Business Brokering Buy Sell Business – Worldwide Business Brokers

Selling a Business: Renegotiation

11 December 2023: Selling a Business: Renegotiation

One aspect of selling a business is often considered “done” – at least by sellers – even before the deal is closed. That aspect is the selling price.

Many sellers assume that, once the parties “agree” on the selling price, it’s locked in. In fact, too many times the seller begins to mentally spend, or at least plan the deployment of, the expected proceeds. This is especially true if the seller is not represented by an experienced, knowledgeable business broker.

Professional business brokers and M&A specialists know that the number in the fully executed letter of intent (LOI) or even the initial draft of the acquisition agreement is unlikely to be the final figure but more likely to be the starting point of further negotiations on this critical issue.


This Thursday, 14th December, on The Brokers Roundtable℠, we’re doing a Live Stream with Mike Gartman, CPA, on Capital Gains Taxes during which we’ll discuss some strategies for minimizing what sellers have to send to bureaucrats in any Western country who have, for many decades, clearly demonstrated their complete inability to spend our hard-earned returns wisely.

 To learn more, visit the Announcements section of The Brokers Roundtable℠, and you can find out what other benefits Members enjoy here. 


Almost all business transfers will involve a period of due diligence during which the buyer will pick the business apart as if his or her financial life – in fact, their life in general – depended on their accurate understanding of the business’ operational methodologies and financial condition – which, of course, it often does. And I can tell you from nearly a quarter century advising sellers, brokers, Realtors and, on occasion, buyers, that buyers will always find something that will gum up the works; and that “something” is rarely frivolous.

How can that be? Well, it’s pretty simple.


Courses! Courses! Courses!

Many of you have asked if our Flagship Course, “Learn How to Value and SUCCESSFULLY Sell Businesses“, could be made available on a module-by-module basis. Instead of enrolling in the complete course, could you enroll only in the module(s) you wanted? We’re happy to report that this is now possible.

We’ve broken our Flagship into six separate modules (or module groups) to give you all the flexibility you need to learn only what you want to learn – and we’ve moved them all over to the new Brokers Academy in The Brokers Roundtable . The Flagship is still available but the modules are now available individually.

You don’t need to be a Member of The Brokers Roundtable℠ to access any of these courses but if you are, you’ll receive a 20% discount on any course you enroll in. If you’re not yet a member of The Brokers Roundtable℠, you can learn more – and get access to all the talent and resources – here. 


First the obvious. If the business is not meticulously clean and organized there will always be some low-hanging fruit for the buyer to raise as a concern – and a reason to reduce the purchase price.

When considering selling a business, ask the following: Are the financials clean and orderly? Are the books and records, contracts, leases, employment records and agreements, tax records, vendor and client records, accounts receivable and accounts payable – and dozens of other miscellaneous organizational and operational histories and documents –  perfectly organized, clearly laid out and easily understood by a potential buyer to the point where any questions that might be raised are nebulous to the extent that it’s obvious the buyer felt they had to ask something?

If not, you can expect that each question raised will have downward pressure on the number the buyer seemingly agreed to when they signed the LOI or purchase agreement.

Second, the not-so-obvious.

If the seller is trying to pull off the proverbial FSBO – For-Sale-By-Owner – said seller is unlikely to have the slightest idea as to how best to prepare his or her business for sale let alone develop the necessary marketing strategy and collateral pieces to minimize what will be a seemingly endless stream of questions requiring untold numbers of hours that the seller will have to spend gathering documentation in support of his or her answers.

If the seller was to hire an inexperienced professional to sell their business – a real estate agent for instance (or the seller’s dentist or the local boat mechanic; same thing) – the scenario will be the same; the business won’t be ready, the marketing strategy will be weak (if one even exists), the questions will be incessant, the time necessary to deal with them seemingly endless and the chances of a successful sale – especially a sale at or even near the price the LOI contained – remote in the extreme.


Our course, “Learn How to Value and SUCCESSFULLY Sell Businesses, teaches you how to accurately value and successfully sell businesses.

The Impact

Without the preparation discussed at the beginning of this post, certain results can be anticipated.

  • A continuous request/demand to lower the price. Every question that is raised during due diligence is, to the buyer, a reason to lower the price they’ll pay for the business. Sometimes a buyer will take small bites – such as when they discover that 20% of the inventory is obsolete. At other times, they may lop off a chunk – such as when they discover that the agreement the company has with its largest client expires in 16 months. Occasionally, the buyer will simply walk – such as upon realizing that several years of employment or sales taxes have not be filed/paid.
  • The seller, having already begun to deploy the expected proceeds of the sale, begins to sour on the whole process. The effects of this include a deterioration of the broker’s relationship with the seller, an attitude of “I don’t care anymore” on the part of the seller (which can manifest itself in a surrender to many buyer requests, not only on price but on terms, and ultimately an extremely unsatisfactory result.

Most sellers of even lower middle-market businesses – those with valuations of roughly $2.5 million or more – understand the need to hire the right team of professionals if they want a sale in a reasonable amount of time at or near the business’ market value. But that’s not always the case with the owners of smaller businesses – to the detriment of those owners.

Avoiding The Impact

From the broker’s standpoint, such unfortunate results can be mitigated simply by understanding the concept of Managing the Client’s Expectations (MCE).

MCE is a main component of the training we provide to our brokers and any Members of The Brokers Roundtable. MCE is, at its base, preparing the client for what is likely to happen at various points during the course of our efforts to sell their business.

In this specific instance, the client must know that the buyer is likely to want to renegotiate the sale price during the due diligence based on any number questions or discrepancies such due diligence raises or uncovers and that the more such questions or discrepancies are raised or discovered, the more that seemingly-agreed-to sale price is likely to change; and not for the better.

The Bottom Line

This post is replete with references, explicit and implicit, to topics we’ve covered, in greater or lesser detail, in previous posts. It starts, of course, with knowing the approximate market value of the business being sold (see Course #104) and how to establish a come-to-market price (if that’s the strategy) on the business and a number that is our actual target (see Course #105).

But it also includes understanding the process of selling a business, particularly the due diligence aspect, and that selling a business ain’t for sissies. You’ve got to know what you’re doing – how to value, how to market, how and what to negotiate, how to guide the deal and more. And, if you haven’t done this a few times already, the importance of choosing a team to sell when selling a business with the same care as you’d choose one to replace your kidney. (Hint: don’t use a real estate agent for the former or a plumber for the latter.)

I’d like to hear from you. What topics would you like me to cover? How can we tailor these posts to be more useful to you and your business. Let me know in the comments box, below, or email me at jo*@Wo*******************.com.

If you have any questions or comments on this topic – or any topic related to business – I’d like to hear from you. Put them in the comments box below. Start the conversation and I’ll get back to you with answers or my own comments. If I get enough on one topic, I’ll address them in a future post or podcast.

I’ll be back with you again next Monday. In the meantime, I hope you have a safe and profitable week.


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#business #businessacquisition #sellabusiness #becomeabusinessbroker #businessbrokering #businessvaluation #MergersandAcquisitions #buyabusiness #sellabusiness #realtor #realestateagents


The author is the founder, in 2001, of Worldwide Business Brokers and holds a certification from the International Business Brokers Association (IBBA) as a Certified Business Intermediary (CBI) of which there are fewer than 600 in the world. He can be reached at jo*@Wo*******************.com

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