Do's
Consider reasonable long term financial, intellectual and emotional goals
- Make sure your family is aligned
Continue to focus on building a strong business as if you will never sell out
- Strong operating results deliver higher valuations
Review whether you have sufficient management depth and breadth outside of yourself
- Buyer's value managerial talent in addition to cash flow, IP and assets
Tidy up all legal, intellectual property and financial documents, minutes books, trademarks etc
- You don't own what you don't paper
Map your firm's positioning and value proposition against key competitors
- Differentiated businesses with sustained competitive advantage bring higher valuations...and more strategic buyers
Where necessary, fix up your balance sheet and income statement
- For example, diversify the customer base, improve collections etc
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Don'ts
Begin interviewing M&A intermediaries too early
- Wasting their time on a process 5 years out will harm your future credibility
Put out prematurely a 'for sale sign' without consulting an advisor
- If you are not ready, your valuation and leverage will be lower
Try to hide problems
- Skeleton's could reduce the value or scuttle the deal
Believe it is only about the price
- The terms could be just as important
Forget your firm will be subject to a thorough due diligence
- For example, your customers and employees will be interview
Ignore post transaction integration and performance
- Your earn out will depend on future results
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