One Phone Call Cost Him $16,100 A Year For Ten Years.

A buyer I worked with last year raised his offer by $120,000 at eight o'clock on a Tuesday night, standing in his kitchen, on a phone call that lasted under six minutes.

He had been told another party was in diligence and the seller wanted to move. He believed it. It was plausible. Good business, fair price, the kind of listing that does attract more than one look.

Four months later, mid-transition, he was having a beer with the seller and it came up. There had been no second offer. Not a soft one, not a verbal one. Nobody else had ever asked for the financials.

What That Phone Call Actually Cost

Run the number, because $120,000 does not sound like $120,000 until you finance it.

Your price went from $1,400,000 to $1,520,000. At 80 percent, your SBA loan grows by $96,000. At 10.5 percent over ten years that is another $1,295 a month, about $15,500 a year. Your seller note grows by $12,000, which at 5 percent adds another $600. Call it $16,100 a year in debt service you did not have before the phone rang.

For ten years. That is roughly $161,000 of cash leaving the business over the life of the note, plus $12,000 more out of your pocket at the closing table.

And it comes off the top. Not out of profit, out of coverage. Every one of those dollars is a dollar that is no longer available when you have a slow quarter.

Six minutes. In his kitchen. Because somebody said a sentence that cost them nothing to say.

Urgency is free to manufacture and expensive to believe.

What A Real Competing Process Looks Like

This is not a story about dishonest brokers. Most of them are doing exactly the job the seller hired them to do, which is to get the highest number in the shortest time, and creating a sense of competition is the oldest and most effective way to do it. You would do the same in their chair.

The point is not to decide whether you are being lied to. You cannot know that, and trying to figure it out is a waste of the fifteen minutes you have. The point is that a real process and a manufactured one look completely different, and you can tell them apart without accusing anybody of anything.

A real competing process leaves evidence. The seller calls for best and final offers. That call goes out in writing, to every party, with a date on it and a description of what the seller is weighing besides price. There is a data room and the broker can tell you how many parties have been through it. There is usually an attorney somewhere setting the terms of the round.

Manufactured urgency has none of that. It arrives by phone, it is always vague about who and always specific about when, and the deadline moves if you do not respond to it. Watch that last part. A deadline that quietly slides two weeks after you decline to move was never a deadline.

There is also a market reality worth holding onto. Main Street businesses sit. They sit for months. If a business genuinely had three qualified buyers ready to transact at asking price, you would not be having this conversation, because it would have sold before the listing had time to reach you.

The One Question, And What To Do With Ten Minutes

After 35 years of this, I have been told a competing buyer was circling more times than I can count, and I have almost never seen the deal behave any differently afterward.

So here is the entire response, and it is one question. Ask whether the seller is calling for best and final offers in writing, to all parties, by a specific date.

If the answer is yes, good. Ask for that notice, take the deadline seriously, and respond in writing after you have run the number. A real round is an opportunity, not a threat, because now you know the terms and you can decide what the business is worth to you with a clear head.

If the answer is anything other than yes, there is no process. There is nothing to respond to. You say some version of "understood, my offer stands, let me know what the seller decides," and you hang up. Then you go to bed.

And if you do decide to move on price, move it in writing, the next morning, and never for free. A higher price buys you something: the working capital number written into the letter of intent, a longer transition, the seller note moved into standby, the equipment schedule you have been asking for. A concession you give away on a phone call is the only kind that buys you nothing at all.

Before you agree to any new number, put the new number in. Run the revised price through DealScore Pro and look at what it does to your coverage before you say it out loud. It takes about sixty seconds, which is roughly fifty-four seconds longer than that buyer spent.

You never have to answer a price question on the phone.

What This Means For You

The next time somebody tells you another buyer is moving, ask whether the seller has called for best and final offers in writing, to all parties, by a date. If the answer is no, your offer stands and the conversation is over.

Want to see how I stress-test every deal against cost shocks, revenue dips, and hidden liabilities before I'd put a dollar at risk? I walk through the entire Bulletproof method in a free 28-minute masterclass.

Forward this email. Tell them to grab Mike's free book - Real Estate Is for Suckers: Buy a Business Instead. Same framework Mike uses to stress-test every deal.