What does your M&A advisor expect from you?

You've spent a lifetime building your business and the right time to exit has finally made its way to the present. To this point, you've done everything correctly:

• Consulted trusted advisors on the process
• Interviewed multiple investment bankers and business brokers to lead the process
• Selected the right firm to represent you based on track record and sector expertise
• Insured you have a strong management team in place capable of running the business after you sell the company

Now that your investment banker or business broker has prepared your offering memorandum and is actively and confidentially marketing the sale of your business what are you supposed to do? The answer is a lot simpler than you might imagine – keep on keeping on. That's right, you may be mentally preparing for a big shift in your life, but at this point the best thing to do is to keep running your business. The business sale process can take many months and occasionally may take a year or more. A potential buyer will want to see the business continuing to perform on all cylinders. However, as your business broker or investment banker gets further along in the process of marketing the sale of your business, your responsibilities in the process will become greater. Below are a few components of the business sale process that may take you away from the day to day management of your business:

• Introductory Conference Calls – After your broker or investment banker has executed a nondisclosure agreement with an interested party and provided the Confidential Information Memorandum (CIM), parties interested in learning more will want to set up an introductory management call. During these calls the potential buyers will want to rehash a lot of what is in the CIM and learn a bit more about your company, operations and financials. During these calls deal value is typically not discussed. These calls are also a good moment for sellers to learn about the potential buyer, their culture, industry experience and more.
• In-person meetings – Post calls, expect a long round of introductory phone calls to narrow the pool of interested parties down to a group of serious potential buyers. These buyers will all want to meet in person. To maintain confidentially, you may want to schedule these meetings at an offsite location. In many cases, potential buyers will want to tour your facility and will often (for confidentiality purposes) pose as bankers or insurance agents as you show them around.
• After all the meetings are complete and you've signed an exclusive Letter of Intent with a viable buyer the best thing you can do is to continue running your business as efficiently as ever. However, this stage of the process will involve generating documentation for due diligence and ensuring the attorneys are preparing the documents correctly. During this time you can lean heavily on your business broker or investment banker to buffer you from becoming overwhelmed by the data requests which typically are significant.
• Post-closing – After the transaction closes most buyers will want ownership to stay on for a pre-determined period of time (anywhere from three months to perpetuity). This integration period will be very important for the new owner as they transition the business under their ownership. This period will entail introducing the new owners to current customers, suppliers and ingratiating them with the workforce.

While a qualified investment banking or business broker team can mitigate much of the noise experienced by a business owner during the sale process, you should enter the transaction with a goal above all others - continue running your business as effectively as you can. Business owners who deviate from this primary goal can expect other challenges during the vetting and diligence process. Remember, your job is not selling your business, but ensuring the business remains attractive to buyers - leave the selling to us.

What does your M&A advisor expect from you? was originally published on Business Markets Inc.