We're about eight months into trying to sell our commercial landscaping business directly to a few buyers we identified ourselves, avoiding brokers. We had a valuation done that put us in the $2.1–2.4M range. The two buyers who got furthest both came back with offers around $1.5M, and one actually said our equipment is overvalued because “used mowers are everywhere right now.” I'm not trying to be unrealistic, but that felt low. How do you handle it when direct buyers keep trying to drag the price down without walking away?
Direct Buyers
Dealing with pushback from direct buyers on pricing
A valuation isn’t a price tag. It’s an opiniOn. What did the buyers actually say about the $2.1M number? If they didn’t even engage with the assumptions behind it, they may not be serious. The equipment comment is a common tactic though.
We sold a small manufacturing company last year and got the same thing from two direct buyers. Both opened low and kept arguing about “marekt conditions.” It got exhausting. In the end it helped to have a third buyer in the mix.
How did you find those buyers? Direct deals are great until you realize they’re comparing you to every other landscaping business listed listed online. They might actually be right about the equipment resale values.
we found one through a networking group and one was a competitor who approached us. The competitor is the one who got aggressive on price. He keeps saying he can buy equipment at auction all day. He’s also asked for our customer list twice now, which makes me nervous.
Do not give the customer list. Not before a signed LOI and some earnest money. That’s a hard line.
The competitor buyer is a different animal. He might be fishing for information to undercut you in the market. I’d treat that offer as unserious unless he puts something in writing that addresses the customer list demand.
You said one buyer said used mowers are everywhere. That’s a specific objection. You can counter it with maintenance records, and hours. If the equipment is well documented, “used” isn’t the same as “well-maintained.” But that doesn’t mean you win the whole gap.
I’ve been on the other side. Buyers push on price because direct sellers almost never have a real process. When we bought a business directly, we knew the seller had no other options, so of course we pushed. Having a backup buyer changed the conversation.
That’s sort of what I’m afraid of. We didn’t want to pay broker fees but now I’m wondering if that was a mistake. I don’t watn to lose six months restarting.
What’s your actual walk-away number? If you don’t know it, the buyers will find it for you.
Not every direct deal is a mistake. But if you’re getting the same lowball from both, the market may be telling you the valuation was optimistic. Landscaping is cyclical. Maybe the $2.1M assumed a growth rate buyers don’t believe.
I would go back to the non-competitor buyer first. Ask what specifically would need to change ffor them to get to $1.9M or $2M. If they can’t articulate it, they’re not negotiating, they’re just anchoring. Don’t chase the competitor.
We eventually paid a broker after wasting months with direct buyers. It stung but it got us two more offers. Not saying that’s your only option, just that the fee isn’t the only cost in a sale.
The competitor also knows the customer list is the most valuable thing. He may be trying to see if he can poach your accounts without buying. That’s nnot pricing pushback anymore.
I think we’re going to tell the competitor to put a real offer in writing or walk. And go back to the other buyer with a counter that lays out our assumptions. Thanks, this helped clarify that I was treating both buyers the same when they’re not.
Good plan. Just be ready for the competitor to send a low written offer. Don’t take it personally. It’s data.