When “We’re Considering Our Options” Means You’re Already Behind
Early conversations can set expectations before you have a strategy. Understand your options before discussing any terms.
The Bottom Line
When the other party says, “We’re considering our options,” lawyers and bankers may already be helping them plan their next move. Before suggesting terms or making commitments, get counsel’s perspective on your own options.
The same applies when you are initiating a sale, exit, or restructuring. Even an informal conversation can set expectations about price, timing, or structure before you know what works for the business. Bring counsel in before those discussions begin, while it’s a fresh slate and you still have room to choose your direction.
The planning may be further along than the language suggests
A business partner mentions they are considering a sale, then adds, “We’re considering our options.” There is no firm proposal to discuss, so you treat it as an idea they are still turning over.
But before raising it with you, they may have consulted lawyers and bankers about possible buyers, transaction structures, and what they would be willing to accept. The language sounds tentative. The preparation behind it may be anything but.
When I hear that phrase, I want to know how much thinking has already happened. Are they exploring possibilities, or looking for your reaction to a direction they have largely chosen?
You do not need to assume the relationship has turned hostile. You do need to understand what conversation you are entering before volunteering an answer.
An early answer can be difficult to walk back
In an early discussion, “I’d consider that price” or “We could probably close by year-end” can feel like harmless ways to keep the conversation moving.
The other party may hear something more definite. The next proposal arrives built around that number or timetable, even though you have not assessed whether either works for you.
Then your advisors identify a problem. The proposed structure does not achieve what you intended, or the financing cannot support the schedule you suggested. Now you have to revisit an expectation the other side thought you had settled.
The time to get advice is before you find yourself explaining why yesterday’s answer no longer works. Work through possible terms with counsel first, so you understand which ideas are worth discussing and which need more thought before they reach the other party.
Work out what you want before negotiating how to get it
Before reacting to the other party’s plan, establish what you want to accomplish. An owner who wants to sell part of their interest and stay involved needs a different arrangement from someone ready to leave the business entirely.
Business exit planning needs to account for that difference. An attractive price can lose some of its appeal once you understand the proposed payment terms, tax implications, or obligations that would continue after the sale.
The same thinking applies to a restructuring or renegotiation. What needs to change for the arrangement to work, and what are you prepared to give up to achieve it?
Counsel can help assess possible routes against your existing agreements and identify questions that need financial or tax advice. On complex transactions, get those advisors talking early. You want to understand the tradeoffs before presenting a preferred direction to the other side.
You do not need a finished plan to call counsel
There is no ‘too soon’ to ask for perspective. You can explain what you are considering, what the other party has said, and what you have not decided yet.
Good counsel may tell you that the immediate work is commercial: establish whether the opportunity makes economic sense before developing a detailed transaction strategy. Or that first conversation may identify a contractual restriction that changes which options are realistic.
The level of legal involvement should fit the stage you are at. An early call can help you decide what needs attention now and what can wait. You do not have to arrive with the answers already worked out.
BEFORE DISCUSSING TERMS
- Clarify what the other party is considering and how far their planning has progressed.
- Identify your preferred outcome and where you have flexibility.
- Check existing agreements for restrictions that could affect your options.
- Review potential terms with counsel, bringing in financial and tax advisors where needed.
- Decide which questions you can answer now and which need more work before making commitments.
Dan’s Perspective
The other party may have spent weeks preparing for a conversation you are hearing about for the first time. If their lawyers and bankers are already involved, you want yours involved yesterday. Give yourself time to understand your options before responding to theirs.
— Dan Katz