Forbes Business Council · October 2026

A Fair Offer Is On The Table. Should You Take It Or Hold Out For More?

Most owners weigh the offer in front of them against a larger number they imagine arriving later. In this Forbes piece I argue that turning down a real offer means choosing to own the business at that price for as long as the hold lasts, and I show how to work out what the business must earn to make that choice pay.

Ron Smith

Read it in Forbes

Summary

Declining an offer is a decision with a price.

The core argument: declining a live offer is the same as buying your own business back at that price. That choice can be right, and its cost never appears on any statement.

I call the test the Hold Hurdle: the return the business must earn for holding to beat selling today. If the business cannot clear it, waiting carries a cost the owner is paying without seeing it.

A higher price takes more than patience. Buyers pay a multiple of profit, so a higher number requires profit that grows and holds for the two or three years a buyer needs to see. Add a sale process that runs close to a year on its own, and a meaningfully higher price can sit four to five years out.

The worked example

What a $12 million offer asks of the next five years.

The figures are illustrative and come from the article. They show the arithmetic of waiting, and the result depends on each owner's taxes, fees and profit.

01Start with what the owner keeps today.The offer is $12 million, six times profit of $2 million a year. After taxes and fees, the owner keeps about $9 million.
02Set the hurdle.Assume a conservative 7% a year on that money invested broadly, plus a premium near 9% a year for keeping it in one undiversified company, the figure Working Paper 005 computes for a typical owner. The Hold Hurdle is 16% a year.
03Grow the alternative for five years.At 16% a year for five years, the $9 million grows to about $19 million after tax.
04Work back to the sale price and the profit.Sale prices are quoted before tax. To keep about $19 million after a 30% tax, the sale in five years would need to come in near $27 million. At the same six-times multiple, that requires about $4.5 million of annual profit, more than double today's, just to come out even.

An offer in hand is rare. Before turning one down, an owner should know what the business must earn over the next five years to come out ahead.

Ron Smith, CM&AA, Founding Partner

What the arithmetic leaves out.

Waiting carries risks the example does not show: a lost customer, a key employee who leaves, the owner's own health, a softer multiple, and the plain chance that no buyer appears. Close to a third of sell-side engagements end without a transaction, according to the Pepperdine Private Capital Markets Report for 2025.¹

Growth has its own trade-off. A dollar of profit can be taken home as income or reinvested to raise the price later, and it cannot do both. The right balance depends on the owner's age, goals and the stage of the company.

Some reasons to hold have nothing to do with money: legacy, control, the people who depend on the place. They are real, and the arithmetic does not capture them. This summary is general information; tax and investment decisions belong with your own advisors.

Weigh the offer in front of you with the cost of waiting in view.

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A Fair Offer Is On The Table. Should You Take It Or Hold Out For More?

Declining an offer is a decision with a price.

What a $12 million offer asks of the next five years.

What the arithmetic leaves out.

Read next.

Weigh the offer in front of you with the cost of waiting in view.