First-time buyers and sellers will benefit greatly from hiring an M&A intermediary to facilitate the process and provide expertise. The following is a broad overview of the basic steps involved in successfully completing an M&A deal. It is important to keep in mind that oftentimes a deal goes through unforeseen changes and the steps are not always linearly laid out as seen below.

The most important portion of the M&A process for a business buyer is due diligence. Performing effective due diligence allows the buyer to deeply comprehend the target company’s numbers and infrastructure. If thorough due diligence is not achieved, the buyer runs the risk of acquiring an unsuccessful company with unknown issues. Not only does financial and legal information require assessment, but other operations must be analyzed to avert potential risks. The following is a list that every buyer should follow during the course of due diligence in order to ensure that every important element is examined

Recurring revenue is a phrase that often appears during business valuations. The most profitable businesses are those that retain recurring revenues, meaning that the same customers continue to return time and time again. A company with recurring revenues can earn a large portion of profits from repeat customers that have become loyal to the brand. Potential buyers seek out these types of businesses because, not only are they highly profitable and offer a high return on investment, but they also require less work and possess a lower risk factor. The following guide describes various manners in which a business owner can create barriers to entry through instating a continual cash flow.