Pre-Deal Checklist

Below is a checklist of some key items to help you prepare for a successful deal process.

Build a Great Deal Team:  

• Most Buyer deal teams should include: 
  • M&A attorney 
  • Tax advisor/CPA  
  • Banker 
  • Subject matter expert (if the client is not the subject matter expert)  
  • Key/significant co-owners  
  • Other advisors and key employees as needed 

• Most Seller deal teams should include:
  • M&A attorney 
  • Tax advisor/CPA 
  • Investment Banker/Broker for a marketed sale
  • Key/significant co-owners 
  • Other advisors and key employees as needed 

• Click here for more thoughts on building a great deal team, when to get them involved, how they can create great value, and how how to get the most out of your deal budget. 

Identify Your Priorities:   

• Spell out 1-3 key priorities to help you clearly define how you create value on your deal.  This will help you stay focused, make great decisions, and will help your deal team know how to help you maximize the value of your deal on your terms. 
• Especially if you are the seller, make sure you understand the after-tax proceeds you must have in order to close on the deal.
• Click here for suggestions to help set clear priorities. 

 Understand the Workload: 

• It can take hundreds of hours of your time in order to complete a transaction. For many people, it is like working a second job during the deal process. 
• The workload is more than just the physical effort. Most deals involve a great deal of mental work, and often emotional work. Take some time to understand all of the ways that your deal will impact you, so that you are prepared for the workload.
• For first-time buyers or first-time sellers, it requires simultaneously learning a great deal of information and terminology about the deal process, making high stakes decisions, navigating complex relationships, and for buyers, also learning a great deal about the business.  

 Make a Plan for Confidentiality 

• Be sure to use email, phone and other communication that is confidential. Avoid using an employer email and phone.  
• Consider using an NDA to protect the confidentiality of conversations with the other party.  
• Set expectations or legal requirements about which employees and advisors of the other party can be contacted/communicated with directly.  

 Make a Budget 

• Get realistic budgets from each member of your deal team, and get their input on additional costs that you may have during the process. 
• Make a plan for when and how you will pay for deal costs.  
• If you’re buying the business, ask the bank about the possibility of financing deal costs. 
• Make sure to include post-closing costs if there will be any material amount of work after closing.
• Click here for more thoughts on paying for deal costs. 

 Set a Schedule: 

• Determine approximately how long the deal process will take.  
• Determine what days and times will be protected for important family, personal, and work responsibilities. 

 Plan For Wellbeing:  

• Make a plan to maintain your wellness during the deal to help successfully manage the time demands, and added stress and strain of the deal.   
• Think through things like efficient healthy meals, protecting sleep, maintaining relational health. Plan any go-to stress management techniques.  
• Consider talking to a mentor about their deal experience and what to expect, and any tips that worked for them.  
• If you have a mentor, coach, therapist or counselor, make sure they are aware of the process and its demands so that they can provide you with adequate support.  

Have Important Conversations:  

• Family: Talk with your family about what to expect from the deal process. Consider covering the following: 
  • How long the deal process will take
  • How much of your time it will consume  
  • How the process will impact family rhythms/commitments 
  • When key family rituals/commitments will resume 
  • What family times will be protected from the deal process 
  • Set a time for a get-away with your spouse or family soon after the deal closes. For sellers, about 2-4 weeks after closing can be a good time in order to ensure transition is well under way. Buyers may want to wait 4-8 weeks after closing before taking any extended time off.  

• Co-owners, Officers, and Board:
  • Have any necessary conversations with co-owners, officers and board members of your business. Get any necessary approvals for starting the deal process. Be mindful of confidentiality considerations and obligations, and the possibility that conversations could cause key team members to consider leaving.  Consider covering the following:  
    • Confidentiality   
    • Timeline for the deal 
    • Availability (bandwidth, travel schedules, etc.) 
    • Responsibilities   
    • Communication    

• Deal Team: have initial conversations with your deal team to ensure they are ready as needed. Consider covering the following: 
  • Priorities: Clearly communicate your priorities and how this deal creates value for you based on your priorities. 
  • Scheduling:  
    • Set expectations about what days and times you will generally be available to work on the deal, and what days and times will be unavailable. Cover things like travel and vacation, as well as any weekend and evening times you want to protect.  
    • Get the same information from your deal team about their general availability, and any times that they will be unavailable.  
    • Set expectations about desired timeline for the deal as a whole, and any hard deadlines. 
  • Responsibilities, Budget, and Scope of Work: Make sure there is a clear understanding of each deal team member’s key responsibilities. Get a clear budget and scope of work from relevant team members. 
  • Communication: Set expectations about any recurring meetings, and preferred means/methods of communication, and any to avoid.  

• Personal Advisors:
  • Have all necessary conversations with your personal advisors, who may or may not also be a part of your deal team.
    • Financial Advisor:
      • Talk with your financial advisor about how the deal will impact your financial plan. Be sure to discuss deal costs if they will be sourced from retirement account or otherwise impact your financial plan.  
    • Estate Planning Attorney:
      • Get advice from your estate planning attorney on how the deal will impact your estate plan and get their direction on when to discuss and make any updates to your estate plan.  
    • Personal Tax Advisor:
      • Discuss the possible impact of the deal on your personal taxes, and ask for input on any key concerns. 

 

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These resources are provided for informational purposes only, and are not legal advice. No attorney-client relationship is formed through this page. Please contact us if you’d like to inquire about our services.