Sponsorship Spot Open - reply to this for a rate sheet.

Create A Simple Marketing Plan - Save Time and Money

Start the year off right with a simple marketing plan - I’ve dusted off a course I used to sell back when I was a marketing coach. I'm not sure how long I’ll leave this out there, but check it out now. Create A Simple Marketing Plan -

Your net worth will never be greater than your network:

Network and hang out with other Acquisition Entrepreneurs and professionals - Join Here 

Don’t Be Stuck -

Need a CPA, Attorney, Due diligence help, Sourcing, Valuations ETC? If you are seeking professional help to move your M&A game forward, reach out. Don’t be stuck after interviewing over 190+ pros I have referrals to give you. Click here → We Know A Guy!

This week on How2Exit:

E174: Acquisition Entrepreneur Michael Frew on Buying and Growing SaaS Companies - Watch Here

About The Guest(s):
Michael Frew is an acquisition entrepreneur with a background in engineering. He has been acquiring and running online businesses for the past eight to nine years, specializing in SaaS software. Michael enjoys working with other engineers and focuses on cloud infrastructure, engineering tools, and engineering services.

Summary:
Michael Frew shares his journey from being an engineer to becoming an acquisition entrepreneur. He explains how he stumbled upon the idea of acquiring online businesses and why he decided to pursue this path. Michael primarily focuses on acquiring SaaS software companies and discusses the factors he considers when evaluating potential acquisitions. He also talks about the market conditions for buying and selling businesses and the importance of finding a team that can successfully replace the original owner. Michael emphasizes the need for a good tech stack and the role of customer service in growing and maintaining a business. He concludes by encouraging engineers to consider acquisition entrepreneurship as a viable career option.

Key Takeaways:

• Acquisition entrepreneurship is a career option for engineers looking to transition from their corporate roles.

• Finding a team that can successfully replace the original owner is crucial when acquiring a business.

Article: 

The Journey from Engineer to Acquisition Entrepreneur: A Comprehensive Guide

Secondary Sponsor:

Your business Here - email [email protected]

If you are looking to exit above $5M up to $25M - This is the right solution: Together with ITX M&A Marketplace - click here to sell your MSP Company (Sponsor)

Growth & Acquisition - News Newsletter

Attention Business Brokers, Advisors, Acquisition Entrepreneurs, and SMB Owners!

Do you want to stay ahead of the game in the SMB M&A market? The Hub is the solution you need! This curated newsletter brings you the best highlights from blogs, podcasts, YouTube, and news sources, all in one place. Growth & Acquisitions

Founding Member Shout-Out (Still room here -$400 one time)

Shout out to our new founding member. With over 30 years in M&A, this company offers the lowest priced (way undervalued) course on helping you buy good businesses. Very underpriced - get it now before they finish upgrading the site and very likely up the pricing.

Thanks to Sweetview Partners, an Acquisitions company looking to buy Texas-based B2B companies in the $1MM - $30MM revenue range. Click on the logo to check them out.

E175: Financial Advisor Tyson Ray Discusses the Importance of Exit Planning for Business Owners - Watch Here

About The Guest(s): Tyson Ray is a founding partner of Form Wealth, a financial advisory firm that specializes in exit planning for small to medium-sized businesses. He has extensive experience in helping business owners navigate the complexities of selling their businesses and planning for retirement.

Summary: In this episode, Ronald Skelton interviews Tyson Ray, a financial advisor and exit planning expert. They discuss the importance of involving a financial advisor in the process of buying or selling a business, and the role they play in helping business owners plan for retirement. They also touch on the challenges that business owners face when it comes to understanding the financial implications of a sale and how to make the most of the proceeds.

Key Takeaways:

• It is crucial for business owners to start planning for their exit at least three to five years before they intend to sell.

• Financial advisors can provide valuable insights and guidance on how to maximize the value of a business and plan for retirement.

