So, you bought a business. Congratulations! You’ve essentially just entered into the corporate equivalent of an arranged marriage—with a partner you barely know, a shared bank account, and a legal contract that makes divorce seem like a minor inconvenience. If that sounds dramatic, welcome to M&A.
This isn’t a guide for first-time buyers still marveling at EBITDA. This is for those who have been around the block and understand that buying a business isn’t just about numbers—it’s about surviving the post-close battlefield. Here’s how to ensure you don’t end up as just another cautionary tale in the annals of bad acquisitions.
The Honeymoon Phase: Buyer Beware
The moment the ink dries on the deal, you’ll feel a rush of euphoria. You just closed a business transaction. The seller was charming. The diligence process was tedious but manageable. You even convinced yourself that you got a good deal.
Then reality sets in.
- Due diligence is a lie you tell yourself. No matter how thorough you think you were, there’s always something you missed—an operational inefficiency, a “minor” compliance issue, or a financial black hole lurking in the balance sheet.
- The seller was never going to tell you everything. If they had to say, “Trust me, the customer relationships are rock solid,” congratulations—you just inherited a ticking time bomb.
- That “strong” team you inherited? Some of them are already looking for the exit, and the ones staying might be clinging to legacy processes like it’s the last life raft on the Titanic.
The bottom line? If you’re still patting yourself on the back three months in, check again—you might have been played.
You Just Moved in Together – And Their Ex is Still Around
You don’t just acquire a company—you inherit its baggage. Employees. Customers. Vendors. Systems. Sometimes even the seller, who may be contractually obligated to “help with the transition” but whose real priority is enjoying their payday while making sure you don’t wreck their former kingdom.
- The ghost of the previous owner looms large. Expect to hear, “That’s not how Bob did it” at least twice a day.
- The employees were “loyal” to the company. No, they were loyal to Bob. You’re an intruder until proven otherwise.
- Vendors will test you. That preferred pricing you saw on paper? That was based on the seller’s long-standing relationships. You’re just another account to renegotiate with.
- Customers don’t care about your vision. They want their product or service delivered exactly as before, and they will complain if you change so much as the invoice font.
The best move here? Don’t bulldoze everything overnight. Listen, adapt, and figure out who’s actually valuable. The seller may have left, but their fingerprints are all over the place.
Prenup? Too Late. But You Can Still Protect Yourself
You should have fought harder on those contract terms. But what’s done is done—now it’s time to mitigate the risks you knowingly (or unknowingly) walked into.
- Legal obligations don’t disappear just because you own the business now. If the seller had pending lawsuits, regulatory red flags, or “handshake deals” with customers, those are now your problems.
- Earnouts are a battlefield. If part of the deal structure includes an earnout, buckle up. Sellers suddenly forget how to help increase revenue once they’ve been paid 80% of their asking price.
- Working capital estimates are a best guess. If you based your cash flow planning on their historical numbers, let’s hope those weren’t overly “optimized” to make the sale price look better.
- Tax liabilities are your new nightmare. Sure, you got a tax lawyer to review the financials, but was that before or after the deal was structured to be “more tax-efficient”?
Now is the time to get a proper post-close forensic review. Identify the leaks before they turn into financial hemorrhages.
Surviving the In-Laws: Customers, Vendors, and Regulators
If you thought employees were tough, wait until you meet the rest of the extended family.
Customers
They don’t like change, and they really don’t like price increases. If you bought the business with plans to raise margins, prepare for pushback. The good news? Some customers should be fired. If they were only profitable under the seller’s unsustainable pricing, it’s time to have a breakup conversation.
Vendors
They see the ownership change as an opportunity to renegotiate, and unless you have ironclad agreements, you’re going to need leverage. Find alternative suppliers early, and don’t assume loyalty—business is business.
Regulators
If the company has compliance obligations (and most do), you should assume the seller didn’t tell you everything. Conduct a regulatory health check immediately before you get blindsided by an audit.
Your job now is to prove stability to all parties involved. Even if things behind the scenes are a mess, the external message should be “business as usual.”
Til Exit Do You Part – Planning Your Escape
Right now, your priority is integration and stabilization. But at some point, you’re going to think about your own exit. And unless your goal is to become the next reluctant seller, here’s what you need to do:
- Build the business into a saleable asset. Just because you bought a mess doesn’t mean you should sell one. Streamline processes, clean up financials, and eliminate founder dependence.
- Know when to pivot. If the original strategy isn’t working, adapt. Some acquisitions are about long-term value creation. Others are about cutting losses early.
- Exit strategy starts on Day 1. Every major decision should be made with the endgame in mind. Want to sell to a strategic buyer? Then your business needs to look like a perfect bolt-on, not a Frankenstein of mismatched systems.
