Hiring a business broker remains one of the best things you can do to shepherd a merger or acquisition to a successful completion. M&A should not be a do-it-yourself project because of the myriad complexities involved. And while an M&A advisor can help, there's a lot you can do to help them support you, too. Your business broker may not tell you how important your role is, because they know one of their main jobs is to take the pressure off. But if they could, here are five things they would tell you.
Market Factors Can Affect Your Deal in Surprising Ways
Many owners focus on the wider economy, worrying about how a recession will affect value, or hoping that a sudden booming M&A market will serve them well. The truth is that there is no market factor that is universally good or bad for all sellers. The individual circumstances of your niche are critical. Consider, for example, how poorly travel fared during the COVID-19 pandemic, but how well digital media did.
Emotions Can Taint a Deal
A deal is never a purely rational undertaking. Your business is your baby, whether you admit it or not. And if you have mixed feelings about parting with your business, you may undermine the deal in subtle ways. Conflict with the buyer, distrust about their intentions for the future, ego, pride, and many other challenges can also kill a deal before it even gets off the ground. Don’t deny that you have emotions; develop a plan for identifying them and controlling them, before they control you.
Preparation is Half the Battle
It doesn’t matter how successful your business is. If it’s in legal trouble, you can’t document your financial success, or half your team is going to be leaving soon, it’s not an attractive acquisition for a buyer. Preparation for a sale can help mitigate risk by incentivizing your team to stay, documenting your financial claims, and protecting your reputation. Spend some time working with a business broker on your due diligence plan before you and a buyer sign an agreement.
If You’re Not Planning for Integration, You’re Not Planning for Success
Integration planning is key to the long-term success of the merger. But it must begin well before closing. Work with the buyer to build an integration team with members of both companies who can work from day one to ensure success.
You’re Not a Business Broker
There’s a lot you can do to support your broker and the deal. But you are not a business broker, and your gut may be wrong on some issues. Be sure to check in with your business broker about why they make the recommendations they do. Then let them lead the way if they can make a compelling case for their ideas. A skilled business broker knows the industry and knows the process of M&A. You’re wasting your money if you pay for that experience only to undermine it.
If you prefer to preschedule a phone consultation please submit your information here and we will confirm by email. For direct email contact please click the grey Contact Us tab below or visit our Contact page.