4 Mistakes That Will Kill Your Deal

About the Episode

Learn the absolute biggest mistakes sellers make, straight from a buyer who has acquired over 20 businesses and sees thousands of deals. Prepare for your business exit by fixing these mistakes now to secure your ideal closing price.

The more organized and upfront the information is, the cleaner the financials are, the higher the price

Mark Fleming

What You’ll Learn

• Hire a Seasoned M&A Advisor to Set Realistic Expectations: Selecting an experienced, knowledgeable advisor who understands EBITDA valuation is the most crucial step for a successful sale, as they are your buyer’s only true contact. Inexperienced advisors often overpromise a price based on unprovable add-backs, frustrating buyers and ultimately leading to failure or a lower final price.
• Avoid Excessive Add-Backs to Maintain Credibility: Buyers, especially those using bank financing, will reject numerous or unprovable Seller’s Discretionary Earnings (SDE) add-backs, which signals a lack of honesty and raises red flags about the business’s quality. Limit discretionary adjustments to a verifiable few and consider running a clean company for at least a year to maximize your sale valuation.
• Engage M&A Counsel Early to Resolve Contract Sticking Points: Delaying the introduction of an experienced M&A attorney forces sellers to fight for non-market terms (like total freedom from liability), needlessly stalling or killing the deal. Experienced counsel quickly navigates complex issues like reps and warranties and moves the transaction to a faster close.
• Buy Reps and Warranties (R&W) Insurance for Peace of Mind: For a 1% cost of the purchase price, you can transfer your liability for unknown issues and fraud claims to an insurance policy, ensuring you sleep at night after closing. This is a game-changer for business continuity that removes a huge financial risk for sellers and simplifies the buyer’s due diligence.
• Plan Your Post-Sale Identity to Avoid Emotional Shock: Selling your business is a traumatic, life-changing event, and many sellers struggle with a sudden loss of identity and purpose after closing. To prevent emotional devastation, begin planning how you will fill your time and energy after your exit well in advance of the sale.

Topics Covered

Want More? Related Resources:

• Adjusting Financial Statements: A Complete Guide
• Business Broker & M&A Advisor Agreements | A Complete Guide
• The Role of M&A Lawyers When Selling Your Business

Meet Our Guest

Mark Fleming

President of Owner Actions, Inc| Columbus, OH

Mark Fleming is a seasoned investor and entrepreneur with over 20 years of experience in both public and private markets. As a CFA charter holder and FRM designation holder, Mark brings deep financial expertise to his work, which spans a diverse portfolio of small businesses across the United States. His journey includes the successful acquisition and operation of a range of small businesses, as well as founding and exiting ventures.

LinkedIn: https://www.linkedin.com/in/mark-fleming-cfa-frm-b7002b