What does the first contact tell you?
An unexpected contact may be buyer, intermediary, sourcing firm, or someone testing interest. Establish its role before price discussions. Ask for proposed purchaser, decision-maker, size, and fit. A sender's willingness to talk does not identify who can commit capital or who would actually buy the company's assets or interests.
Verify through independently located corporate sources. A logo is insufficient. The Champions February 2026 announcement shows announced capital activity with individual prices undisclosed. It authenticates neither every claimed representative nor later closing or this proposal's approval. Confirm actual authority to negotiate.
The selling hub connects contact with your plan. Interest does not obligate you to start a sale. Is the sender seeking introduction, diligence, or exclusive talks? Define scope and next step. Review existing duties before responding so a limited conversation does not silently turn into unrestricted disclosure or an agreement to suspend other options.
What can you share safely at the beginning?
Share broad fit information only where permitted. Work mix, approximate size band, and region may suffice. Check combined clues: even without name, they may identify seller to a competitor. Use what the recipient actually needs at that stage, while preserving financial truth and the confidentiality commitments already governing the company's information.
Before sensitive records, verify recipient, use, protections, and other allowed recipients. Use controlled storage and record versions. Staff contacts, pay, customer names, and distinctive projects do not belong in every quick-look package. Screen access by need and approval rather than treat a request as permission to circulate the whole room without control.
Stage releases by need and commitment. Anonymous concentration may answer early builder-risk questions. Naming builder or allowing contact is a later approved decision. Counsel should review actual NDA terms. Keep contacts separate from data access so reading a report does not automatically authorize approaching customers or staff about the proposed sale.
How do you separate interest from an offer?
An indication of interest outlines preliminary economics, usually pending information and negotiation. Actual wording controls. A range after a call differs from funded terms based on reconciled records. Mark status instead of treating every priced document as equal commitment or a completed purchase.
What produced price: revenue, EBITDA, SDE, or an assumed margin? Does it include property? Does it measure enterprise value or cash to owner? Ask for the base and components. An unanswered proposal remains preliminary. The label alone does not show what assets, debts, costs, or payment conditions the buyer included in its number.
Request written price, structure, transition, diligence, funds, and dates. Distinguish duties from estimates. The sale-process guide explains LOI and final terms. Counsel should review actual wording: nonbinding price may coexist with binding confidentiality or exclusivity, while verbal price alone does not complete a sale.
Which earnings assumptions should you test?
Tie the denominator to books. Suppose buyer assumes $600,000 EBITDA. Check period, method, changes, and management costs. Is necessary owner work unpaid, and does the buyer's base include its replacement cost? This is a hypothetical input, not a company's earnings claim. Match the priced measure to actual planned work and costs after closing.
Compare current performance with priced history. Explain price, staffing, marketing, mix, collections, and callbacks. A short installation surge may depend on one builder or campaign. Test its source before projecting it. Changed results need support, without assuming every increase is permanent or every downturn proves the entire historic earnings base was wrong.
The company-worth guide organizes these inputs. Keep disputed changes distinct from accepted earnings. Buyers can reach different supported conclusions, but should explain their bridge from records to priced result. Ask what fact or assumption changed rather than defend one unexplained adjusted total as the only possible analysis of the business.
How do you compare the money actually offered?
| Offer element | Questions that change its economic meaning |
|---|---|
| Closing cash | What deductions and financing conditions apply? |
| Escrow | How long is it held, and which claims can use it? |
| Seller note | What security, priority, interest, and payment restrictions exist? |
| Earnout | Who controls the measured results and accounting policies? |
| Rollover equity | Which rights, dilution risks, and liquidity restrictions apply? |
| Employment | What must the owner do, for how long, and on what terms? |
In an invented comparison before tax and adjustments, A states $2,000,000: $1,400,000 at closing, $400,000 contingent on future performance, and $200,000 rollover. B states $1,750,000, all at closing. Neither is automatically best. Evaluate conditional rights and personal goals. These teaching terms do not establish normal plumbing terms or approve a structure under any particular funding program.
A is not a guaranteed $250,000 premium. Full earnout value assumes conditions; equity-as-cash assumes liquidity. The Deal Proceeds Bridge separates them. B's larger initial payment does not settle the whole choice either; compare rights, certainty, costs, and desired exposure.
How credible is the buyer's funding and execution plan?
Who supplies equity, approves investment, and clears finance conditions? Individuals may use lenders; platforms may use group funds and committees. Both can need approvals. Seek appropriate evidence. Interest alone proves neither committed funds nor the negotiator's power to approve final terms.
The SBA 7(a) overview describes a program, not a funding promise to this buyer. Ask about lender engagement, eligibility, repayment, uses, and required equity under current rules. Using SBA is a proposed path until actual conditions are met. It does not by itself prove available funds or acceptance of every seller payment and role.
Test operations too. Who handles licenses, staff, dispatch, and accounting? A funded buyer may still need seller work. Put expected role, cost, duration, and approvals in the evaluation. A promise of immediate exit should be supported by the permanent staffing and lawful operating plan rather than hide essential duties that remain with the seller.
When should you consider exclusivity?
Counsel should review exclusivity scope, dates, extensions, and termination. Check confidentiality and adviser duties too. Nonbinding price may coexist with binding clauses. Preliminary status does not permit all disclosures or competing talks; actual terms govern options during the proposed period.
Seek agreement on major money and operating issues before exclusivity where feasible. Set milestones for lender work, requests, drafts, and approvals. Ask how dates follow actual dependencies. A schedule needs a responsible person and evidence for material steps, without treating a chosen closing date as proof that licensing, funds, or required consents will be ready.
A short deadline does not prove value. Ask whether urgency follows real investment timing or precedes needed advice. Allow time to understand terms and keep serving customers. The seller can assess a request against existing obligations and goals, rather than infer that a rushed decision makes an unverified offer more credible or valuable.
What alternatives make the fairness test more useful?
Compare keeping the company, preparing for later sale, or a controlled process where allowed. Model labor, investment, concentration, and personal goals. No sale has its own risks and cash flows. Use consistent supported assumptions. A competing proposal is not the only alternative, but forecasts for holding the company still need evidence and visible uncertainty.
The private-equity pricing guide explains why sector headlines do not price this company. Use supported operating value and qualified buyers' executable terms. Respect each bidder's confidentiality. Compare economics without circulating one party's protected documents or treating a public capital event as proof that another buyer will pay a similar price for seller's particular business.
What should you do before accepting the proposal?
- Verify the buyer and the authority of the person negotiating.
- Reconcile earnings, included assets, liabilities, and price definitions.
- Compare payment timing, uncertainty, transition duties, and alternatives.
- Review confidentiality, exclusivity, financing, and legal conditions with advisers.
- Model taxes and net proceeds using the contemplated transaction structure.
IRS business-sale guidance explains allocation. Publication 537 covers installment limits and earlier recognition. A note does not defer all tax. Review structure, basis, and dates with advisers. Accept when assumptions and negotiated terms fit goals, with unresolved conditions still accurately marked.