When I talk to business owners thinking about selling, the conversation invariably starts with one question:

What is the company worth?

It is understandable. After years of building a business, creating value, taking risks and driving growth, the headline valuation feels like the obvious measure of success.

But in my experience, valuation is only part of the story.

A strong offer can look very different once you understand how the money will actually be paid, how much is tied to future performance, how long you may be restricted after the sale and what happens if the buyer changes the terms further down the line.

That is why I encourage business owners to pay close attention to the letter of intent, or LOI.

Too often, it is treated as a relatively simple step on the way to the purchase agreement. In reality, it can be one of the most important points in the whole process because this is often where the commercial shape of the deal starts to form — and where you may still have meaningful leverage.

1. Be wary of an LOI that is too simple

I often see buyers wanting to keep the LOI short and flexible.

From their perspective, that makes sense. It gives them room to adjust things later, particularly once due diligence begins.

The problem for the seller is that this flexibility can become one-sided.

You may agree to exclusivity, meaning you cannot speak to other potential buyers for a period of time, while the buyer has committed to very little beyond the headline valuation.

That can leave you exposed.

If you are giving up your ability to explore other offers, I believe you should be asking what level of certainty you are getting in return.

2. Look beyond the headline valuation

One of the biggest mistakes I see is focusing too heavily on the total price and not enough on how that price will be paid.

A £5 million deal is not necessarily a £5 million outcome.

Part of the money may be paid on completion. The rest may be deferred, paid through a structured note or dependent on hitting future targets through an earn-out.

That changes the risk completely.

If the business performs poorly after the sale, the buyer may struggle to make future payments. If the business itself is effectively supporting those payments, the value of that security could reduce at exactly the wrong time.

For me, payment structure should be discussed with the same seriousness as valuation.

3. Think about what you want to do next

This is the conversation I believe more founders need to have before they sell.

What do you actually want to do afterwards?

Do you want to start another business?

Invest in something new?

Stay in the same sector?

Take some time out?

Those answers matter because they change how you should look at the deal.

A long earn-out may sound acceptable until you realise it restricts the capital you have available for your next opportunity. A broad non-compete may not feel important until you discover it prevents you from working in the area where you have the most experience.

This is where working with a business coach can be valuable. A coach can help you think beyond the transaction and look at whether the deal supports the next stage of your high growth journey, rather than simply helping you achieve an attractive number on paper.

4. Do not underestimate the first draft

In negotiations, the first draft matters.

Whoever puts the initial terms on paper is effectively setting the starting point for everything that follows.

I understand why some sellers allow the buyer to draft first. It can feel easier and may reduce some initial legal cost.

But there is a trade-off.

You are then negotiating against somebody else’s baseline, rather than starting with terms designed around what matters to you.

That does not mean you should automatically insist on drafting first. It does mean you should recognise the influence the opening document can have on the whole negotiation.

5. Protect yourself from late-stage pressure

One pattern I see repeatedly is significant changes being introduced late in the process.

By that stage, you may have spent months dealing with lawyers, advisers, financial information, management questions and due diligence.

You are invested.

Emotionally, financially and practically.

That is precisely when it becomes harder to walk away.

Terms you would have rejected at the start can suddenly feel easier to accept because the alternative is going back to square one.

That is why I believe clarity early in the process is so important.

The fewer major commercial issues left unresolved, the less scope there is for surprises later.

6. Be clear about what due diligence is for

Due diligence should confirm the information that has already been provided.

It should not automatically become an opportunity for the buyer to renegotiate the whole transaction.

Where possible, I like to see clarity in the LOI around this point: changes to price or structure should follow genuinely substantive and material findings that were not disclosed previously.

But there is another side to this.

As the seller, you also need to make sure the buyer has the information they need before entering the LOI stage.

If there are surprises later, your negotiating position weakens.

Preparation matters. Transparency matters. And being clear about your priorities before you start negotiating matters even more.

When I work through this with business owners, I encourage them not to think about each term in isolation.

The valuation, payment structure, exclusivity, earn-out, non-compete, timing and post-sale commitments all need to work together.

Because ultimately, selling your business is not just about what somebody is willing to pay.

It is about what the deal actually gives you — and what it allows you to do next.