• Quotes:

• "Financial advisors need to stop selling last week's lotto numbers for a fee and start focusing on the bigger picture." - Tyson Ray

• "Selling a business isn't an overnight thing. It requires careful planning and consideration of various factors." - Ronald Skelton

• "The more time we have, the more options we have. The shorter time we have, the less options we have." - Tyson Ray

• "Your business is worth more if your plan is in place. Your employees are more loyal if the plan is in place." - Tyson Ray

• "The biggest mistake business owners are making is letting the urgent crowd out the important." - Tyson Ray

Articles:

How Financial Advisors Can Add Value in Business Exit Planning

Classifieds

ISO - Seeking profitable B2B newsletters, blogs, social media groups, etc, must have over 2000 subscribers, be more than 18mo old, and be profitable. Submit here or Contact Ron [email protected]

ISO-seeking business owners looking to grow and accelerate Valuation to retire wealthy within 2-5 years. May play a key spot in rollup if you qualify. Must have a profitable business, $2M-$10M, >=10 years in business. Contact: [email protected]

Your Ad Here - $50 / week 240 characters - send requests to [email protected]

Seeking contributors, if you are an advisor or willing to do deep research on a topic for some recognition, please email [email protected] with the subject: “I’d like to contribute to DEEPER”

FROM THE Editor:

Disclaimer: This newsletter is provided for informational & educational purposes only, and should not be relied upon as legal, business, investment, or tax advice. We are not attorneys, tax, or financial advisors and not qualified to give any such advice.  

** indicates an affiliate commission will be paid if you buy something.

From Now Until Jan 2 2024 - Everyone gets the Deep Dive articles.

DEEPER: Building and Managing M&A Teams: A Comprehensive Guide

Introduction: I hear so many people talk about building a deal team that I figured I’d cover it here. I’m NOT convinced everyone needs an entire team. So, review this as a set of skills you need to cover and figure out which you can do and which needs someone’s help with.

This article delves into the nuances of building and managing robust M&A teams, highlighting the significance of cross-functional collaboration, and underscoring the importance of continuous training and development.

I. Structuring an Effective M&A Team

• A. Understanding the M&A Team's Role: Overview of the responsibilities and objectives of an M&A team.

• B. Core Team Composition: Details on key roles such as M&A Lead, Financial Analyst, Legal Advisor, HR Specialist, and IT Specialist.

• C. The Role of Leadership: The importance of leadership in guiding the team and making strategic decisions.

• D. Outsourcing vs. In-house Teams: Pros and cons of building an internal team versus hiring external advisors and consultants.

II. The Importance of Cross-Functional Collaboration

• A. Creating a Collaborative Culture: Strategies for fostering a culture of collaboration and open communication.

• B. Integrating Diverse Skill Sets: Leveraging the diverse expertise of team members for a holistic approach.

• C. Cross-Departmental Engagement: Involving various departments like finance, legal, HR, and IT for a comprehensive analysis.

• D. Overcoming Silos and Barriers: Tactics for breaking down silos that can hinder effective collaboration.

1. Structuring an Effective M&A Team

A. Understanding the M&A Team's Role An M&A team is responsible for the smooth execution of mergers and acquisitions from the initial stages of target identification to the final stages of integration. This team navigates through complex financial analyses, legal procedures, and strategic planning. Its ultimate goal is to ensure that the M&A transaction aligns with the company's strategic objectives and adds value to the organization.

B. Core Team Composition The composition of an M&A team is critical. Key roles include:

• M&A Lead: Responsible for overall strategy, coordination, and communication.

• Financial Analyst: Handles valuation, financial due diligence, and modeling.

• Legal Advisor: Ensures compliance with legal regulations and oversees contractual aspects.

• HR Specialist: Manages workforce integration, cultural alignment, and personnel issues.

• IT Specialist: Assists in integrating technology and systems of the merged entities.

C. The Role of Leadership Effective leadership is the linchpin of successful M&A teams. Leaders must possess not just technical expertise but also soft skills like communication, empathy, and decision-making. They should be capable of steering the team through uncertainties and complexities inherent in M&A transactions.

