Preparing to sell a business can be a complex and multifaceted process, which requires careful planning and a strategic approach. Engaging a team of specialized resources before reaching out to a mergers and acquisitions (M&A) firm can help cover a lot of the groundwork before you are ready to go-to-market as well as ensure you are not overlooking anything in your business. This includes the preparation of your business’s financials, legal structure, and overall readiness for sale. All of these pre-planning factors can make your journey towards achieving an Extraordinary Exit™ more streamlined and ensure you maximize the value of your deal.
Table of Contents
Key People to Include in Your Exit Resource Team
Additional Members to Include in Your Exit Team
When to Enlist a Sell-side M&A Firm
Key People to Include in Your Exit Resource Team
An effective exit resource team should be made up of a sell-side Advisor, Certified Public Accountant (CPA), an M&A lawyer, and a Certified Exit Planning Advisor (CEPA). Each of these professionals brings unique skills and expertise to ensure all aspects of your business are properly prepared for your exit.
1. A Sell-Side Advisor
Experienced in the middle market and selling to strategic buyers. This role is not a single person, it is a team in and of itself. Sometimes it is called a project team, or sometimes it is called a mandate team (which is what we call it at STS). A team is necessary to deal with the myriad details and skills needed to navigate the exit process.
These professionals specialize in preparing your business for the market, identifying the right buyers, and negotiating deal terms to maximize value. Their expertise in valuation, due diligence, and transaction structuring ensures that you secure the best possible outcome while avoiding costly pitfalls. Given the intricate nature of middle-market exits, a sell-side advisor like STS provides the strategic insight, global network of strategic buyers, and execution support needed for an Extraordinary Exit.
2. Certified Public Accountant (CPA)
A CPA can help you understand and mitigate the tax consequences of selling your business. They have the expertise to navigate the complexities of capital gains taxes and other financial considerations that arise, including understanding both federal and state tax implications. By working with a CPA, you can ensure that your financial records are accurate, comprehensive, and in compliance with all relevant regulations. This not only helps in presenting a clear financial picture to potential buyers but also in optimizing your tax situation to maximize your net proceeds from the sale.
Your own accountants are valuable during the M&A process, and almost every middle-market company already has a full-time Chief Financial Officer (CFO), Comptroller, or Bookkeeper / Accountant. They are also involved in all the stages of the selling process and play a key role in preparing all financial information that your potential buyers will need to see during the due diligence process and in the preparation of marketing materials.
3. M&A Lawyer
An M&A lawyer can ensure your business is structured correctly before you start your exit journey. The legal structure of your business can have significant tax implications, and an M&A lawyer will work in tandem with your CPA to create the most advantageous situation for you. He / She will review and possibly restructure your business’s legal framework, advise you on how to mitigate any potential risks, prepare the necessary documentation, and make sure you are compliant. They are typically heavily involved during the due diligence phase of your M&A process.
4. Certified Exit Planning Advisor (CEPA)
A CEPA usually acts as the team leader before you go to market since they write the exit plan. For example, they determine the timeframe in which an exit is ideal and will talk about tax preparation, auditing financials, etc. The CEPA anticipates the needs of both your company and any potential buyers, ensuring that your business is market-ready.
STS Capital refers to this team as part of our ValueMax™ program. We bring in experts, such as capital investment brokers, private wealth managers, specialized M&A legal advisors, and coaches, to join us in advising you on how to leverage their expertise and turn that into value that strategic investors will pay for.
This approach reveals any gaps in your organization, so you can make focused investments and improvements that strategic buyers will value further into your exit journey. You can start 2, 3 to 5 years before your optimal exit timing and work with your exit resource team, or STS, to prepare your business to sell to the right buyer and achieve maximum value.
Additional Members To Include In Your Exit Team
From our experience at STS, the members and professionals below should also be considered and added as needed to your exit team:
- Tax Advisors (personal and business): Tax implications can impact the outcome of a sale. Your tax advisor should ensure that both the business and you as the seller optimize your tax positions, structuring the transaction to minimize liabilities and maximize net proceeds.
