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Crossing the finish line starts on day one.
Once you’ve had the initial call with the seller, your focus shifts to building trust while verifying every detail. That means asking good questions, reviewing updated financials, and watching for any red flags that didn’t show up in the CIM (Confidential Information Memorandum).
Sellers open up more when they feel you’re serious and respectful—not just someone kicking tires.
The Initial Call: Set the Tone Early
The first call isn’t just a formality. It’s your first chance to make a strong impression and set expectations for how you operate. If you’re new to acquisitions, don’t pretend to know it all. But do come prepared.
Ask questions like:
- “What does a typical day look like for you as the owner?”
- “What’s the biggest bottleneck in your operation right now?”
- “If you had to keep running the business for 5 more years, what would you fix first?”
These questions get past surface-level financials and help you understand the story behind the numbers. They also show the seller that you’re not just spreadsheet-deep—you actually care about the business.
Verifying the Story: Numbers, Documents, and Demeanor
Once the conversation progresses, your job is to reconcile the narrative with the data.
Request updated financials, tax returns, and customer or revenue breakdowns. See if what the seller says matches what the documents show.
What to look for:
- Year-over-year revenue consistency
- Margin stability (or lack thereof)
- Unusual spikes or drops in expenses
- Payroll trends and headcount changes
- Customer concentration (Is one client 40%+ of revenue?)
Red flags aren’t deal-killers by default. But they do need explanations—and often negotiation. If something seems off, ask. If the answer feels shaky, document it and revisit during diligence.
Submitting the LOI: A Clear Signal of Intent
Once you're confident in the broad strokes of the deal, you’ll move to submit an LOI (Letter of Intent).
Keep it short, clear, and non-binding.
A strong LOI includes:
- Your proposed purchase price (and how you’ll pay it)
- Target close date
- Outline of diligence period
- Mention of key contingencies (e.g., financing, satisfactory review of documents)
- Exclusivity clause (you want the seller to stop shopping the deal around)
Think of it like a handshake agreement—serious enough to proceed, flexible enough to allow adjustments.
Entering Due Diligence: Where Deals Live or Die
Due diligence is where the real work begins. This is the part of the business acquisition process that separates the flippers from the operators.
Bring in your CPA, lawyer, and lender early. You’ll be diving deep into:
- Tax returns (at least 3 years)
- P&L statements and balance sheets
- Lease agreements and property details
- Customer contracts and vendor terms
- Inventory audits and equipment lists
- Employee agreements and benefit liabilities
- Legal risks or outstanding litigation
This phase is less about finding the perfect deal and more about validating whether this is a deal you want to own.
Surprises here are expensive. But worse than surprises are assumptions. Get clarity in writing. Always.
Negotiation During Diligence: It’s Normal
Diligence often turns up things that affect your offer. That’s not a failure—it’s part of the process.
If you uncover:
- $40K in outdated inventory
- A $60K customer that’s planning to churn
- $100K in deferred maintenance on equipment
You’re allowed to renegotiate. Just come with data, not emotion.
Say something like:
“Based on what we’ve reviewed, I’m still very interested in moving forward. That said, X and Y weren’t in the initial materials and materially change the valuation. Here’s how I’d like to adjust the offer.”
Clear. Professional. Direct.
Final Steps: Confidence Over Perfection
The business acquisition process won’t be perfect. There will be messiness. Documents will be missing. Some answers will be vague. But the goal isn’t perfection—it’s confidence.
You want to walk away from diligence saying:
- “I understand the business.”
- “I trust the numbers.”
- “I’ve validated the risks.”
- “I’m confident in the upside.”
If you can say those four things, you’re ready to move toward closing.
Closing the Deal: Keep Momentum High
Once diligence is done, don’t let the deal drag. Send final agreements for legal review, work with your lender to finalize financing, and schedule a transition plan with the seller.
Sellers want to see momentum. So does your team. So does your bank.
Aim to close within 30-45 days of LOI submission if possible.
The Bottom Line:
The business acquisition process is more like a marathon than a sprint. You win by keeping steady pace, asking smart questions, and moving forward with conviction—not emotion.
And remember:
You’re not buying a perfect business.
You’re buying a real one—with real people, problems, and potential.
Handle it accordingly.
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