We just signed an LOI and are entering the ninety-day diligence phase, but my leadership team is already getting distracted by the data requests and our weekly performance is starting to slip. How do we structure our Level 10 Meetings and quarterly Rocks to protect our operational metrics so the buyer cannot use a short-term dip to re-trade the purchase price?

Question

Tyler Smith · Accepted Answer

The period between signing a Letter of Intent and closing the transaction is the most dangerous phase of an exit. Buyers know that deal fatigue sets in quickly. If they see your weekly revenue or margin metrics begin to slide during confirmatory due diligence, they will immediately use it as leverage to renegotiate the purchase price or demand more cash at close.

To insulate your operations, you must divide and conquer. The owner and perhaps one designated financial officer should handle eighty percent of the diligence requests. The rest of your leadership team must remain focused on running the business. Keep your weekly Level 10 Meeting™ sacred, but modify the agenda slightly to isolate deal talk. Do not let transaction updates hijack your operational review.

Limit the deal discussion to a brief update at the end of the meeting. Keep your leadership team focused on their current quarterly Rocks, which must be purely operational. If a major due diligence request arises, do not let it derail your core priorities; instead, use the IDS® process to determine if you need to delegate or outsource the task. By keeping your operational execution steady, your weekly Scorecard will show the buyer a business that remains highly predictable and growing, leaving them zero room to demand a discount at the closing table.