M&A Tips: Smart Moves for Business Buyers and Sellers

Buying or selling a business isn’t like picking up a new pair of shoes. It’s like custom designing them, breaking them in and ensuring these shoes can carry you the distance. Just as they need to fit your stride and endure the terrain, deals can be thrilling, stressful and occasionally a little messy. But the right preparation and materials can turn what feels like a gamble into a confident step forward.

Here are a few sharp, real-world tips to keep both buyers and sellers grounded during the M&A process.

Buyers: Pinpoint Your Dealbreakers

Acquisition enthusiasm is great but blind optimism is not a due diligence strategy. Take a step back and define your dealbreakers before diving into financial statements, culture assessments or a mountain of contracts.

Ask yourself: what are the issues I cannot live with? Maybe it’s regulatory risk. Maybe it’s an overreliance on a single customer. Or maybe it’s a technology stack that feels held together with duct tape and crossed fingers. Not every issue is fatal. A clunky process or outdated software can often be fixed. But if you don’t have the people, resources or time to handle those problems post-close, what seems like “no big deal” now can quickly morph into a nightmare later.

Deal fatigue is real. Having clear, upfront boundaries helps you avoid wasting time and resources chasing a transaction that was doomed from the start.

A Seller’s Dream: Options

Here’s the golden rule of selling: do it when you don’t have to.

Sounds counterintuitive, right? But businesses that go to market under pressure — whether financial, personal or operational — rarely get the best outcomes. Having options gives you leverage, translating directly into value.

What do “options” look like in practice?

• A full sale to a strategic buyer who wants to fold your business into theirs
• A sale to private equity, which may mean rolling some equity forward
• A partial sale to family members or management if you want to pass the torch more gradually

Each path comes with different implications for cash flow, control and legacy. Unfortunately, no one can hand you a crystal ball and declare which is right for you. Fortunately, the next best thing exists: an experienced transaction advisor who can walk you through scenarios and help weigh trade-offs.

Starting conversations early can save you headaches (and big dollars) down the road. Sellers who understand their options and plan ahead almost always come out on top.

Buyers: Watch for Red Flags

Selling a business is personal. For many owners, their company is their “baby.” That makes the process emotionally charged and, at times, unpredictable.

Buyers should watch for these three red flags. They often signal that a seller isn’t quite ready to let go:

1. Dragging their feet on information: If every request feels like pulling teeth, you should ask yourself: is this just disorganization or a deeper unwillingness to be transparent? Trust your gut. A seller who struggles to deliver information may not be ready to move forward.
2. No transition plan: A smooth transition doesn’t happen by accident. Consider it a warning sign if you haven’t seen or heard about how leadership, customer relationships or key employees will be handled after closing. No transition plan usually means the seller hasn’t thought through all the steps involved in a successful handoff.
3. Nothing to look forward to: This one sounds soft but it’s surprisingly practical. Sellers who have no plan for what comes next — whether it’s retirement, a new business venture or simply more time with family — can struggle to let go. Knowing what they’re moving toward helps the deal move forward.

Buyers should tread carefully when these signs appear. It doesn’t always mean you should walk away but you should go in with eyes wide open.

A Hidden Problem and its Fix

Here’s something that often gets overlooked: employees.

For buyers, employee turnover and disengagement can quietly eat away at value long after a deal closes. Productivity and morale can tank if people feel uncertain, overlooked or disconnected during integration — along with your bottom line.

The fix? Move quickly to integrate what employees do and how they do it, while making sure they stay engaged and motivated. Successful acquirers buy a business but also the people who make the business run. Ignore this and the “hidden costs” could delay or even derail the return on your investment. 

One powerful but often underutilized tool for sellers to protect value is the transaction bonus. These incentives are paid to key employees to keep them motivated and committed through the sale or merger process. Usually structured as a cash payment — a flat amount, a percentage of the deal or a multiple of salary — they’re contingent on successful deal completion. Beyond retention, they help ensure continuity, align employees’ interests with shareholders and reduce anxiety about what’s next.

Common approaches include:

• Deal support bonuses for employees who help meet transaction milestones
• Value-sharing awards tied to maximizing the company’s sale price
• Retention bonuses to encourage key team members to stay through the transition
• Equity-based awards linked to closing or integration milestones

Transaction bonuses are a strategic lever for sellers who want to safeguard expertise, sustain momentum and ensure a smoother post-deal transition. 

Know When to Walk Away

The hunt for a deal can feel tantalizing. You’ve put in the hours, poured over the numbers and convinced yourself it should work. The financials may check out on paper. But hidden obstacles — operational inefficiencies, cultural mismatches or outdated infrastructure — can lurk just beneath the surface. The question is: are these fixable challenges or dealbreakers in disguise?

That’s where an operational efficiency assessment comes in. Evaluating a target company’s processes before you sign helps you understand future profitability, highlight internal roadblocks and calculate whether the cost of improvement is worth it.

If the red flags start to pile up, don’t let sunk-cost thinking cloud your judgment. Sometimes, walking away is the smartest investment you’ll ever make.

The Bottom Line

M&A is equal parts strategy and psychology. Buyers need to know where to draw the line, sellers need to explore their options and both sides need to be tuned in to subtle signs that can make or break a deal.

There’s no universal playbook. Every deal is unique. But you can transform uncertainty into opportunity if you go into this process clear-eyed, prepared and supported by the right advisors.

Want to talk through what these M&A tips mean for your business? Our Transaction Advisory Services team is here to help you navigate your options and position yourself for success.