- Industry Experts: Their insights into market conditions, competitive landscapes, and strategic synergies with the acquiring company are valuable. They can assist in performing a competitive analysis to understand market positioning and potential growth opportunities post-acquisition.
- Management Consultants / Business Coaches: These coaches can help guide your business on things such as ensuring a cultural fit within the acquiring company, developing post-acquisition plans, or ways to enhance your operational efficiencies to maximize the value of the deal. STS has a partner network of industry-leading service providers such as Coaches, Tax Planning, Wealth Management, Marketing & Sales, Finance, CFO’s, Human Resources, and more to provide additional services to their clients on their journey to an Extraordinary Exit.
- Human Resource Experts: It’s important to conduct HR due diligence to ensure a smooth transition. These professionals should assess compensation structures, ensure benefits alignment, and develop talent retention strategies, when required, to minimize disruptions to operations both during and after the transaction.
- IT and Technology Consultants: Evaluating IT infrastructure and planning for data migration are points to consider during your process. These experts also mitigate cybersecurity risks and ensure data integrity throughout the transaction.
- Risk Management and Insurance Advisors: These specialists evaluate transaction-related risks and advise on insurance coverage and risk mitigation strategies, both pre- and post-transaction. Their expertise helps safeguard against unforeseen liabilities.
- Public Relations and Communications Experts: Effective communication with shareholders, the media, and your internal teams is an aspect that shouldn’t be overlooked. These professionals manage public relations, social media messaging, and internal communications to control the narrative and prevent information leaks. Unplanned announcements or premature disclosures about the deal can disrupt operations, damage the company’s reputation, and even jeopardize the transaction if key employees decide to leave.
- A Legacy Advisor: Experienced in creating charitable trusts or foundations, if these are to be established. A legacy advisor is a financial advisor who helps prepare a strategy to bequeath assets to family, next of kin, or charitable agencies after death.
- Success to Significance™ Advisor: A specialist in connecting people who are looking to make a positive impact in the world, with opportunities for this to become a reality. This is different than donating to charity in that it invests in the work of companies and non-profits that are trying to make a positive difference in people’s lives and well-being.
- A Personal Wealth Advisor, such as a Certified Financial Planner or a Registered Investment Advisor: After your exit, you will normally achieve financial independence to do the things in life you have always dreamed of doing. A personal wealth advisor can help prepare investment strategies and a plan to deliver on that strategy to invest the wealth you have realized.
- Physical, Mental, Spiritual, Health, and Well-being Advisors: Achieving an Extraordinary Exit is a life-changing event, positively changing your daily life, lifestyle, and what you can now focus your energies and attention on. It is for this reason that having a health and well-being advisor as part of your exit team is a good idea.
- A Personal and / or Executive Coach: A coach can assist greatly during the exit process by being another confidant with whom you can talk openly about your feelings, concerns, observations, and the joys of completing the exit.
- Family Members: Often, they are also investors or owners in the company being sold. Brothers, sisters, parents, children, and relatives all may have a financial interest, so their alignment on the terms and conditions of a final sale could be essential. They are also the ones closest to you, as the seller, and can be a great source of support and encouragement.
When To Enlist A Sell-side M&A Firm
By preparing your business with an exit resource team before engaging an M&A firm, you can ensure a smoother due diligence process. 
“The more prepared you are before going to market, the less burden you will have when exiting. Time kills all deals in M&A. If you don’t have the right information when it’s needed during the selling process, potential buyers can lose interest quickly.” – Ron Pullar, STS Managing Director
Leveraging an exit resource team while developing your exit plan, along with our STS ValueMax services, can greatly enhance your readiness and attractiveness to potential strategic buyers. It can put your business on the radar of potential strategic buyers from around the world. As buyers begin to understand how your business would be integrated with theirs and how they can leverage their business to new heights, they’ll pay multiples of expected value because the strategic acquisition of your business will make their organization even stronger.
