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PRACTICALÂ GUIDE
The Small Business M&A Guide
A comprehensive, nine-part series covering every stage of buying or selling a small business in Pennsylvania.
A comprehensive, nine-part series covering every stage of buying or selling a small business in Pennsylvania.
Buying or selling a business is one of the most consequential decisions a business owner will make. The process is complex, the stakes are high, and the decisions made early in a transaction often determine the outcome.
This guide walks through the M&A process from beginning to end. Each chapter addresses a specific phase or issue, from understanding the unique dynamics of small business deals to navigating working capital adjustments to managing the tax implications of a sale. The series is written for business owners in the small and lower middle-markets who want to understand what lies ahead before they engage in a transaction.
The articles can be read in order as a complete guide or individually as standalone references on specific topics.
Small business M&A operates under different rules than the transactions covered in headlines. This introductory chapter explains why the small and lower middle-markets are distinct and what that means for buyers and sellers.
An end-to-end overview of how a transaction unfolds, from initial outreach and engagement of advisors through closing and post-closing transition.
The LOI sets the trajectory of the entire deal. This chapter covers what to include, what to leave out, which provisions should be binding, and how to avoid costly mistakes at the outset of a transaction.
What buyers look for, what sellers should prepare, and how legal due diligence uncovers the risks that affect deal terms, pricing, and whether a transaction closes at all.
The foundational structural decision in any deal. This chapter compares asset purchases and equity purchases, covering risk allocation, successor liability, contract assignability, and how the choice affects both parties.
Financing options available to buyers, including SBA loans, conventional bank financing, seller financing, earnouts, and equity rollovers. Covers how financing structure affects deal terms and negotiation leverage.
How deal structure, entity type, and tax elections (including Section 338(h)(10) and Section 1060 allocation) affect the after-tax proceeds for both buyers and sellers.
One of the most misunderstood elements of a small business transaction. This chapter covers how working capital targets are set, how the peg is calculated, and how post-closing adjustments work.
Seller-side preparation, including financial cleanup, operational documentation, customer concentration analysis, and the due diligence items buyers will request. Preparation drives better outcomes.
This series is written for business owners, not dealmakers. If you are thinking about selling your company in the next few years, or considering acquiring a business for the first time, these articles are designed to give you a working understanding of the process, the key decision points, and the issues that will affect your outcome.
Every transaction is different. This guide provides the framework, but the specifics of your situation, including entity structure, industry, deal size, and tax posture, will shape the strategy. If you have questions about a specific transaction or are ready to begin the process, I welcome the opportunity to discuss your situation.