Posted: 15.09.2023

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Jamie Hope, Partner at Provantage Corporate Finance, discusses the importance of preparation for success in business transactions.


We are a huge advocate in taking time to prepare a business for any transaction – making sure our clients are ready for what lies ahead on the deal.

We are seeing a softening in M&A market volumes and deals are taking longer to close as buyers cast an even more diligent eye over the target businesses – detailed preparation is even more relevant to ensure a successful outcome.

Preparation is not just pulling together a sales document. The documentation is an output–quality thought process and plenty of hard work needs to go into the preparation. All too often we see a glossy document, without the substance behind it and any potential deal can unravel as an acquirer scratches below the surface.

Preparation is all about delivering consistency and thoroughness – as you engage with any acquirer it is important to ensure all messaging is the same, whether it is a sales document, or a LinkedIn profile, right through to the end of the diligence process.

A structured preparation process will give you the best chance of achieving a fantastic outcome for your business. Included below are example areas we discuss with our clients as part of any preparation phase.

How is my business great?


Before you rush into drafting sales documentation take time to think about your business in real detail and challenge yourself, for example

  • Strategy/business model – are you clear on what this is? When we meet businesses, they are normally great at explaining what they do, how they do it and who their customers are. However, they do not always have a clear strategy and cannot articulate their value proposition. What do you provide? Why is it needed? What differentiates you from the competition? Answering these questions clearly and focused will separate the great businesses from good businesses and make them hugely valuable
  • Financial performance – What KPIs do you monitor? Are these the right ones? Does your financial performance (historic/forecast) reflect your strategy? Are your historic and forecast numbers reported on the same basis? Do you really understand the underlying trends?
  • People – Have you got a complete management team? Do you need to invest in the team in certain areas? Do you have a management/organisational structure? You will be surprised by the number of businesses that do not have one
  • One factor that is often not addressed early enough, is the alignment of shareholders and the management team.  What are the shareholder objectives? Do they want to stay short/medium/long term? Are management incentivised for any deal/the future? Are they aware/should they be made aware of any process? Who is really key in the business?
  • As you reflect on the points above, ask yourself if the external face of the business is entirely consistent with your strategy – how are you represented on social media? What does your PR and marketing material say? What are the website/trade press messages?

Making diligence confirmatory not revelatory – No surprises!


Get your housekeeping up to date – you will need to share a lot of information as part of the diligence process. Whilst it is not the most exciting area – it is worth remembering that not preparing thoroughly for this in advance could cost you millions.

If you prepare board packs – review them for sensitive areas. Are you preparing consistent and regular management accounts? Relevant KPIs, and accounting policies correct? We are seeing some really interesting analytics tools that can save huge amounts of time and more importantly can present your business in the right light to any potential buyer.

Review your business in detail for any key issues – corporate structure, financial, tax, commercial contracts, IP, product, technology, employment, litigation, insurance, property and pensions.

Every business has issues – the skill is how and when you engage with the buyer on these issues that make a massive difference. The buyer is looking to minimise risk as part of the diligence process – making sure the buyer feels positive is key. Supply information timely, present the issues and show how they are being managed, and share good news about the business – they will then see the business is well controlled and their risk is minimised.

The flip side is if diligence uncovers issues you were unaware of – then the buyer will get concerned, likely doing further diligence, which could unsettle them further. This can lead to a restructuring of the deal or even the buyer walking away.

To sum up, preparation is key. It is never too early to start planning and preparing, take your time, be thorough and deliver a consistent message from start to finish – then you can achieve a fantastic outcome.

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