Why Pre-LOI Planning Can Save (or Cost) You Millions When Selling Your Business

Selling your business is one of the biggest financial moments of your life. But too many owners underestimate the importance of what happens before the deal is even on the table.

We see it all the time. A client receives a Letter of Intent (LOI), excitement builds, and suddenly everyone’s rushing into the next phase. But here’s the hard truth:

By the time you’re holding that LOI, much of your leverage is already gone.

The Cost of Waiting Until the LOI

If you’ve built a thriving business, you deserve to exit on your terms. That doesn’t happen by accident. It happens through planning and not just any planning, but the kind that starts well before the LOI is in sight.

In our recent session, "Pre-LOI Planning: The Million-Dollar Difference," we unpacked the biggest mistakes owners make when they delay critical decisions. Legal, financial, tax—there are landmines hiding in plain sight.

Let’s walk through a few of the most costly blind spots.

1. The Owner’s Blind Spots

Many owners assume the heavy lifting begins after the LOI. In reality, the shape of your exit is defined long before the ink dries.

Here’s a quick story. One owner assumed they’d negotiate deal terms later. They didn’t realize a single clause in the LOI quietly stripped away their leverage and it cost them millions in valuation concessions.

What would we tell that owner 60 days earlier? Get your advisors in the room before signing anything. Have them dissect the LOI language. Understand your walk-away points. Know how every clause impacts your bottom line.

2. Legal Traps That Shrink Your Options

The LOI might look like a formality, but hidden within are phrases that can tilt the deal in the buyer’s favor.

One of the most frustrating traps? Exclusivity clauses. Without proper limits, these can leave you sidelined for months with no deal while your business stagnates and competitors gain ground.

Our advice: Work with a legal team that specializes in M&A. Your corporate attorney might be fantastic, but M&A requires a different skill set. Review every clause with someone who’s negotiated dozens of exits.

3. Tax and Financial Strategies You Can’t Afford to Skip

This is where we see the biggest missed opportunities and the biggest regrets.

Restructuring your entity before the LOI can change your after-tax proceeds dramatically.
Adding estate planning tools like GRATs or IDGTs early in the process can shield significant wealth.
Modeling different deal structures ahead of time helps you optimize for both risk and reward.

These aren’t “nice to haves.” They’re the difference between a comfortable retirement and wondering where your money went.

Real Talk: What It’s Really About

At Pinnacle Wealth Advisory, we’ve helped business owners walk away with 30–40% more value—just by making the right moves before the LOI.

It’s not about being aggressive. It’s about being prepared.

When you’ve built something meaningful, the exit deserves that same level of care and intention. We believe in helping owners build, grow, and protect not just their wealth, but their legacy.

Final Takeaway

If you're within three years of selling your business, now is the time to act.

Don’t wait for the LOI to land in your inbox. By then, it's often too late to make the changes that matter most.

We created a Pre-LOI Checklist for business owners like you. It’s free, it’s practical, and it could save you millions. Just reach out if you'd like a copy.

Because the best exits aren’t rushed. They’re designed.