D. Outsourcing vs. In-house Teams The decision between forming an in-house team or outsourcing to external advisors depends on factors like the company's M&A experience, the complexity of the deal, and resource availability. While in-house teams offer better control and understanding of the company's culture, external advisors bring specialized expertise and an objective viewpoint.

2. The Importance of Cross-Functional Collaboration

A. Creating a Collaborative Culture A collaborative culture is vital for M&A success. This involves promoting open communication, encouraging idea sharing, and fostering an environment where different perspectives are valued. Regular meetings, team-building activities, and transparent communication channels can aid in building this culture.

B. Integrating Diverse Skill Sets M&A teams must integrate a range of skill sets, from financial acumen to legal expertise and beyond. This diversity ensures that all aspects of the M&A transaction are thoroughly analyzed and addressed.

C. Cross-Departmental Engagement Engaging multiple departments ensures a more comprehensive approach to M&A. Each department can provide insights into their areas of expertise, leading to a more informed decision-making process.

D. Overcoming Silos and Barriers To overcome organizational silos, M&A teams should work on creating inter-departmental liaisons and ensuring regular inter-departmental meetings. Leadership plays a crucial role in facilitating this integration and ensuring that barriers to effective communication and collaboration are minimized.

Job descriptions:

1. The M&A Lead (or M&A Manager)

Background and Experience:

• May not necessarily require an MBA; practical experience in smaller-scale acquisitions can be more valuable.

• Should have direct experience in leading or significantly contributing to acquisitions in the lower middle-market range.

• Familiarity with the specific challenges and opportunities of smaller business transactions.

Skills and Personality:

• Strong local market knowledge and the ability to assess potential in smaller companies.

• Entrepreneurial mindset to understand and appreciate the nuances of small business operations.

• Adaptability and resourcefulness, often working with fewer resources and less structured environments than large-scale M&A.

2. Financial Analyst

Background and Experience:

• Experience in analyzing financials of smaller businesses, which might not have sophisticated reporting systems.

• Knowledge in assessing businesses with less formalized financial data or more straightforward business models.

Skills and Personality:

• Pragmatism in financial analysis, recognizing the limitations of available data.

• Creativity in valuation, understanding that standard valuation models may need adjustments in this context.

3. Legal Advisor

Background and Experience:

• Familiarity with legal challenges and compliance issues specific to smaller businesses. A Business attorney that understands M&A. DO NOT use your family attorney. M&A is its own beast that requires very specialized training.

• Experience in dealing with less formalized corporate structures and ownership arrangements common in small businesses.

Skills and Personality:

• Versatility in handling a broader range of legal issues, from contract law to potential local regulatory concerns.

4. HR Specialist

Background and Experience:

• Experience in dealing with smaller teams and potentially less formalized HR structures.

• Rules change in the US when there are more than 50 employees. Make sure your HR persons know both sides.

• Understanding of the impact of M&A on small business culture and employee morale.

Skills and Personality:

• Strong interpersonal skills to manage the more intimate setting of a small business.

• Ability to handle HR issues that might be less common in larger corporations, such as familial relationships within the business.

5. IT Specialist

Background and Experience:

• Experience in handling IT systems of small to medium-sized businesses, which might be less complex.

• Skills in quickly integrating or upgrading IT systems to meet the needs of the acquisition.

• Software license compliance, Open source vs. paid, right number of licenses for the user base.

Skills and Personality:

• Flexibility and creativity to work with potentially outdated or less sophisticated technology systems.

Conclusion: For acquisitions of businesses valued at less than $25 million, the M&A team needs to be adaptable, resourceful, and have a solid understanding of the unique dynamics of smaller businesses. This includes being able to work with less structured data, understanding local market dynamics, and appreciating the personal and direct nature of small business operations. The emphasis is on practical experience and an entrepreneurial approach, coupled with the ability to creatively navigate the unique challenges presented by smaller-scale acquisitions.