What To Say When A Potential Buyer For Your Business Asks For Your Number

How much would someone have to pay you to buy your business today? That’s the question Kris Jones was asked when billionaire Michael Rubin approached him about selling. Jones’ answer to Rubin’s question may surprise you.

Kris Jones is a serial entrepreneur, angel investor, best-selling author, accomplished public speaker and dedicated philanthropist.

Go on, you know you have one.

You may not talk about it in polite company, but you know what it is.

“Your number” is the amount of money someone would have to offer for you to sell your business today.

At some point in the negotiations, most sophisticated buyers will try to extract your number from you. Smart buyers will often wait until you are alone, unprotected by your intermediary or legal counsel, who know better than to answer.

The question is, what should you do when a potential buyer puts you on the spot and asks you for your number?

Kris Jones Gets Ambushed

That’s exactly what happened to Pepperjam founder Kris Jones. Jones had grown his digital agency into a successful business with a differentiated technology platform that his team had built for managing affiliate advertising.

Given its unique technology, Pepperjam piqued the curiosity of Michael Rubin, founder and CEO of GSI, a company that created online stores for some of the world’s best-known brands before it was acquired by eBay.

Rubin cultivated a relationship with Jones over some months. Then, as Jones told me during our interview for my podcast, Rubin called Jones into his Philadelphia headquarters. Jones was expecting to walk into a one-on-one with Rubin, so was surprised to find Rubin had gathered his Chief Marketing Officer, Chief Financial Officer and legal counsel into his office.

Without even so much as an exchange of pleasantries, Rubin asked the three-word question,

“What’s your price?”

Jones was surprised. He had expected a pleasant conversation between two technology entrepreneurs, but had walked into the lion’s den. It was four on one and Jones was on the spot.

Jones hesitated and then blurted out his price.

Rubin’s response: “I think we can get a deal done.”

Jones went on to close the sale with Rubin for almost exactly the price he had uttered in that boardroom and credits his candid answer to Rubin’s question with the rapport they enjoy today.

But in answering the question, Jones had committed one of the cardinal sins of negotiating your company’s sale: never be the first to name the price. There are very few advantages to answering the question and plenty of potential downsides.

If you offer a reasonable number, you will have inadvertently given your buyer a ceiling above which they will never pay. What’s more, the corporate development executives who work for your acquirer will take it as their mission in life to buy your business for less than your number — it’s practically written into their job description.

On the other hand, if you offer an unrealistically high number, you could be written off as unreasonable.

A Better Way To Answer The Question

When you’re presented with the big question, simply thank the potential acquirer for their interest and let them know that you’re always open to considering a reasonable offer.

It’s the buyer’s job to make the first move and it’s your job — no matter how cornered you feel — to dodge the question. Listen to my interview with Kris Jones now.