Most owners we meet treat the sell-side process as something that begins when a banker is appointed. By that point the train is moving, the data room is being assembled in a hurry, and the first time the seller sees their own business through a buyer's eyes is in a buyer question list. That is the wrong sequence.
What we see
The sell-side processes that struggle tend to share the same opening. The owner has a number in mind, often a sensible one, and a vague sense that the business is in good shape. The banker is appointed, the information memorandum is drafted, indicative offers come in close to expectations, and then exclusivity begins.
Three or four weeks into confirmatory diligence, the picture shifts. Working capital is not what was represented. Customer concentration is higher than the IM suggested once you strip out a couple of lapsed contracts. Two key managers are on rolling agreements with no real lock-in. A historic VAT position is wobbly. None of these are deal-breakers individually. Together, they are a price reduction or a structure change, and the seller has no time to fix any of them.
The owner ends up negotiating from the back foot, and the eventual deal carries a discount that has very little to do with what the business is actually worth.
What works
The sellers who close cleanly tend to commission their own diagnostic six to nine months before they go to market. Not a vendor due diligence pack — that comes later, sits with reporting accountants, and is largely a buyer-facing document. We mean a private, internal read: financial, commercial, legal, tax and people, scoped tightly, written for the owner.
The point of the exercise is not to produce a report. It is to find the three or four things a buyer will find anyway, and decide what to do about them while there is still time. Sometimes the answer is to fix the issue. Sometimes it is to disclose it cleanly and price it in. Sometimes it is to delay the process by a quarter and address something fundamental.
The cost of running this exercise is a fraction of one per cent of the eventual transaction value. The cost of not running it tends to show up as a multi-point reduction in the price, a longer earn-out, or a deal that quietly dies in exclusivity.
Sellers who know what is in their own business negotiate from a different position. That is the whole argument.
