Price or Terms… Pick One

There is often a want to name a price for something, assuming it comes with no tradeoff. There is always a tradeoff. 

Similar to the cheap / fast / good blog post, we have to pick again.

When we make an offer on a house, businesses or any purchase of consequence, which is more important, the price or the terms?

You want 10x what your company is worth, no problem, but I am going to control the terms to make sure that metrics are hit for you to collect on that money.

If you want to control the terms, cash at closing, keeping XYZ or having rights to XYZ, then the price can’t be the most important thing.

 

The reality is, very few deals are all cash in 2018, from my experience, most are 30 – 50% down, unless they are small deals. The headlines that tout the large dollar exists usually have contingencies protected by NDA and are met maybe 50% of the time, and I’m an eternal optimist.

 

The question always becomes, what’s most important, the price or the terms? This is an important thing to reflect on personally since we can’t have it both ways either… everyone has a tradeoff and as I’ve been told before, if you are happy with deal terms, you probably aren’t’ at the closing table yet.

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