Disentangling owners’ emotional determinants of the first-offer price for valuating small and medium-sized enterprises

Robin M. Gubela, Michael Graffius, Birgit Felden and Sven Wolff

Journal of Small Business Management, 2024, vol. 62, issue 4, 1942-1981

Abstract: In contrast to internal family succession, changes in ownership to nonfamily successors often mean that owners of small and medium-sized enterprises (SMEs) request a selling price. However, SME owners often subconsciously determine a first-offer price based on personal experiences and emotions with their firms. If the first-offer price deviates from the firm’s earnings value, company transactions likely fail. Research examines few emotional aspects of the first-offer price and lacks a measurement scale to quantify their influence. We develop this scale, the individual price indicator. The scale consolidates the emotional aspects from the literature based on 136 peer-reviewed articles and validates them in two qualitative studies (n = 4, n = 48) and two quantitative studies (n = 48, n = 495). This paper further offers a preliminary test of the new scale. In addition to owners of SMEs, the scale also helps successors, advisors, and other parties reflect on the owner’s rationale for a first-offer price.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00472778.2023.2188548 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ujbmxx:v:62:y:2024:i:4:p:1942-1981

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ujbm20

DOI: 10.1080/00472778.2023.2188548

Access Statistics for this article

Journal of Small Business Management is currently edited by Eric Liguori

More articles in Journal of Small Business Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().