify you | Few known in advance | A published ask may help buyers assess fit. |
| Established business testing interest without publishing a price | Selective | Details shared with vetted buyers | Uncertain | A private range can guide your decisions and be shared selectively. |
| Established business with several plausible buyer types | Targeted | Details shared in stages | Several possible, none guaranteed | Qualified bids may help you compare offers without stating an ask. |
About a dozen quick questions and two minutes get you a ballpark range for your business, built from published industry transaction multiple ranges, with the math behind it. It is a directional estimate, not a formal valuation.
Value My BusinessBuild a defensible private price range
Start with EBITDA, or earnings before interest, taxes, depreciation, and amortization. Reconcile it to your financial statements and tax returns. Adjusted EBITDA starts with EBITDA and accounts for documented costs or income that a buyer would not expect to continue after the sale. A buyer may reject an adjustment if the expense will continue after the sale. Salt Creek’s EBITDA basics guide explains the calculation, and its valuation calculator can help you form a preliminary estimate.
Test the preliminary estimate against completed sales of businesses similar in size and operations, where you have reliable sale prices and comparable earnings figures. Listing asking prices are not completed deal prices, and public-company valuations may not reflect what buyers would pay for your company. Check when each sale closed, whether its price included property, and whether its earnings figure uses the same basis as yours. BizBuySell’s Insight Report draws on broker-reported marketplace transactions, so its completed sales data needs filtering before you use it to assess an established company.
Use differences a buyer would investigate to test whether your preliminary range still holds. A company of similar size may draw a different offer if one customer supplies much of its revenue or the owner handles relationships that a buyer must replace. Consider which buyers could justify and finance your range. Strategic buyers are companies seeking an operating fit, while private equity firms buy businesses as investments. Keep the range private and revise it when qualified buyers provide evidence that challenges your assumptions.
Read the terms behind an offer
An asking price is the amount you quote to buyers, not an offer or a promise of what you will receive. A buyer’s offer may instead lead with enterprise value, the proposed value of the operating business before accounting for its cash and debt. The offer should also specify the working capital required at closing. Working capital generally means current assets minus current liabilities. In a sale, the agreement specifies which items count because the buyer needs enough working capital to run the business after closing.
Equity value is the amount attributable to the owners after the parties apply the deal’s agreed treatment of cash, debt, and debt-like obligations. The parties may also agree on a working capital peg, or target amount to be left in the business at closing. If the business delivers less than that target, the agreement may reduce the price. Excess working capital may increase it. Miller Johnson’s explanation of working capital describes how those adjustments and later true-ups work.
Cash at closing is what you receive when the deal closes after accounting for debt repayment, transaction costs, and amounts held back or paid in another form. If debt has already been deducted to calculate equity value, do not deduct it again. It is not necessarily your after-tax proceeds. An escrow holds back money that may be released later, while an earnout is a possible later payment tied to agreed future results. Rollover equity means you retain an ownership stake instead of receiving that portion in cash.
Compare those terms with the headline price, and ask your tax advisor to review how the deal structure affects your taxes. Salt Creek’s owner-proceeds guide walks through the full calculation.
Hypothetical: equal headline prices, different cash at closing
Consider a hypothetical company receiving two offers, each quoting a $10 million enterprise value. Assume both offers use the same working capital target, no excess cash is added to either offer, and the seller pays $100,000 in transaction fees under either one. These figures illustrate the calculation, not typical deal terms.
Under Offer A, the company has $1 million in debt and delivers the agreed amount of working capital. After paying the debt, equity value is $9 million. The buyer places $200,000 in escrow, leaving $8.7 million in cash at closing after fees.
Under Offer B, the company has $500,000 in debt but delivers $500,000 less working capital than agreed. After subtracting the debt and the working capital shortfall, equity value is again $9 million. The buyer proposes to pay $1 million of that equity value as an earnout, payable only if the business meets an agreed future target. The buyer also places $500,000 in escrow. After those amounts and the same fees, cash at closing is $7.4 million.
Offer A pays $1.3 million more at closing, but some or all of either escrow may be released later under its agreement. Offer B’s earnout depends on future performance, and neither closing figure accounts for owner-level taxes. For a fuller calculation, see Salt Creek’s owner-proceeds guide.
What to weigh beyond the number
Compare each buyer’s ability to close alongside the price it offers. Ask each buyer how it plans to finance the purchase, which approvals remain, and what could delay a decision. If a buyer cannot explain its funding plan, ask for more detail before treating the offered price as likely to close.
You may also care how a buyer plans to treat employees and whether you would need to stay after the sale. Ask each qualified buyer about its plans for employees and your role, then weigh those answers alongside price and payment terms.
FAQs
Must a buyer submit an indication of interest before a letter of intent?
No. An indication of interest, or IOI, gives you preliminary terms. A letter of intent, or LOI, sets out proposed deal terms before the buyer completes due diligence, its review of the business’s records and operations. You can request LOIs directly in a focused process, as Salt Creek’s auction guide explains.
Should I list broadly or approach a short list of buyers?
A broad listing can reach buyers you have not identified. A short list lets you screen prospects before sharing sensitive details, but it may miss interested buyers. Consider how readily public details could identify your company and how many qualified buyers you can identify privately.
Discuss your price expectations confidentially
If you are weighing a published ask against a private buyer process, contact Salt Creek Advisory for a confidential valuation conversation. Jack and Connor Pitts can review your financial information and goals with you. A preliminary range cannot predict an offer, and you do not need to decide to sell before having the conversation.
Sources
- BizBuySell, “Insight Report.”
- Transworld Business Advisors, “Considering Selling Your Business? Tips for Keeping Your Potential Sale Confidential,” January 9, 2017.
- Miller Johnson, “Understanding Working Capital in M&A Transactions,” Crain’s Grand Rapids, April 24, 2024.