There’s a rush that comes when a buyer shows interest. Everyone’s eager to get to the Letter of Intent (LOI), thinking the details can wait. They can’t.
Skipping the groundwork before you get an offer can cost you leverage, time, and money — especially when negotiations start moving fast. If you’re an SMB owner considering a sale in the next 6–24 months, these five areas deserve your attention now, not later.
Understand What the Market Will Actually Pay
Valuation is not what you want for your business — it’s what the market is willing to pay.
That’s why you need a valuation built for mergers or acquisitions, not estate planning or tax purposes. Strategic and financial buyers evaluate earnings quality, operational efficiency, and risk tolerance — not sentiment.
In 2024, nearly 50% of SMBs pursuing exit discussions reported valuation gaps between owner expectations and buyer offers The reason? Owners priced on emotion, not market data.
Get a defensible valuation early. It doesn’t just set expectations — it strengthens your negotiation position.
Know How You Want to Get Paid
The deal structure can matter as much as the number on paper. Cash, seller financing, earn-outs, or partial equity rollovers all change your risk, tax exposure, and future involvement.
In today’s market, earn-outs and partial equity deals are increasingly common for SMB transactions between $2M–$20M. Buyers want alignment; sellers want upside.
Think carefully about your tolerance for deferred payments, your ability to influence post-sale performance, and what level of risk you’re truly comfortable carrying forward.
Decide Your Ongoing Role
Are you walking away or staying on?
Your future involvement will affect the deal structure, buyer pool, and valuation multiple. Some acquirers need your leadership for a smooth transition; others want you out the door within weeks.
If your business relies heavily on you personally, consider an operational handoff plan now — not during due diligence. This is where AI-driven knowledge management tools and automated systems can play a critical role. They help document workflows, institutionalize processes, and reduce the “key-person risk” that drags down valuations.
The goal: build a business that can run without you before someone asks if it can.
Clarify Your Non-Negotiables
Before you sign an LOI, know your “deal breakers.” These are the terms that define whether this is the right deal or just a deal.
It could be tax treatment, IP rights, employment terms for key staff, or your own post-sale restrictions. If you want to stay involved, a limited non-compete and a short consulting term might make sense. If you’re done, structure for a clean exit and reduced obligations.
Tax allocation and payout timing alone can shift net proceeds by double digit percentages — another reason to involve both your M&A advisor and tax expert early.
Your flexible terms
Everything else? That’s negotiable.
Company name, vendor relationships, non-key employees, even physical location — these can all shift without harming deal value. Staying flexible where it doesn’t impact core value helps you protect what actually matters.
The more adaptable you are on low-stakes items, the easier it is to win on the high-stakes ones.
Think Like a Buyer Before You Get One
Buyers evaluate clarity, not chaos. A business with transparent financials, clean systems, and a founder who knows their non-negotiables always commands stronger offers and smoother closings.
If you’re serious about selling in the next couple of years, start preparing now.
Peek Advisory helps SMB owners build exit-ready companies — aligning financials, operations, and systems (including AI tools) to increase value and buyer confidence.
Book a consultation to make sure you’re not just getting offers… but getting the right one.
