Buying or selling a business can be one of the most exciting – and stressful – moments in your professional life. Whether you’re a business owner looking to exit, or a company wanting to grow by acquisition, the process of a merger or sale is far more complex than just signing on the dotted line.

With the right preparation and advice, you can avoid common pitfalls and make the deal a success for everyone involved.

Preparation

For sellers, preparation means getting your business in order. This includes reviewing financial records, contracts, employment agreements, leases, and intellectual property. Think of it like tidying the house before putting it on the market – you want to present a business that’s organised and attractive to buyers.

For buyers, preparation involves researching the industry and being clear about your objectives: are you looking to expand your customer base, gain new technology, or enter a new market?

Due diligence

This is where buyers examine the business in detail to verify what they’re buying. It covers finances, legal obligations, compliance, customers, staff, and potential risks.

For sellers, being ready for due diligence is critical. Having clear records and organised documents can speed up the process and build trust.

Valuation and negotiation

Agreeing on a fair price and terms can be the most challenging part of the process. Valuation isn’t just about today’s profits – it’s also about brand strength, customer relationships, intellectual property, and future growth potential.

Negotiation involves more than the purchase price. It may cover payment structures, warranties, and conditions that protect both sides.

Contracts and closing

Once the terms are agreed, lawyers for both sides draft the sale and purchase agreements. These contracts are the legal backbone of the deal. They set out exactly what is being transferred, what warranties are being given, and what protections are in place if things go wrong later.

Closing the deal means ticking off all agreed conditions, such as regulatory approvals or financing, before the final transfer of ownership.

Common pitfalls to avoid

• Rushing the process: Skipping proper due diligence or pushing for a quick close can lead to unpleasant surprises later.

• Unclear contracts: Vague or poorly drafted agreements can leave both sides exposed if disputes arise.

• Unrealistic expectations: Buyers may overestimate synergies, while sellers may overvalue their business. A realistic approach reduces conflict.

• Ignoring the human factor: Staff, culture, and customer relationships are often the hardest parts of a merger or sale. Neglecting them can damage long-term value.

• Lack of professional advice: These transactions involve financial, legal, and commercial risks. Trying to “DIY” an M&A deal can cost far more than it saves.

To prepare for success, start early. Even if a sale is years away, keeping clear records, contracts, and governance in order will pay off when the time comes. Focus on value drivers – buyers will pay more for businesses with strong systems, recurring income, solid branding, and IP protection. And ensure you have the legal experts, accountants, and advisors in place so they can guide you through each step, identify risks, and ensure you get the best outcome.

A merger or acquisition is more than a financial transaction. It’s a turning point in your business journey. With proper preparation, clear contracts, and trusted advice, you can minimise the risks and maximise the rewards.

At Owen Culliney Law, we help both buyers and sellers navigate the process smoothly, protect their interests, and achieve their business goals.