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Assembling Your Dream Team for a Successful Exit

by | April 9, 2024 | Selling a Business, Exit Planning

Reading Time: 3 minutes

The difference between no outcome and a great outcome in selling your business lies in your preparation as an owner, supported by your key advisors—your “dream team.” Those who prepare well by filling in gaps and maintaining value acceleration throughout the deal will disproportionately win in the M&A game.

Doing this right requires careful planning, starting years in advance, to align financial reporting and operational strategies with market expectations. It also means having that dream team assembled long before you’re actually selling. Getting started early ensures you can sell your business smoothly and at its full value, as mistakes down the line can be time-consuming and expensive to fix.

After all, how many years did you just spend starting it? How many risks did you take? Don’t make the mistake of thinking you can suddenly decide to head for the door within six months, and have it go well.

To avoid issues, start getting your business’s legal and financials in shape for sale about 2-3 years in advance. By teaming up with the right experts, you can maximize the return from your exit (if you even decide to exit at all, or just step back). Let’s take a closer look at the different people you should have in your corner when you want to start planning an exit.

1. M&A Attorney

Start 2-3 years before desired exit

An M&A attorney is indispensable for navigating the complex legal landscape of selling your business. They’ll help you get your legal house in order, including due diligence and ensuring all legal documentation is up to date and compliant. This process should ideally begin two to three years before you plan to exit to allow enough time to address any legal issues that might arise.

2. CPA

Begin 2 financial years ahead

A Certified Public Accountant (CPA) will be needed two financial years before your exit. They will assist in reviewing and upgrading your financial statements from compiled to reviewed, or from reviewed to audited. This step enhances the credibility of your financial information in the eyes of potential buyers.

Additionally, a CPA can help you clean up personal expenses that have been run through the business and analyze margins by product and line of business, ensuring that your financials are as attractive as possible to buyers.

3. Investment Banker

Consult 1-2 years before sale

An investment banker plays a pivotal role in understanding the market value of your business and identifying value gaps. They can advise on where to focus your efforts and expenses to enhance the business’s value and ensure it aligns with your exit goals.

Get some recommendations on options from your M&A lawyer and CPA. From there, selecting the right banker involves interviewing multiple candidates to find one that understands your industry and has the right connections to potential buyers.

4. Value Enhancement / Acceleration Consultant

Engage 2-3 years before exit

This consultant will guide you in maintaining upward momentum in your business’s growth and value. They’ll help de-risk the business and capture intangibles that make your company more attractive to buyers. Companies that are growing rather than remaining stagnant are more likely to secure a deal and at a higher price.

5. Expense Reduction Analyst

Engage 2-3 years before exit

Bringing in an expense reduction analyst can significantly increase your EBITDA (earnings before interest, taxes, depreciation, and amortization) by identifying and cutting unnecessary expenses in up to 25 categories, such as technology, telecom, and insurance. Every dollar saved is multiplied in the business’s valuation, making this a high-impact area for increasing the sale price of your business.

6. Wealth Manager

Consult early in the process

A wealth manager will help you understand if the sale of your business will provide the funds necessary to meet your personal financial goals. They use tools like Monte Carlo simulations to forecast the likelihood of achieving your post-sale objectives, including lifestyle, travel, and philanthropy, ensuring the sale aligns with your broader financial planning.

7. Estate Planning Attorney

Begin planning 2-3 years in advance

An estate planning attorney will help you manage the proceeds from the sale in a tax-efficient manner. This includes setting up trusts and other structures to protect your assets and minimize tax liabilities, ensuring that your financial legacy is secured for the future.

8. Coach

Engage concurrently with other advisors

This role can also be filled by the value enhancement consultant, but either way they should focus on building your leadership team and planning for succession. They ensure that you and your team are mentally and emotionally prepared for the transition, which can be one of the most challenging aspects of selling a business.

Procrastination is expensive when planning an exit

By assembling this team well in advance of your planned exit, you’ll position your business to maximize its value and ensure a smooth transition to its new owners, as you step into retirement or whatever is next.

To find out more about planning your exit, book a call with a senior professional at Merit who can help you determine the best path forward. Our team is composed of seasoned investment bankers and advisors who not only understand the intricacies of financial markets but also have a deep empathy for the entrepreneurs and business owners we serve.

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