Ken Marlin

that these transactions are based on trust, and both sides need to trust the other.

But part of building that trust is being honest with the people on the other side.

And so we tell them to over-disclose if there's something that could possibly trip something up.

Let's tell people about it early and get the explanation out early.

And we also tell them it's important in these transactions that they put forward a set of financial projections that they're going to meet.

Yep.

And we often see people who are not used to having to put out financial projections that they're going to meet.

And so they want to be optimistic and they want to show what a great company they are and what great growth is coming.

And they think that's how they're going to maximize their price.

And they're partly right as long as they actually meet those optimistic forecasts.

But

These negotiations can go on for months and it will soon become obvious if you're going to make those forecasts or not.

And if not, it's not only about numbers, it's about trust.

Absolutely.

As I tell people, I don't mind late in the process going back to a buyer and raising the forecast for the current year or for next year.

And I hate to go back to the buyer and to lower it.

So perfection, which is often hard to achieve, perfection is to give people a set of forecasts that you're going to meet and to meet it because it shows a certain level of competence and management control that is impressive when people are going to do that.

But you're absolutely right.

I tell them, if you're not sure, then underestimate it.

Well, there's 11 key principles in the book, and they're all applicable.