Time and its fatal effects on closing a business deal are well known in the corporate space. But in nearly all cases in the Mergers & Acquisitions field, the longer it takes to close a deal, the more that it gets negotiated away.
The current economic recession has buyers taking much longer to make large purchase decisions. The slow cash flow ends up creating downward pressure on price and hinders potential deal momentum for both buyer and seller.
Speed is important when it comes to closing deals; the faster your deal closes, the less likely it will be to harm your transaction. Deals that are prolonged give way to deal fatigue and could result in a falling out, due to the fact that the process can be taxing. In addition to deal fatigue, there is a list of unforeseeable events that could take place during a prolonged period: a key client could cancel, a key recruiter/ manager could resign and the economic environment could change. But these things aren’t unconquerable if dealt with rapidly and transparently.
Some steps can be taken to mitigate the slow down of deal flow and maintain momentum to maximize results:
Staying deadline-driven. Both parties need to stay deadline-driven to progress through deals quickly. Time is a resource when it comes to deal closing. When there are constraints and deadlines, it is likely for both buyer and seller to pay attention and take deadlines more seriously. Their level of engagement during meetings and urgency between the process improves with deadlines and time constraints. It is important to:
- Outline goals to establish expectations makes for a successful process, once objectives are set in place, planning out a calendar becomes manageable. After a plan is outlined, an effective process follows.
- Set a realistic road map, time constraint, and establish due diligence parameters during meetings for both parties. Set commitments in place for the next meeting time and objectives with the other party involved before they leave the current meeting.
- Negotiate short time lapses between successive appointments with the same company.
One key to a successful deal is to be well prepared, come out strong and maintain momentum throughout the sale process with the help of strict deadlines and targets. Moving the deal actively through the timeline keeps buyers focused, and sellers motivated. Experienced buyers always expect a process and respond better to structure. Deadline driven processes are necessary for a successful deal.
Responsiveness is key to closing deals. Sellers and buyers both need to be responsive. Seller and buyer relationships are valuable partnerships hence both parties need to ask questions and challenge assumptions, and respond to one another as deliberately and promptly as possible. Both parties must have a sense of urgency in creating deal momentum, and staying engaged will lead to a successful deal closing process.
Commit to running your business as well as ever. For sellers, having their staffing and recruiting firm acquired is considered one of their company’s most important endeavors. While working to sell the company, sellers need to put their best foot forward and continue to manage the company as they have been. A good track record can easily be disrupted during the sale process but this can be easily avoided if sellers stay diligent in keeping company conditions running smoothly.
Choose a well-established and trusted advisor. A trusted advisor will discuss the steps involved, the schedule, and expectations. Building a relationship with an agile advisor is critical to get deals closed effectively. An advisor guides sellers through the process and helps both buyers and sellers to find the best fit company for both parties. Dynamic advisors will take into account the compatibility of corporate culture and find buyers that are willing to pay a top tier price for a staffing and recruiting firm. When it comes to M&A transactions, expert processes will maximize results.
If you’re ready to exit, time is of utmost importance. Increase your firm’s valuation, and get your deal closed as soon as possible with an advisor that prioritizes fast-paced transactions. Working with an M&A advisor that specializes in closing deals in record time in the staffing and recruiting industry will exponentially raise your chances of closing a good deal.