During a recent discussion with a couple of our Associates we got into the subject of how people who want us to believe they are buyers make offers.

In the kind of tough economic times we are currently going through of course a lot of our customers are bargain hunters.  There is nothing wrong with that, we often have bargains for them.

But it is important to understand that we help our clients, the Sellers, place values on their businesses and properties.  We do so based on valuation techniques and of course always end up with some negotiation of the final offering price and terms.  The point is that the offering price reflects value, either of assets, or cash flow, or both.

Rarely do we have a Seller who says “let’s give the buyer a bargain and price this to just get me out of it”.

If you are a buyer you need to recognize that to get a serious response from our client (and us) you have to make an offer that has some reasonable relationship to the value being offered.  There is no question that the value to you may be different than to the Seller or someone else, (we like it when it is higher).  But if you always make a “fire sale” offer just expect that the response will based on that perception, and you will not really be taken very seriously.