In a manufacturing setting, one person is not in charge of running the whole line. Buying or selling a business is treated the same way. Business owners are tempted to think of it as one transaction handled by one advisor, but due diligence will highlight the defects of missed steps after closing.
This blog outlines how a full advisory bench can help prepare your business for a sale and act as one team, rather than disconnected steps.
How a Business Sale Works Like a Production Line
Picture your business as the raw material, and the merger or acquisition as the production line. The finished product only comes off the line if every step does its job in the right order. You wouldn’t skip a step for a product, so why would you rush the process for your business?
A business sale starts with finding the rest of the people who’ll fill the seats at the table. On the buy side, that might mean letting your network know you’re looking to acquire, meeting owners, and seeing what fits. Or it might mean hiring a broker to bring you a handpicked list of qualified sellers, fast.
On the sell side, the “rest of the table” isn’t always a stranger. Your general manager could be positioned to buy the business over time, or your competitor has shown interest in your business over the years.
With a curated team, the steps of your sale are like your plant floor.
- Quality Control: Verifying the financial materials. This is the same scrutiny you’d apply before a part ships.
- Logistics: The process of finding a buyer or seller and moving the deal forward.
- Specifications: Business valuation and determining your worth.
- Shipment: Planning for proceeds, taxes, and life after the sale
- Post-Shipment: Transferring risk and minimizing personal financial exposure.
One step at a time. Planning for your business sale can help you prepare for a deal without rushing the process. This is generally what happens when you gather a team that works together toward the same goal.
The rest of this piece goes into more detail on this process and the specific advisor attached to each step.
How a CPA Helps with Quality Control
In an M&A context, typically a CPA reviews and verifies the financial information behind a deal. The lightest version of this is reviewing financial statements alongside the valuation.
The deeper version is a Quality of Earnings report, a focused examination of whether reported earnings are accurate, sustainable, and repeatable. This brings what is true into reality, off paper.
QoE isn’t required for every deal, and for most transactions, a solid valuation paired with a CPA’s review of the financial statements is generally good enough. Whether you go further and pull in a full QoE depends on how in -depth the parties want the diligence to be. This can be driven by deal size, how complex the business is, how much financing is involved, and the lender’s comfort level before they’ll fund the deal.
How Can a Broker Help with Your Sale?
Managing the sale process itself is like being a line supervisor, doing tasks such as preparing marketing materials, identifying buyers, and running negotiations.
This is the role most directly tied to filling the rest of the seats at the table. They’re not building your business, but they’re coordinating the sequence from first contact through the signed LOI and beyond. Not every seller needs one, such as the case where your manager or competitor will take ownership, but when you seek a wider buyer pool, this is the role that organizes your buyer search.
Here’s your team that helps complete the right work at the right time:
- Business brokers: Typically handle deals directly between individual buyers and sellers.
- M&A advisors: Offer more strategic services like due diligence coordination, valuation support, and deal structuring.
- Investment bankers: Handle complex deals and bring capital-markets capability like arranging debt and equity financing and tapping relationships with private equity. A business broker will generally lead you to the investment banker if needed in your situation.
It’s worth asking your advisor what their capabilities are and understanding if that fits your business. Mismatching the tool to the job might not lead your business transaction in the right direction.
The right team will point you toward the station that can handle your situation the best. Within MBE’s Strategic Advisory Group, Savvy Business Brokers can handle this role directly. As part of the same affiliate network, the brokerage and accounting sides of a deal can work cohesively without the introductory back-and-forth stage.
Working with a broker helps create competitive tension that drives price, and the right broker matters more when the buyer pool looks different than a generic small-business sale.
Learn more about how a broker can help your manufacturing sale process.
Does Your Business Need a Valuation?
As the earlier walk-through of a deal’s shape laid out, this step generally happens before a non-binding LOI is signed. Negotiating a price range without a real valuation can mean both sides are just guessing.
This agreed-upon procedure in your business sale is called a business valuation. Determining what a business is worth is done in situations like mergers, acquisitions, or even tax planning by looking at market capitalization, revenue, earnings, and more.
Depending on the industry, the method of your valuation changes. For manufacturing, the EBITDA and asset-based valuation methods are most common.
- EBITDA: the standard metric used to judge operational profitability across heavy industry peers
- Asset-based valuation: Applied during industrial restructuring, liquidations, or severe economic downturns
Customer concentration, equipment age and remaining useful life, and backlog/order book also serve as critical inputs that adjust cash flow forecasts and risk premiums in DCF models and asset-based approaches. Analysts can penalize, increase future projections, and apply lower discount rates as valuation adjustments.
It’s important that businesses don’t price their business off what a competitor sold theirs for, like you would a product. This skips the specifications step entirely, and buyers tend to respond better to well-documented, well-supported valuations over guesswork.
This is where having a valuation analyst or an accredited appraiser on your team helps support that your business value is more than a gut feeling.
How Do I Plan a Business Exit?
A business sale is often one of the most significant financial events of an owner’s life. This kind of planning typically starts well before the exit, because the financial statements you’re keeping today need to look different for buyers and lenders.
What exactly is part of this plan?
A thoughtful exit plan typically starts with building multiple consecutive years of supportable financials well before you’re actually in a negotiation. For an owner who’s still a decade out from retiring, staying loosely connected to potential buyers along the way can be the first step. The more buyer options you have years before you retire, the more likely you are to be better positioned. A certified exit planning advisor can help owners plan for these sale proceeds with a tax, investment, or retirement income strategy.
The planning that matters most, though, is personal as much as it is financial. Understanding what a sale will cost you in taxes and what you plan to do with the cash afterward is what turns a valuation into a retirement timeline.
Think about it this way. A sale nets an owner $100,000 after tax. That’s a very different retirement conversation than if it nets $10 million, potentially changing retirement age and years of financial planning.
Tax consequences, deal structure, and retirement timeline are all connected, which makes building a team that includes both a financial advisor and an accountant a helpful strategy. MBE Wealth, our affiliated fiduciary wealth management firm, works alongside our accounting team on the proceeds side of the same.
Learn more about how MBE Wealth helps business owners.
How a Strategic Advisory Group Works Together
The accountant’s seat at the table is usually quality control. We can help review your Quality of Earnings analysis, organize your financial records, and help coordinate the rest.
A production line breaks down when stations work out of sequence, and the same logic applies to your business sale. A valuation done without CPA input can get contradicted by the numbers a QoE generates. A purchase agreement drafted before diligence is complete has to be reopened and renegotiated once real findings come in.
You don’t have to find the rest of your team on your own. Through the MBE Strategic Advisory Group, we’ve established relationships with businesses to cover each step of your process, understanding how our part of the work fits with the others. We can help you understand which advisors your deal needs, in what order, and how the work connects.
Your production line doesn’t need to be handled alone.