After serving middle-market business owners for nearly two decades, SDR understands the immense complexity and abundance of considerations that are coupled with an M&A transaction. We find that many of our clients at the beginning of an engagement are simply thinking of the dollar amount that will hit their bank account on the day of closing. What business owners often fail to account for is the outlying considerations within the broader M&A landscape as well as their near and short-term business operations.

ITR Economics recently published an article detailing 3 Important Questions to Answer Before Selling Your Business. ITR rightly points out that post-tax cash is not the only economic considerations that business owners considering a transaction should focus on. The article goes on to explain that business owners should thoughtfully reflect on and answer the following questions before embarking on a potentially life-changing transaction.

  1. Where you are in the business cycle?
  2. Where your markets are vis-à-vis the business cycle?
  3. Will waiting to market your business afford you the opportunity to increase your EBITDA?

SDR understands that there are unique situations in which business owners have a high sense of urgency given personal considerations, however, there are many instances where it is in the business owner’s best interest to press pause on their M&A goals and focus on preparing their business for sale. Time (and timing) is the enemy of a successful M&A transaction. Whether due diligence is halted due to a performance issue, a macro-market is at its peak or in a valley, or business development faces a disruption or slows down, time will pass, and with it, the attractiveness of a business. One thing is for certain when looking to sell a business, strike while the iron is hot.

Read ITR’s detailed coverage of the topic here.

If you or another business owner in your life are interested in exploring M&A options, including evaluating the questions listed above, our team of M&A professionals is here to help. Please contact Scott Mitchell at smitchell@sdrventures.com or call our offices at 720.221.9220.