M&A Tools

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There’s a clear playbook for small and medium business mergers and acquisitions.

What tools to use, professionals to hire, strategies to employ.

In my own business acquisition outreach, I talk to dozens of business owners and sellers every month.

People ask me all the time for vendor recommendations.

What business brokers, tax accountants, transaction attorneys, and financial planners I work with? What all goes into a smooth transition? How do you nail down a proper valuation?

I don’t claim to know it all, but I update this page regularly with the best resources I find. Here’s the list:

#1. Buyer types & Transaction expectations

Recognizing the type of buyer your business attracts shapes everything from pricing to negotiation style.

  • - Individual Buyers: Typically hands-on, these buyers aim to manage the business day-to-day. They may offer less flexibility on price but bring a strong personal commitment to its future.

  • - Financial Buyers (Private Equity): Focused on cash flow and ROI, financial buyers will examine financials in detail. They’ll likely have rigorous demands but can often close deals quickly if the financial returns align with their targets.

  • - Strategic Buyers (Competitor or Related Company): These buyers seek synergies with their existing operations and are often willing to pay a premium. However, the process can involve more negotiation around proprietary details, as they often aim to integrate your business fully.

Knowing who’s at the table allows you to set realistic expectations on price, timeline, and transition terms.

#2. Choosing advisors

The following advisors play essential roles in every business sale:

  • - Business Broker: Brokers connect buyers and sellers, leveraging experience in valuation and market access to help find the best buyer fit. I recommend talking to John at Marsh Creek Advisors.

  • - Transaction Attorney: This attorney negotiates the deal terms specific to your business size and ensures legal protections for your interests. A great option here is SMB Law Group.

  • - Tax Accountant: A tax accountant specializing in business transactions can make sure the deal is structured tax-efficiently and help you avoid pitfalls. For a smooth process, find someone well-versed in transaction-specific tax regulations in your state.

  • - Financial Planner: A financial planner ensures you retain as much as possible from the sale proceeds and helps structure the gains to meet long-term financial goals.

For transactions under $15M, it’s common for both buyer and seller to use the same broker, with each side retaining their own legal, tax, and financial advisors.

#3. Business valuation

Most valuations are based on a simple multiple of EBITDA, with some adjustments, or “add-backs,” for one-off expenses that won’t affect the buyer.

But here’s the catch: there’s no publicly available data for business sales like there is in real estate. These deals happen behind closed doors, so only a few brokers and advisors have access to a real sample size for valuations. Here’s what you need to know:

  • - Determine Your Multiple: A knowledgeable business broker will know the right multiple for your business, given its size, industry, and profitability. Different industries and company sizes can mean wildly different multiples—some get a 2x EBITDA, while others can reach 5x or higher.

  • - ‍Add-Backs Matter: Add-backs let you adjust EBITDA to show the true earning power of your business. These can include things like personal expenses, one-off legal fees, or any family salaries that wouldn’t continue under new ownership. Add-backs are key to pushing your valuation higher.

I'd recommend John at Marsh Creek Advisors for these valuations.

#4. Transition planning & Maximizing valuations

Are the books squeaky clean? Operations documented and smooth? Customer and employee turnover low? Revenue and margins consistent for the last few years? Does the business depend on you, the owner, to operate?

If you're a ways out from your exit, consider tidying things up well in advance. Use these resources to get ready:

Additionally, consider the type of buyer you’re targeting: an individual, a financial firm, or a strategic firm.

Individual buyers often rely on SBA financing, which heavily weighs revenue shown on tax documents, limiting the impact of valuation adjustments or add-backs. In contrast, financial or strategic buyers usually offer a higher exit value by leveraging these add-backs and other value markers, though interest from these buyers typically centers on established businesses in certain industries (i.e. HVAC, B2B Services, ... ).

#5. Transaction timeline

Selling a business is rarely a quick process; even in a straightforward deal, you’re looking at 6 to 12 months from start to finish. Here’s how a typical transaction timeline breaks down:

  • - Assemble Your Advisory Team: Pull in the key players—your broker, transaction attorney, tax advisor, and financial planner. Early alignment with your team ensures a streamlined process and prevents costly last-minute surprises.

  • - Get a Valuation and Sale Number: Work with your broker to establish a valuation range and a realistic target price. This number will guide negotiations, but it’s also important for aligning your own expectations.

  • - List the Business for Sale: Once your broker has prepared marketing materials, it’s time to go to market. This is when potential buyers get their first look at the business and start submitting inquiries.

  • - Review Letters of Intent (LOIs): Serious buyers will submit LOIs outlining their proposed purchase terms. At this stage, you’ll evaluate each offer’s strengths, considering price, terms, and buyer fit.

  • - Due Diligence: Once an LOI is accepted, the buyer will dive into due diligence—reviewing financials, contracts, and operations in detail. This is typically the most intensive and time-consuming part of the process.

  • - Closing: After due diligence is complete, final agreements are signed, and funds are transferred. With the right advisors, closing is a straightforward step, marking the official transfer of ownership.

Closing remarks

I’ll continue updating this page with resources to make the acquisition process as open as possible.

Feel free to reach out to me if you have any one-off questions, or if you would consider selling your business to my family.

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