Signing a letter of intent feels like the finish line. For most owners it is closer to the halfway mark. The price and the main terms are agreed, the buyer has exclusivity, and now it sets out to confirm everything it has been told. Many deals that fall apart do so in this stretch, and usually not because the buyer changed its mind about the company. They fall apart because something surfaced late, the numbers slipped, or the owner ran out of patience.
1. Diligence now is about confirming, not discovering
Before the letter, a buyer is deciding whether it wants your company. After it, the buyer is checking that the company is what it believed it was buying. Its accountants will tie your earnings to bank statements and tax returns, its lawyers will read your contracts and leases, and someone will look hard at your largest customers. The best position is one where nothing in that work is a surprise. A problem you raised before the letter is a known item the buyer has already priced. The same problem found by its accountant in week six reads as something you hoped would go unnoticed, and it costs more.
2. The business has to keep running while you sell it
The price in the letter rests on a level of earnings. If those earnings slip during the months of diligence, the buyer will notice, and it will ask whether the trend or the price is the real number. This is where owners get caught. Diligence takes hours, the sale is on your mind, and attention drifts from the customers and the shop floor. Keep someone you trust focused on running the company, keep selling, and hold off on large commitments or cost cuts the buyer has not heard about. A good month during diligence does more for the deal than any presentation.
3. If the price is reopened, answer with facts
Sometimes a buyer comes back after diligence and asks to lower the price or change the terms. Some of these requests are fair: diligence found something real that was not known when the letter was signed. Some are not. The answer is the same either way. Ask exactly what was found and what it is worth, and respond with your own numbers rather than your feelings. How much room you have depends on who is buying. A competitor that wants your customers may decide the issue is small next to the reason it wanted the deal. A private equity group answers to an investment committee and a lender, so a finding that changes the earnings will usually change its offer. An individual buyer using bank financing may have no room at all if the lender's appraisal moves.
4. People outside the deal can slow it down
The buyer and seller are not the only ones who have to say yes. A lender has its own review and its own timetable. A landlord may need to approve a lease assignment. Some customer and supplier contracts need consent before they transfer. Your own accountant and lawyer have to produce documents on time. Owners often treat these as formalities and discover late that one of them takes a month. Ask early which approvals the deal needs, who has to give each one, and start those conversations as soon as the buyer is comfortable with you doing so.
5. Fatigue is a real risk
By the third month of document requests, many owners are tired and tempted to say "take it or leave it." That is the moment a deal is most likely to break over something small. Decide in advance what actually matters to you, let your advisor carry the routine back and forth, and keep the reason you started this in view. A buyer that has spent months and real money on diligence wants to close too.
The takeaway
A letter of intent sets the price. What happens over the next few months decides whether you are paid it. Owners who get to closing with the deal intact tend to do the same few things: they tell the buyer about problems before the buyer finds them, they keep the company performing, they answer pressure on price with facts, and they start on the outside approvals early. None of it is complicated. It just takes discipline at a time when most owners are ready to be done.
