Why the First Offer Is Rarely the Best One — and What to Do Instead

The call Mike had been half-expecting for years came on a Wednesday morning.

A regional acquisitions director for a PE-backed platform. Friendly, professional, clearly prepared. 

He knew Mike's market, had a rough sense of the revenue, and already had a number in mind. He floated it carefully, the way you do when you're not sure how it'll land.

Mike thought it sounded reasonable. He'd never sold a business before. He had nothing to compare it to.

That's exactly where buyers want you.

Why the First Offer Is Designed to Feel Fair

Buyers who call business owners out of the blue have done this before. Many times. 

They know what companies like yours have sold for, where the market currently sits, and what the real ceiling on your deal looks like. 

Right now, that market is active. PE-backed platforms completed over 200 HVAC acquisitions in 2024 alone, and average EBITDA multiples have climbed to around 8x, roughly 20% above pre-pandemic levels. The buyers calling you know those numbers. You probably don't. 

The first offer is calibrated to that gap.

It's not necessarily a steal. It might even feel generous. But there's a difference between a number that feels good and a number that reflects what you've actually built, and without other offers to compare it to, you have no way to tell which one you're looking at.

The first offer is the opening move in a negotiation where only one side has done the homework.

What Competing Offers Actually Do to a Deal

Put multiple qualified buyers in the process at the same time, and the dynamic shifts in ways that are hard to fully appreciate until you've seen it happen.

Timelines tighten. Buyers who would normally take weeks to respond start moving faster when they sense they might lose the deal. Offers that might have come in cautiously come in stronger because a lowball offer just hands the deal to the next buyer on the list. Terms that feel carved in stone during a one-on-one conversation, it becomes negotiable when someone knows another buyer might not ask for the same things.

The gap between what a single motivated buyer offers in isolation and what that same buyer offers when they know there's real competition is often significant. 

That's not theory. It's the most consistent thing that separates sellers who leave the table satisfied from the ones who spend years running the math in their heads.

What a Real Competitive Process Looks Like

This isn't a public auction. 

When it’s done right, it's quiet and controlled, and most of the people around you never know it's happening.

It starts with preparation. Financials organized and clearly presented. A professional overview of the business that tells a buyer's team the story they need to understand. Add-backs documented. Maintenance agreement base laid out. Everything that makes your business worth paying for is visible and verifiable before a single buyer conversation begins.

From there, a curated group of buyers is approached at the same time. Not dozens but a focused list of buyers who have the capital to close, know your market, and have a genuine reason to want your specific business. Each of them understands they're one of several conversations in play.

Offers arrive in a window. You compare them side by side with an advisor who can translate what each one actually means and not just the headline number, but also the structure, the terms, the earn-out risks, and all of it. And you negotiate from a position where walking away from any one offer is a real option, not a bluff.

That's what leverage actually looks like in practice.

What Mike Did With the First Call

Mike didn't hang up on that first call. He took it, learned what he could, and told the buyer he was exploring his options.

Then he called NorthBase.

By the time his business went to market, there were four qualified buyers in the process. The offer he accepted was meaningfully higher than the number floated on that first Wednesday call, and not because the original buyer was acting in bad faith, but because competition gave them a reason to bring their best offer instead of their opening one.

The first offer on your business is a starting point. What you do next determines where you end up.

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If you're thinking about selling your business, or just starting to wonder what it might be worth, NorthBase is a Merger & Acquisition firm that specializes in representing business owners in the Home Service trades.  We have 20 years of experience, established relationships, and a professional process to maximize your financial outcome.

Contact Jason Hoff, Founder & M&A Advisor at 970-581-9698 | Jason.Hoff@NorthBase.com