If you’re new to dealmaking, you may not realize yet that it’s not a one-person show. We’ve explored and executed hundreds of deals in our time, and we’ve found it’s best to have at least a few team members lined up. 

Today, we’ll break down the absolutely essential list of people you should have on your side as you buy a business. These people will help you execute the deal from the early exploration and due diligence stages to negotiations and closing.

Choose your team wisely

What we’re walking through today is essentially how you’ll build your dealmaking board of directors from the ground up.

You likely already know (or even have a relationship with) some of these types of people. If you don’t, lean heavily on your network. Chances are you know someone who knows someone who knows someone who can help you.

Avoid hitting up Google…this is not a situation where you want to wind up with a rando.

If there’s one general practice we can offer when it comes to approaching a deal, it’s that simpler is better. Make sure your team is on board with this philosophy as well, so you don’t get caught up in a bunch of jargon that slows down your process.

You should also consider adding some sort of escape clause as a part of your deal that allows you to cut ties with any of your dealmaking team members during the process if things aren’t panning out. 

Take it from our past experience – this is a necessary safeguard if you’ve never worked with your specialist before.

Pick an attorney with M&A chops

Your attorney’s job will be to help you draft, craft and deliver all of the legal documents during the due diligence and negotiation process.

This could include things like drafting or revising your letter of intent, guiding you through how to structure your deal, or even clearing up the terms of the deal.

Make sure that your attorney isn’t a generalist. This is not the time to test out a lawyer who has never facilitated an M&A deal before. 

It may seem like the same attorney who helped you get divorced can help you buy a small business, but these are two very different skill sets, and we don’t recommend mixing them up.

One thing to look out for along the way: make sure your attorney isn’t overcomplicating the deal terms. If it’s your first time trying to buy a business, it’s okay to keep the overall structure simple. (In fact, we’d argue that this is preferred!)

Find accountants you can count on

In dealmaking, your accountant will be the one to sniff out all the numbers that the small business owner has presented to you during the due diligence process.

They will be a critical part of your business buying journey because they’ll be the ones diving deep into the financials to figure out if the numbers are real or not.

Your accountant will likely need some financials from the current owner upfront to help you during the due diligence process. We always recommend starting out with:

  • Financials (i.e. annual revenue and monthly recurring revenue)
  • Cash flow (i.e. profit/loss, profit margin and income streams)
  • Expenses (i.e. monthly and yearly expenses on equipment, labor and maintenance)
  • Assets (i.e. equipment, real estate and machinery)

You can also ask for more numbers and information later, once you’re in the formal due diligence process.

Line up banker or local SBA contact

This is the person who will help you through the financing portion of your deal.

If you’ll be working with a banker, make sure your credit score is great and that the existing company has substantial assets that will be a part of the deal. Otherwise, you run the risk of the deal not going through and having to find other ways to finance your business acquisition.

If you’re getting an SBA loan, you may not actually need a local banker. Instead, you’ll work directly with an SBA agent to help finance your loan. You can call your local SBA office and talk to a representative to see what the terms of your SBA loan could look like.

Other helpful additions for your dealmaking team

A business broker

A broker is not always necessary to find a deal. But they can be a helpful addition to the team if you’re slammed with multiple deals that are up in the air.

Bonus points if they’re a specialist in your industry or have worked on a deal like yours before.

Just make sure that you’re either bringing them on from the start or not at all. Business brokers don’t really need to be around during the middle of a deal unless they are a vetted and trusted source for you.

An operator

If you’re not planning on keeping the current CEO in their position after you buy the business, go ahead and put some feelers out for who your operator could be.

If the seller and current CEO is planning on retiring, for example, you’ll want to have an operator in mind.

I mean…you could operate it yourself, too, but the whole point of buying an existing business is so you don’t have to be the one actually running it day-to-day.

A business partner

If you’re planning on purchasing this business with a business partner, we’d recommend bringing them in as early as possible. Nobody wants to sign their name on an asset as big as a business without having been involved in the early process.

It may also slow down the negotiation process if you are going back and forth with a partner or trying to get the deal terms right with the seller and a business partner mid-deal.

Make sure that you and your business partner are on the same page as far as the types of deals you’re looking for, and communicate consistently during the due diligence process so you can stay aligned.

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