How to Prepare a SMB for Sale

Sam Rosati and Eric Pacifici break down the realities of sell-side M&A in the lower middle market, drawing from their experience advising both buyers and sellers. They share practical insights on when business owners should begin preparing for a sale, why proactive legal organization matters more than most realize, and how the dynamics of today’s market favor well-prepared sellers. The conversation goes beyond surface-level advice, diving into deal structure, negotiation strategy, and the importance of certainty throughout the transaction process. They also explore what actually drives value in a business and how owners can position themselves for a successful exit long before going to market They discuss: Why business owners should start preparing for a sale years in advance, not after receiving an LOI How to organize legal, operational, and contractual documentation to avoid deal friction The role of brokers and attorneys in running a competitive, proactive sale process Key considerations at the LOI stage including price versus terms and buyer credibility What makes a business truly valuable and sellable beyond just financial performance Links: SMB Law Group - https://smblaw.group/ Evan on LinkedIn - https://www.linkedin.com/in/evan-thomson-327a78216/ Eric on LinkedIn - https://www.linkedin.com/in/eric-b-pacifici/ Kevin on LinkedIn - https://www.linkedin.com/in/khendersonco/ Sam on LinkedIn - https://www.linkedin.com/in/sam-rosati-68787a8/ Topics: (00:00:00) - Intro(00:01:23) - Show intro and milestones(00:03:00) - Why the sell side matters(00:08:50) - When to plan a sale(00:13:28) - Three buckets of diligence(00:17:48) - Assembling the deal team(00:18:30) - Broker and lawyer roles(00:22:00) - LOI terms beyond price(00:24:23) - Screening buyers for closing(00:25:05) - Earnouts and payment risk(00:25:49) - Seller market LOI leverage(00:27:53) - Survival period negotiations(00:29:38) - Rep warranty insurance(00:34:16) - Scaling for a future exit(00:42:48) - Industry tailwinds and AI(00:46:47) - Seller legal prep checklist(00:48:25) - Compliance updates and contracts(00:51:32) - Wrap up and farewell