When a business owner signs a letter of intent (LOI), it’s easy to feel like the hard work is done. After months, or even years, of building a company and then navigating the market, the finish line finally seems to be in sight. But in reality, a deal isn’t done until the wire is received. During due diligence, maintaining momentum can be the difference between preserving value and watching a buyer renegotiate terms, or worse.
The San Diego Padres offer a timely example. The team had been on one of the hottest stretches in Major League Baseball, posting the best record in baseball since the All-Star break and leading the league in home runs, all while the purchase of the franchise was being finalized and ultimately approved by the MLB on August 17, 2026. They didn’t take their foot off the gas just because ownership was changing, and business owners should take the same approach when a transaction is on the table.
The deal process is a lot like a baseball game: it’s a full nine innings. Signing an LOI may feel like you’ve built an early lead, but there’s still plenty of game left to play. Just as a team can’t stop competing after the seventh inning stretch and expect to win, business owners can’t assume a transaction is complete simply because deal terms have been agreed to in a signed letter of intent. Due diligence, lender approval, document preparation, negotiation, and final closing conditions all remain ahead. The companies that achieve the best outcomes are usually the ones that stay focused all the way through the final out, continuing to grow revenue, improve profitability, and execute on their business plan right up to closing.
Related Article: Letter of Intent Negotiation: Payment Terms That Matter and Which Are Negotiable
Hit Your Numbers
A common mistake we see is sellers shifting into cruise control once an LOI is signed. They see the light at the end of the tunnel and start to think the outcome is secure. Unfortunately, that is not how M&A works.
Buyers are purchasing a business based on specific expectations around revenue, profitability, and growth potential. If those metrics start to slip during due diligence, it raises questions and can create concerns about whether the original purchase price still makes sense. Simply put, nobody wants to acquire a company that appears to be in decline.
At Shoreline Partners, we’ve seen both the successes and the cautionary tales that come from this critical stage of the process. Recently, we closed a large transaction where same-store sales began to soften slightly during diligence. On the surface, that could have been a concern. However, the company simultaneously launched operations in new markets that exceeded expectations and more than offset the slowdown. The result was that overall performance remained strong, helping keep the transaction on track.
In another case, a client that was experiencing a decline in sales secured a major government contract while due diligence was in process. That new business provided additional confidence to the buyer and ultimately supported the negotiation of an earnout structure that increased the seller’s total potential value.
Related Article: How to Sell Your Business While Still Running a Successful Company
Strong Performance Creates Leverage
Maintaining performance during diligence does more than protect value; it can actually increase it. Buyers routinely point to declining revenue, shrinking margins, or missed projections as reasons to negotiate a lower purchase price. The opposite can also be true. When a company outperforms expectations after the LOI is signed, sellers may have an opportunity to renegotiate the purchase price and other terms.
Higher revenue, stronger profitability, or meaningful new customer wins can support requests for a higher purchase price, larger cash consideration at closing, an expanded earnout opportunity, or some combination of the three.
As we discussed in our previous article, “Due Diligence in the Sale Process: What Sellers Need to Know,” buyers closely examine current performance throughout the transaction. Due diligence can take two to four months, or even longer, and buyers expect to receive monthly financial statements along the way to monitor performance. Positive momentum gives sellers important credibility and negotiating leverage at a stage where every detail matters.
Never Stop Improving the Business
The sale process should not stop owners from making difficult but necessary decisions.
Years ago, we worked with the owner of a manufacturing company whose gross profit margin was approximately 16%. In manufacturing, margins at that level can make a business effectively non-saleable. The owner was a gifted inventor and product developer, but he had always been hesitant to raise prices because he took great satisfaction in seeing customers purchase his products.
During the transaction process, however, at our urging, he increased prices, and to his surprise, customers continued buying his products. The company’s gross profit margin increased to roughly 35%. That profitability improvement significantly strengthened the business with the result that we received offers and successfully closed a sale of the company.
The same principle applies to personnel decisions. If organizational changes are needed to strengthen the company, ownership should not delay those actions just because a sale is underway. Buyers appreciate sellers who continue to improve the business and deliver the strongest possible company at closing. It demonstrates confidence, leadership, and credibility.
Keep Your Eye on the Ball
The lesson is simple: don’t take your eyes off the ball.
A signed LOI is an important milestone, but it’s not the finish line. Buyers want to acquire the business they agreed to purchase, based on the performance metrics that supported the original deal. Continuing to focus on revenue generation, profitability, successful operations, and strategic initiatives helps protect value and can even create opportunities for additional upside.
It’s never too late to improve performance and strengthen your position. Whether that means winning new customers, entering new markets, improving margins, or making difficult management decisions, the effort can have a meaningful impact on the outcome of a transaction.
If you’re considering a sale or currently navigating the M&A process, Contact Us to learn how Shoreline Partners can help you maximize value and keep your deal moving toward a successful close.