When Should You Speak to an M&A Advisor?

7 Apr

Why the best outcomes are shaped long before a sale process begins

For many founders and CEOs of privately owned businesses, engaging an M&A adviser is seen as the starting point of a sale process. The assumption is simple: once you decide to sell, you bring in advisers to execute.

In practice, this mindset often leads to sub-optimal outcomes.

The reality is that the most important work in any transaction happens before a business is ever taken to market. And the earlier a founder engages with a trusted M&A adviser, the greater the impact on timing, valuation, and ultimately the quality of the outcome.

This does not mean starting a sale process early. It means starting to think clearly, with the right perspective, well before a decision is required.

The common misconception: advisers are for execution

In many cases, founders only engage an M&A adviser once they are already committed to selling. By that stage:

expectations are often fixed,
timelines are compressed,
and key value drivers may already be set.

The adviser’s role becomes execution: preparing materials, contacting buyers, negotiating terms.

While execution matters, it is only one part of the equation.

The more valuable role of an adviser - particularly for mid-sized, privately owned businesses - is strategic preparation which is one of the core strengths of Dyer Baade & Company.

Why timing and valuation are linked to preparation

In the previous article, we explored the question: when is a good time to sell a business?

The answer depends on alignment between:

business performance,
market conditions,
ownership situation,
and optionality.

What is often overlooked is that all four of these factors can be influenced - sometimes significantly - through early, strategic preparation.

An experienced M&A adviser can help shape:

how the business is perceived by buyers,
how risks are understood and mitigated,
and how value is articulated and defended.

This is where timing and valuation intersect.

Why early engagement matters

Engaging an M&A adviser early does not mean committing to a sale. It means gaining external perspective at a point where change is still possible.

When advisers are brought in late, their ability to influence outcomes is limited. At that stage, they can optimise process - but not fundamentals.

When engaged early, advisers can help:

identify gaps that affect valuation,
refine the equity story,
prepare management for investor scrutiny,
and ensure the business is positioned in line with market expectations.

This preparation often takes time. And time, in this context, is a strategic asset.

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The difference between process-driven and strategic advice

Not all M&A advisers operate in the same way.

Process-driven advisers focus on:

running competitive processes,
generating buyer interest,
and closing transactions efficiently.

This approach works well when the business is already prepared and timing is clear.

Strategic advisers operate differently. Their focus is on:

whether a transaction should happen at all,
when it should happen,
and how the business should be positioned before engaging the market.

This distinction matters.

For founders, the greatest value is rarely in accelerating a process. It is in ensuring that when a process begins, it is the right one.

How early advice can improve valuation

Valuation is not a fixed outcome. It is influenced by how a business is presented, understood, and perceived by buyers.

Early engagement with a strategic adviser can affect valuation in several ways.

1. Clarifying the equity story

Buyers invest in narratives supported by evidence. A strong equity story explains:

why the business is attractive,
how it will grow,
and what makes it resilient.

Many businesses have strong fundamentals but struggle to articulate them convincingly. Refining this narrative early can materially influence buyer perception.

2. Addressing risks before they are priced

Every business has risks. What matters is whether they are:

understood,
managed,
and credibly explained.

If risks are discovered late in a process, they often lead to:

valuation discounts,
renegotiations,
or loss of buyer confidence.

When addressed early, these same risks can be neutralised or reframed.

3. Preparing management for investor scrutiny

Private Equity firms and strategic buyers assess not only the business, but the people running it.

Management teams that are:

aligned,
prepared,
and credible under scrutiny,

tend to drive stronger outcomes.

This preparation cannot be done in a few weeks. It requires time and iteration.

4. Creating competitive tension

Competition drives value. But competition depends on:

the right buyer universe,
credible positioning,
and disciplined process design.

Early preparation increases the likelihood that multiple high-quality buyers engage meaningfully.

Why waiting reduces your options

Many founders delay engaging advisers because they are “not ready.” Ironically, this often reduces readiness over time.

Delaying engagement can lead to:

increasing founder dependency,
lagging governance structures,
unclear financial reporting,
or unresolved strategic questions.

By the time an owner decides to act, these issues may limit both timing and valuation.

The intention to wait is often rational. The outcome is often constrained.

The role of Private Equity in shaping preparation

Private Equity firms are among the most structured and disciplined buyers in the market. Their expectations influence how businesses are assessed across the board.

Understanding how Private Equity evaluates:

growth,
risk,
management,
and exit potential,

provides a useful benchmark for preparation.

An experienced adviser can help founders see their business through this lens - long before any interaction with investors.

Why early conversations are not a commitment

One of the most common concerns founders express is that speaking to an M&A adviser will “start something.”

In reality, early conversations are about understanding, not committing.

They allow owners to:

test assumptions,
explore scenarios,
and gain clarity on what would need to change to achieve different outcomes.

Many founders who engage early ultimately decide not to sell. But they do so with greater confidence - and better preparedness for future decisions.

The cost of engaging too late

When advisers are engaged late, several dynamics tend to emerge:

expectations are difficult to adjust,
timelines are compressed,
buyers have greater leverage,
and value drivers cannot be fully optimised.

In these situations, even a well-run process cannot compensate for lack of preparation.

The difference between a good outcome and a great one is often determined months or years before a transaction begins.

What to look for in an M&A adviser

For founders and CEOs, choosing the right adviser is critical.

Beyond execution capability, consider whether the adviser:

is willing to challenge assumptions,
focuses on outcomes rather than transactions,
understands mid-sized, privately owned businesses,
and has a genuinely strategic perspective.

The ability to say “not yet” or “not this way” is often more valuable than the ability to run a process quickly.

A practical perspective for founders

If you are asking yourself whether it is time to speak to an M&A adviser, the answer is usually earlier than you think.

Not because a transaction is imminent - but because:

options are still open,
changes are still possible,
and timing is still under your control.

In our experience it can take up to two years to prepare for an exit. If done correctly, the added value can be very substantial and easily exceed a valuation premium of 100% - 200%.

A final reflection

Selling a business is not an isolated event. It is the culmination of decisions made over time.

The role of an M&A adviser is not just to manage the final stage - but to help shape the path leading to it.

For founders who engage early, the outcome is rarely accidental.

A quiet next step

If you are starting to think about the future of your business - even at an early stage - a confidential conversation can help clarify what is possible, what is premature, and what could be improved over time.

Not to start a process.
Not to create pressure.

Simply to ensure that when the time comes, the decision is made with clarity - and on your terms.