Take 20 minutes to speak with an M&A Advisor today

If you’re considering selling your business, chatting to an M&A Advisor could be the best way to spend 20 minutes today.

At this point, you are still weighing up your options. Should you sell now, or push back to next year? How much could I get? Who might buy the company? What do I need to do to 'prep' the business for sale? How does the process work?

Hopefully Bizma is helping you answer some of these questions, but getting on the phone with a great M&A Advisor in your industry is a great step too.

These guys (read up here) spend all day, every day thinking about M&A and exits.

They can have a bad reputation. They are expensive, and the quality varies.

But the good ones are a font of knowledge on the market at the moment, valuation, deal structures, current hot buyers...

And they will happily give you 20 minutes of insights for free. They see this as great relationship-building time with a potential client. And for you it’s free market research. 

Most people think that you should engage a “broker” only once you are in the deal process, and have already had an approach from buyers. But if you only engage them late in the process, you might wish you had their input sooner so you could implement their recommendations.

So find a handful of M&A Advisors to reach out to.

For their advice to be tailored to you, you want ones who focus on your industry and work with companies of your size. This is key. Look for recent PR or news articles about recent sales they have advised on.

Then introduce yourself and the business. Explain that you are considering selling in the next 12 months, but want to understand the market landscape and valuation first.

They will need to understand a little about your business for context and to frame their advice. So prep a quick overview of the business and some high-level financial information that you can send before the call (you can agree an NDA first if you think that’s necessary).

Then you can quiz them on things like:

Valuation

• What valuation multiples have you seen recently?
• Which companies achieved the best multiples, and what set them apart?
• On what factors are buyers placing premiums right now?
• Based on what you know so far, what sort of range might my business be worth today?
• How might the valuation increase if we hit our forecasts for next year?
• Are there any trends in cash vs stock, and up-front vs contingent? What deal structures are buyers preferring?

Buyers

• What kinds of buyers might be interested in a business like mine? Strategic buyers vs PE?
• Are there any especially active acquirers in our space at the moment?
• With our financials, are we in the right ballpark to sell to buyers like them?
• What attributes are non negotiable for them to acquire a business? Minimum EBITDA threshold, tech sophistication, recurring revenue?
• What attributes or issues have spooked buyers or killed deals?

Other

• Where do you think I should spend the most time preparing my business for sale?
• How is market sentiment generally, and how is this impacting deals?
• If I wait 12 months, what macro factors could change?
• How long are deals taking to close?
• What would your fees be to support us on an exit? How much should we set aside for lawyers and accountants?

Next steps

If this chat goes well, you will have a good idea of how an exit could shape up for you.

If the advice sounded positive, and you liked what you heard on valuation, you might choose to pull the trigger and move forward with a sale.

If the feedback is that the business won't get the valuation you want, or the market is quiet at the moment, you can go back to building the business and review in 6 or 12 months.

Hopefully the advisor impressed you with their knowledge and insights. You now have an ongoing relationship that will be valuable as you work through your exit.

They might offer you to engage them in some paid work – perhaps a more complete valuation exercise, a buyer scan, or an exit-readiness review.