When the NFL season kicks off, fantasy football drafts are at their peak. Everyone does their research to figure out who will be the big picks that will lead them to victory.
Unfortunately, some business owners put more effort into choosing their fantasy football teams than putting together a mergers and acquisitions (M&A) team to exit their business. Here’s who you’ll need on that roster:
CPA: Hopefully, your CPA has already been with you several years and understands how you do your books and recognize revenue. Ideally, the CPA has done has reviewed or audited your financials at least one year (but ideally three years) before the sale.
Attorney: Your current attorney may play a role in the sale. They know your business’s legal history and have ready-access to your legal documents.
M&A attorney: A M&A attorney is essential, but may serve as co-counsel with your regular attorney. Think of your attorney in most cases as a family doctor and the M&A specialist as a heart surgeon. (There are approximately 200 attorneys in Brown County and I would estimate only 10 of those are true M&A specialists.)
This role is pivotal, as I’ve seen many deals get done or fall through, based on this professional’s expertise and creativity. You want someone who will protect you, while still finding ways to get a deal done.
M&A tax specialist: Your CPA could fill this role, but here again, you may want a specialist serving as co-counsel. If you were one of our recent sellers, for example, you’d want someone who understands things like Sub-Q elections, tax-free exchanges, and Section 368(a)(1)(F) of the tax code, as these were just some of the structuring components proposed.
M&A advisor: If you’re considering going to market, an M&A advisor can help you understand what the market will bring and whether it makes sense to go to market. If so, they will take the business to market, run a confidential process, and (ideally) generate multiple buyers.
Financial advisor: This specialist can help you understand what you need to live your ideal lifestyle after a sale. Compare the target number from your financial advisor with the market benchmark provided by your M&A advisor and make sure the numbers are in alignment.
Value enhancement coach: If the estimated business value doesn’t match what you need to retire in comfort, a value enhancement coach can be beneficial. Working with your M&A advisor, the right consultant can help you identify low hanging fruit and near-term strategies to add business value in a sale.
Mentor: I’m a big believer in mentors at all stages of your business, including the last. Find a trusted leader who has ideally sold their own business and has no financial stake in helping you keep or sell your business.
Do the research and build your “real life” transition team well before the big game. I promise, you’ll be paid much more handsomely than any football pool.