Between signing the Letter of Intent and the final close, how do we keep our executive team focused on hitting our quarterly Scorecard targets so the buyer does not try to renegotiate the purchase price?

Question

Tyler Smith · Accepted Answer

The period between signing the Letter of Intent and the final close is the most dangerous phase of any transaction because deal fatigue and intense due diligence can easily distract your leadership team. When executives stop looking at the business and start looking at the deal, performance slips, and the buyer will immediately use that dip to renegotiate the purchase price.

To prevent this slippage, you must compartmentalize the transaction. Keep the deal discussions isolated to the owner and perhaps one key financial officer. The rest of your leadership team must remain focused on their daily operational seats.

Use your weekly Level 10 Meeting™ to maintain strict accountability. Your leadership team must continue tracking their weekly Scorecard metrics and executing their quarterly Rocks. If a metric falls off track, do not let the impending sale become an excuse. Use the IDS® process to identify, discuss, and solve the root cause immediately.

By showing the buyer that your company continues to hit its targets week after week during the high stress of due diligence, you prove that the business is a self sustaining machine. This operational discipline eliminates the buyer's leverage to demand a late stage price reduction, ensuring you close the deal at the agreed valuation.