How to Sell Your Business in Any M&A Market

Why You Can’t Time Conditions, and What to Do About It

Most entrepreneurs know that the state of the market when they’re selling their business can have a significant impact on the final dollar amount and terms of their deal. And of course, they want to sell in the absolute hottest market possible. 

But early in my conversations with founders looking to sell, I often have to break the bad news that “timing” the M&A market right is a lot more about luck than legwork.  

In these discussions, I can always follow that up with the good news: the market environment is only one element that drives deal outcomes, but preparation is the variable that really moves the needle. And you can prepare a company well under any market conditions.  

In this article, I’ll focus on three things you can control to improve your company’s attractiveness to buyers, even in non-boom times: clean and differentiated positioning, a disciplined growth narrative, and thorough bidder identification. But first, it’s worth discussing why, as tempting as it can be, trying to predict the M&A market is likely a waste of effort.  

Market reads look backward by definition 

Every market indicator, from buyer appetite data to EBITDA multiples in the industry, is based on deals that have already closed. These things describe the past. The stock market makes for a great comparison: by the time a bull market or peak is confirmed, it might have already slipped by.  

The same lag applies to M&A conditions, with similar consequences for waiting too long. Even experienced advisors can describe today’s conditions but not may not be able to reliably predict where buyer appetite will sit in three to 12 months when a process closes. 

This isn’t to say that you should strike while the iron’s hot and sell right now. You should be wary of anyone pushing you into the biggest financial transaction of your life before you have enough information or feel ready.  

My point is that, because the market can’t be timed with high accuracy, your best path forward is often to focus as heavily as you can on what you can control, regardless of when you officially launch the process. 

Making preparation work for any market 

So what makes for effective preparation before going to market? There’s never a shortage of levers you can pull; the challenge is in sifting through them all to find the ones that are likely to have the greatest impact on your M&A outcome. 

Here, I’ll focus on the three we’ve found to be at or near the top of the list in our investment banking work with more than 120 clients across a wide range of industries. 

Lever 1: Positioning your company right 

Your positioning is the way that you present your business to buyers. You want to show yourself in a good light, but also get ahead of any potential flaws (real or perceived) before a buyer is surprised by them.  

These flaws can include any inconsistencies or possible misconceptions that a buyer might find in the middle of a process and use to their advantage as negotiating leverage. Everything a buyer catches on their own (rather than hearing a valid explanation for upfront) could lead to a price reduction. It signals that you either didn’t know about a problem or didn’t disclose it, which can erode trust from the other side of the table. 

And remember, you’re likely selling a business for the first and only time, while a buyer has probably gone through this process many, many times. It’s not if they find and flag these types of problems, but when. 

Before engaging in a bidder auction, it’s important to, at the very least, normalize your financials (i.e., remove one-time or discretionary items like owner compensation), resolve any customer or vendor concentration issues, and clarify any organizational or legal loose ends. You can take these actions regardless of what the broader M&A market is doing, and they can boost your credibility and strengthen your pitch. 

Lever 2: Telling a disciplined growth story 

Because buyers price deals based on future performance, your narrative describing where the business is headed is even more important than where it’s been. 

So what is a “disciplined” story? It’s one that’s supported with consistent monthly data and not just optimistic, blue-sky projections. Good data points to highlight will vary based on your business model, and might include the following:  

• Monthly recurring revenue or the bookings trend, which ideally shows that new customer cohorts are performing as well or better than older ones (signaling repeatable growth). 
• Customer retention and expansion metrics can identify whether growth is coming from a durable base or requires constant new customer replacement. 
• Sales pipeline and conversion rates show both how well historical opportunities have converted and how many opportunities are lined up waiting to convert. 
• Unit economics such as customer acquisition cost, payback periods, and margins by product line, channel, or customer segment demonstrate scalable versus unsustainable growth. 

Lever 3: Identifying a diverse range of bidders 

The breadth of your potential buyer universe matters more than timing the market, because a qualified group of bidders creates competitive pressure regardless of macro conditions.  

Your M&A advisor (most likely an investment bank if you own a middle-market business) should look far and wide for all types of buyers, both financial and strategic, stretching beyond the usual suspects in your space. I’ve helped close life-changing deals with what most would consider outlier buyers, whether that meant an international company looking to expand into a new market or a private equity group just becoming active in the industry.  

Deals still closed during historically difficult windows for M&A—the 2008–2010 period, COVID—because sellers had advisors running wide buyer identification processes that found an active, motivated universe. 

Preparation matters, especially in less-than-ideal market environments 

Companies that prepare well limit the negative effects of an unfavorable M&A market. You shouldn’t completely ignore buyer appetite and industry trends, but if you feel personally ready and your business is buttoned up for a sale, then macro conditions shouldn’t necessarily stop you from heading to market on your schedule. Waiting for the perfect indicators may cause you to miss your window for any number of reasons, performance being the most common. 

If you’re curious how to determine how ready you and your business are for a sale, then read Class VI’s newest report Is It Time? A Business Owner’s Guide to M&A Readiness. 

And if you’re considering a sale over the next few years or you’re already positioning your business to go to market, I’d love to hear about how you’re approaching the process. Reach out any time!