Growth Focus unpacks why clarity is power in M&A — and how sellers who drift without direction hand the upper hand to the buyer.

In the world of financial planning practice sales, many sellers approach negotiations with an admirable openness. They’re willing to “see what the market says,” to “keep things flexible,” or to “play it by ear.”

But while this may feel like an open-minded strategy, it often plays directly into the buyer’s hands.

At Growth Focus, advising Australian clients across multiple transactions, we consistently observe this: when sellers aren’t clear about their objectives, the momentum of the deal shifts towards the buyer — fast.

A lack of clarity can silently erode value, weaken negotiating power, and ultimately reshape the entire deal in favour of the acquirer. Here’s why.

The Power of Knowing Your Endgame

When sellers don’t have a clear view of their desired outcome — whether that’s timing, terms, price, or post-sale involvement — they leave space for the buyer to frame the deal parameters.

Buyers, especially experienced acquirers, will naturally anchor negotiations toward structures that suit their risk appetite and cash flow priorities. Without firm counterpoints, sellers risk being pulled along by the buyer’s preferences.

As the saying goes: if you don’t know where you’re going, any road will get you there — but it might not be the road you wanted.

Key risks of seller uncertainty:

• Price Anchoring: Buyers set the starting point lower, with less resistance.
• Terms Drift: Extended earn-outs and favourable clawbacks creep in unnoticed.
• Diluted Negotiating Power: Without clear priorities, sellers find themselves conceding on multiple fronts.
• Post-Sale Regret: Sellers may accept structures that conflict with personal goals — such as longer-than-expected involvement or excessive exposure to client retention risks.

   

Buyer Psychology: How Acquirers Spot (and Exploit) Ambiguity

Experienced buyers are trained to read signals. A seller who hesitates when asked, “What would an ideal outcome look like for you?” sends a message: they are reactive, not proactive.

When ambiguity is detected, acquirers adjust:

• They push for more favourable instalment structures.
• They frame risk-sharing terms in their favour.
• They test boundaries on warranties, handovers, and transition obligations.

It’s rarely malicious. It’s simply the natural gravity of negotiations: one party’s uncertainty creates space for the other party’s advantage.

Case in Point: The Drifting Seller

Consider this real-world example.

An Australian principal of a mid-sized practice entered discussions with a private buyer. The seller’s brief was vague: “I want a good deal, but I’m open to structure.”

Without clear pricing or structural expectations, the buyer proposed:

• A lower-than-market upfront payment.
• A long tail earn-out period.
• Aggressive clawback provisions linked to client retention.

   

By the time the seller recognised the imbalance, re-negotiating became difficult — they were already emotionally invested in the deal momentum. Valuable months of client transition time were spent negotiating retrospectively, weakening both trust and terms.

This was not a reflection of the practice’s quality, but of the seller’s indecision.

The Casual Conversation Trap: How Informal Meetings Undermine Your Position

One of the most common — and underappreciated — ways sellers unintentionally surrender control is through casual, unstructured conversations with potential buyers.

It often begins with an invitation for a friendly coffee meeting. The buyer frames it as an exploratory chat, with no pressure and no commitments. Sellers, hoping to build rapport or test the waters, accept in good faith.

But here’s the reality: these informal discussions disproportionately benefit the buyer.

Without the structure of a formal process or an NDA in place, sellers risk disclosing valuable insights about their client base, revenue models, or business challenges. Buyers gather intelligence, assess readiness, and subtly shape seller expectations — all without putting an offer on the table.

Worse, sellers often walk away feeling flattered by the interest, assuming momentum is building. In fact, they may be inadvertently giving the buyer a head start in negotiations they didn’t know had already begun.

As one seller learned the hard way, these casual chats can become informal due diligence sessions — with no guarantee of a deal at the end.

The lesson is clear: structure protects you.
When you control the process, you control the flow of information, the pace of the negotiation, and the framing of value. Without that structure, even a casual conversation can quietly erode your position before formal talks have even started.

How to Regain the Balance: Seller Clarity as Strategy

Clarity isn’t about rigidity. It’s about setting a deliberate starting point from which genuine negotiation can occur.

What sellers should define early:

• Ideal Price Range: Know what is acceptable, and what is not.
• Preferred Payment Terms: Upfront expectations versus acceptable earn-out periods.
• Post-Sale Involvement: Will you stay? For how long? In what capacity?

   

• Risk Appetite: How much of the sale are you prepared to place on future client retention?
• Non-Financial Priorities: Legacy, client care, staff continuity — know your non-negotiables.

   

Sellers who walk into discussions with this clarity naturally command stronger respect — and find themselves negotiating from strength, not from drift.

At Growth Focus, we have developed a clear process to work with sellers before they go to market, helping them clarify their objectives and shape a well-defined strategy that aligns with their personal and business goals. This structured preparation gives our clients not just clarity — but control.

Additional Insight: The Psychological Cost of Ambiguity

What is often overlooked is the hidden psychological toll of deal ambiguity. Sellers without clear objectives are more vulnerable to decision fatigue — the exhaustion that comes from repeatedly weighing shifting options without a defined framework. As negotiations stretch, fatigue increases the likelihood of poor decision-making, hasty compromises, or disengagement at critical moments. Buyers, by contrast, often operate with playbooks and rehearsed deal models, giving them stamina and structure. Clarity doesn’t just sharpen your external position — it preserves your internal resilience for what is often a marathon, not a sprint.

Patterns Beneath the Surface: Clarity Equals Confidence

Across every deal we see, the pattern is unmistakable.

• Clarity accelerates negotiation.
• Clarity reduces friction.
• Clarity strengthens pricing power.
  Clarity improves post-deal satisfaction.

The best deals are not those where the seller simply “sees what happens.” They are those where the seller sets a clear agenda, while remaining open to constructive negotiation.

Closing Reflection: Define Your Terms — Or Have Them Defined for You

In M&A, as in life, uncertainty attracts risk. And in negotiations, uncertainty almost always benefits the more prepared party.

Sellers who drift risk being carried by the winds of the buyer’s agenda. Sellers who steer with purpose shape the deal to reflect their objectives, safeguard their legacy, and maximise their reward.

At Growth Focus, we work with sellers through a structured process to transform uncertainty into clarity — and clarity into negotiation strength. Our approach ensures that when sellers step into the market, they do so with purpose, not passivity.

👉 Looking to sharpen your position before heading to market? Growth Focus helps sellers define their objectives and structure deals that align with their goals. Contact us today to start the conversation.