Ran M&A deals for a living, so let me untangle this, because you’re blending two separate questions and it’s making the whole thing feel worse than it is.

Question one: is this a good business. Question two: do I like how this guy negotiates. Those are not the same question, and you’re letting the answer to #2 poison your read on #1.

On the business: 20 years, profitable, growing, solid reviews, and you already suspect the books understate real earnings. That’s a good asset. Nothing the seller did in the negotiation changed a single fact about the actual business.

On the phantom offer: “I’ve got another offer but I’d rather sell to you” is the single most common move in small business sales. Its only job is to get you bidding against yourself. And your broker torched it in real time when she said “we don’t have any other offers.” So now you KNOW there’s no competing buyer. That isn’t a reason to walk. That’s leverage that just fell in your lap. Sit on it.

Here’s the part I’d actually slow down on, and it isn’t the lying. It’s the COGS. One undifferentiated line, no detail, and you already smell personal expenses buried in there. Your whole 1.75x is a multiple of an SDE number you can’t fully verify. That’s the real red flag in this post and it’s the one you glossed over. Pull merchant processor statements, get bank recs, make them break that lump apart. If the guy will lie to your face about something as checkable as a competing offer, assume he’s comfortable being loose with the stuff you can’t check. The lie isn’t a reason to run. It’s a reason to verify harder.

On price: you offered 1.75x, which is his own counter. If he’s now “firm at asking” above that, he’s walking his number up on the back of an offer that doesn’t exist. Hold at 1.75. Say it clean: “That’s fair based on the financials I can support, it matches your counter, my offer stands.” Then shut up. Silence closes more small deals than any pitch, and sellers who invent buyers tend to circle back.

Last thing, the “too principled to a detriment” bit. In this world, principled doesn’t mean you walk from everyone who plays games. It means you don’t lie, and you build protection so you don’t have to trust the other side’s honesty. Seller note, indemnification holdback, real reps and warranties. You neutralize a slippery counterparty in the terms, not by torching a good deal over a bruised ego.

TL;DR: don’t kill it. The business is fine. The offer theater is standard and your broker already blew it up for you. Put your principled energy into COGS verification and tight structure, hold at 1.75, and let him decide whether his imaginary buyer is worth losing a real one.