When selling a business, it is important to avoid the most common killers of M&A deal payout prices.
Not Shopping Around
One common mistake that business owners make is becoming involved in a single buyer auction. A solicitor is interested in buying your company, and you gleefully agree to go headfirst into a single deal without first shopping around. This method will not allow you to seek out the highest payout. Beginning a deal without adequate planning can also lower your payout price. Be sure to explore all of your options before committing to just one.
Big Accounts
If your customer base is narrow and most of your revenue comes from a couple of big accounts, this will be unattractive to buyers. Diversify your client base in order to increase your EBITDA value.
Poor Document Organization
Documentation that is difficult to muddle through can consume more time for the buyer during due diligence and negotiation. The buyer may also find it necessary to lower the price if they find any hidden problems during the process of the M&A deal. Be open with everything starting at the beginning, that way both sides will know what they are getting into. Your approach to the entire deal can affect the payout outcome.
Doing All the Work
Embarking upon an M&A deal does not have to be scary and it does not have to be done alone. Utilizing help from professionals will most likely get you a much bigger price tag. M&A intermediaries, lawyers, and accountants are a few of the comrades that you will want on your side during an M&A deal.
Contact George & Company today for expert opinion on selling a business.
