Considering M&A After Tax Season? Use This Punch List to Optimize Your Advantages

Much like the certainty of death and taxes, after every tax season many CPAs will wonder if there is a better way. With all the M&A activity of recent years, doing a deal has become a common road to that better way.

If you are one of those CPAs or CPA firms seeking to complete an M&A transaction before the next tax season, the punch list below should help put you in a position of strength.

1. Analyze your motivation. Perform an objective assessment of tax season and understand the business reasons to do a deal, not just the emotional triggers. Buyers and sellers both need to have strong business motivation.

2. Be data savvy. More than being just up to date, it’s important to know what kind of data to have and what the benchmarks will be. In deal-making, data is the magical language, and both buyers and sellers need to be armed.

3. Assess your strengths and weaknesses. Objectivity will allow for better decision-making. The parties must be confident that a deal will mitigate weaknesses and accentuate strengths.

4. Conduct discovery. Talk with firms who have been through the process and ask about the highs and lows. Talking with strangers may prove more valuable than speaking only with people you know.

5. Gain competitive intelligence. Consult with an experienced M&A advisor who specializes in your firm size and region. You need to know how you stack up.

6. Establish a list of wishes and requirements. Set your priorities and rank them so you can focus on the important issues that matter most to you, right from the start.

7. Build a team. Each side will need an attorney who has transactional smarts, and each side will benefit by involving skilled people internally and externally in negotiations, integration, and due diligence.

8. Design your process. Timing and timeframes will be critical to success. Outline your steps. Communicate prudently, both internally and externally.

9. Clarify the vision. Both the buyer and seller must have a view of the tangible outcome of a transaction, and their views must be compatible.

10. Identify and address anxieties. Change can be nerve-wracking. Addressing anxieties early will help you and your team focus on the feasibility of achieving what may be required.

All parties to a deal must be prepared and ready to pivot. This punch list will get you started. Many deals germinate right after tax season, so readiness will be in all parties’ best interest.