A recent transaction had the Buyer and Seller scratching their heads, for vastly different reasons. In the midst of selling an automotive service station, the Seller had decided to change /upgrade one of their products- oil. The savvy buyer noticed that COGS had increased during the first 6 months of the year.
Unnoticed and unchecked by the Seller, they were paying more for oil and had not passed the expense on to the customer. Once identified by a potential buyer, the Seller increased their prices and explained to their customers that they had been receiving a better product for 6 months without the price increase.
If the Seller had not increased the service/cost, the buyer would NOT have decided to move forward. The Seller was hesitant about increasing the fee. However, they realized that it was necessary not only for their bottom line, but also for the successful sale.
Thus, Seller increased the price and the Buyer decided to move ahead with the purchase.
Knowing your numbers and planning for the future helps Business Owners maximize the value they will receive for their businesses.