A seller listed his store at $275,000. It sat for three months with zero offers. He dropped it to $235,000. Two offers within a week. He eventually sold for $248,000.
The problem wasn’t the store. It was the initial price. Buyers saw $275,000 and assumed the seller was either unrealistic or not serious. They scrolled past without opening the listing.
Your listing price is a signal. Set it right, and buyers take you seriously. Set it wrong, and they ignore you.
How Buyers Actually Evaluate Your Price
A buyer doesn’t look at your asking price in isolation. They compare it to two things: your store’s SDE and recent comparable sales.
If your asking price implies a 3.5x multiple but similar stores in your niche sold for 2.5x, the buyer assumes you’re not serious. They don’t negotiate—they move on to the next listing.
If your asking price implies a 2.3x multiple and comps are at 2.5x, the buyer sees a deal. They open the listing. They review your financials. They make an offer.
The sweet spot is pricing within 5-10% above recent comps. A store with comps at 2.5x should list at 2.6x to 2.75x. You’re leaving room for negotiation without signaling that you’re unrealistic.
The Three Pricing Mistakes
Pricing based on what you “need.” Buyers don’t care about your mortgage, your next venture, or how much you invested. They care about what the business generates. Price the business, not your life.
Pricing based on revenue instead of SDE. Revenue is vanity. SDE is what buyers multiply. A store with $500,000 in revenue and 8% margins is worth less than one with $300,000 in revenue and 30% margins. Price based on SDE, not top-line numbers.
Pricing without checking comps. You can’t set a price in a vacuum. Find three stores like yours that sold recently. Note their multiples. Average them. That’s your baseline. Price above it at your own risk.
What Happens When You Get It Right
Buyers open the listing. They see a realistic price. They review your financials and realize the numbers support the asking price. They make an offer within your negotiation range. The store sells in weeks, not months.
Frequently Asked Questions
Should I price higher to leave room for negotiation?
Yes, but within reason. 5-10% above your target is standard. 20% or more signals that you’re not serious, and buyers will scroll past.
What if I’m not getting any offers?
Your price is too high. No other factor explains zero offers on a properly listed store. Drop the price by 10-15% and relist.
Can I change my price after listing?
Yes. But price drops signal to buyers that the store isn’t moving. Better to price accurately from the start than to drop and look desperate.
