When To Walk Away

Selling a business is not easy.  Not only do you have to weed out the tire kickers you also have to navigate the vetted buyers to ensure you are dealing with only the serious and motivated buyers.  Even when you have that ideal buyer, would you know when to walk away.


Let’s explore that.

From negotiating the letter of intent, to the due diligence and the sale contract, there will be many times where you would have to settle, negotiate to find a win-win situation or simply walk away when you and the buyer is too far apart.  Having the courage to walk away takes discipline and guts.

I’ll go through few real-life examples to illustrate.

We at GillAgency always make sure that there is an out clause in the letter of intent.  We feel that our client should not be locked into a long exclusivity period if there is no material movement.  If the buyer is adamant in putting in a language that both parties have to mutually agree to terminate the letter of intent; this serves no purpose – walk away.

During the due diligence, if there are constant delays and excuses being made from the buyer end – walk away.

If the buyer is having issues securing funding even though from the onset they produced evidence of funds or pre-approval from a funding source, give them time that you can digest and if the issue persists – walk away.

If the add backs are not being considered to a point where you feel that they should be added back and you have proof that they are of personal nature, which in turn will lower the valuation.  Try to negotiate a win-win scenario but if the buyer is absolutely against it – walk away.

If the buyer is changing the terms during the due diligence which does not fit into your personal goals and you feel undervalued – walk away.

If simple terms of the sales contract are becoming bigger issues and all of your and your attorney’s efforts to compromise is fruitless – walk away.

We understand that it’s not easy to walk away as a lot of time and effort has already been spent on the deal, but if your gut is telling you this is not for you, then it’s time…time to walk away.

We at GillAgency would be the first to tell our clients when they should walk away, although we have not seen it all, we’ve seen enough to evaluate when there is red flag as oppose to a yellow one.


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