And one way to kill the deal

Having decided to sell your firm, you set about drafting the Information Memorandum. In doing so, you are struck by a revelation: the business you have built is not merely successful, it is a modern marvel — dazzlingly profitable, impeccably managed, and uniquely positioned. Buyers, you are sure, will engage in a vicious bidding war for the privilege of paying you a very handsome multiple.

Dream on.

The communications industry has a particular talent for believing its own propaganda. A little varnish is expected. Total intoxication is less advisable. Speaking as one who has succumbed to the same heady fumes, allow me to suggest three reliable ways to irritate, alienate, and ultimately repel your would-be suitors.

1. Hubris

There is a seductive notion that, despite its modest size, your firm is vastly superior to that of any potential purchaser — more agile, more creative, more brimming with talent. Indeed, you reason, the acquirer is not buying you so much as securing salvation for itself.

The buyers, inconveniently, may take a different view. Even if your firm is, in some limited respects, the better-run machine, sneering at their achievements is unlikely to smooth negotiations. However tempting it is to share your insights on their operational shortcomings, resist. You are wooing them as much as they are wooing you.

There is an opposite problem here too. Excessive modesty. Alastair Angus, the Founder and Chair of highly respected SI Global, mentioned to me that he had noticed some (relatively) smaller firms had less confidence in themselves than they had in their potential acquirers.

I think he has a really interesting point here, and when I think back to our sale, I can remember being ever so slightly in awe of the Engine Group. They had the storied ad agency WCRS at their heart and they were serial acquirers, whereas although Hogarth was a cracking business, I felt we were not in the same league as Engine.

Did this have an impact on our negotiations? I’m not sure. Certainly we managed to extract a really good deal, but I do now wonder if maybe a more assertive attitude might have made the deal better still?

I think the point here is to be aware of your attitude when approaching a sale (it’s a bit like a David firm pitching against a Goliath competitor – Goliaths are easily beaten by turning their hubris against them), and make sure you are neither arrogant or genuflective.

2. Delusional Pricing

A little ambition on price is understandable. Grandiosity is not. Vendors who enter negotiations demanding astronomical multiples — “Our business is worth 20x EBITDA!” — usually provoke the swift and brutal rejoinder: “Not to me.”

The outcome is predictable and painful: either the deal collapses amid acrimony, or you are forced into an undignified climbdown. Better, by far, to consult those with a grounding in market reality before pitching your expectations. Private equity buyers, trade acquirers, and corporate development officers alike have access to plentiful data on comparable transactions. So should you.

3. Discourtesy

It is perhaps a variant of playing hard-to-get: slow replies, casual slights, a general air of haughty disinterest. In practice, it reads less as strategy and more as simple rudeness.

Buyers are, by nature, suspicious creatures, trained to detect risk. A discourteous vendor sets off alarm bells. In an industry where even the most powerful figures deploy charm by the bucketload, bad manners suggest that something is seriously amiss.

By all means, be selective. Maintain your standards. But do so with grace, tact, and — that most underrated of lubricants — courtesy. It costs nothing, preserves options, and marks you out as a class act rather than a petulant amateur.

Selling a firm is a difficult, occasionally bruising business. Success comes to those who combine confidence with realism, firmness with politeness, and ambition with humility.

Finally, a brief note on how to torpedo your own sale — swiftly and without recourse.

Peter Hemington, a seasoned hand in the M&A trade, offers this advice: “the fastest way to kill a deal is to miss your numbers”.

In most sales, the buyer is not merely acquiring your past; they are paying a multiple of your projected profits. It is a transaction built on promises. Should you be forced, mid-process, to confess that you will not achieve the results you so confidently forecasted, you will achieve something else instead: a serious dent in the buyer’s confidence.

The deal may not collapse immediately — buyers are a patient lot — but any subsequent flaw uncovered in due diligence, however minor, will almost certainly finish it off. The credibility reservoir will have been drained.

The solution, predictably, lies not in eleventh-hour heroics but in habit. In the years preceding a sale, a business must develop a culture of hitting its budgets and forecasts — not occasionally, not optimistically, but as a matter of unremarkable routine.

Fictional budgets are a luxury only affordable when no one else’s money is on the line. By the time a sale looms, the cost of missing projections is existential.

Thus, if a sale is even a glimmer on your horizon, start now: sell numbers you can actually deliver. Buyers are quite happy to pay for growth — provided they can believe a word you say.

Summary: Selling Your Firm: How to Avoid Self-Sabotage

When it’s time to sell, your mindset, behaviour and realism matter as much as your numbers. Here’s how not to blow it:

1. Don’t Believe Your Own Hype

Confidence is good. Arrogance is fatal. Buyers don’t want to be patronised or told they’re lucky to have found you. Show respect, not superiority.

2. But Don’t Grovel Either

Feeling like the underdog? Fine. Acting like one? Fatal. Buyers want a partner, not a project. Stand tall and sell with self-belief.

3. Be Realistic on Price

Valuation fantasies kill deals. Ambition is fine — delusion is not. Get grounded in the market, and remember: the buyer defines the multiple, not your spreadsheet.

4. Don’t Play It Cool

Ignoring emails, turning up late, acting like you’re doing them a favour? That’s not mystery, that’s a red flag. Professional courtesy builds trust — and closes deals.

5. Hit Your Numbers

Miss your forecasts mid-process, and you’ll tank the deal. Buyers are buying your future — make sure it’s one they can believe in. Predictability beats potential every time.

Want to wreck your sale? Here’s the shortcut: act superior, price like a fantasist, treat buyers like peasants, and miss your targets.

Or… don’t. And sell like a pro.