Top Mistakes By Business Owners

Mergers & Acquisitions (M&A) can be transformative, but business owners often make critical mistakes that reduce deal value or lead to failed transactions.

Here are five of the biggest mistakes owners make in M&A:

1. Overestimating Business Value

Many owners have unrealistic valuation expectations, assuming their business is worth more than market reality. Buyers use EBITDA multiples, market comps, and financial diligence, so inflated expectations can kill deals early.

Solution: Get a professional valuation from an M&A advisor (like 20/20 Capital Advisory Group) to set realistic pricing.

2. Poor Preparation & Financial Records

Inconsistent financials, messy books, or weak forecasting scare off buyers and delay deals. Not having clear contracts, IP rights, or customer agreements creates deal risks.

Solution: Prepare clean financials (3+ years of audited statements) and conduct a sell-side QofE (Quality of Earnings) review before going to market. Strong M&A advisors like 20/20 Capital will work with you to put together complete, accurate records and projections to mitigate this issue.

3. Neglecting Deal Structure & Terms

Owners focus only on price instead of the full deal structure (e.g., earnouts, rollover equity, seller financing, or tax implications).

Solution: Work with M&A attorneys & investment bankers to structure the deal for maximum cash-at-close, tax efficiency, and risk mitigation. The 20/20 Capital team designs a competitive and confidential auction process to maximize value through deal terms.

4. Failing to Vet the Right Buyer

Selling to a buyer who lacks financing or cultural alignment can lead to post-close disasters. Owners often chase the highest bid instead of the most reliable, strategic buyer.

Solution: Run a competitive M&A process (like our customized deal process) and prioritize buyers with strong funding, aligned vision, and operational expertise.

5. Losing Focus on the Business During the Process

M&A deals take 6–12+ months, and many owners neglect daily operations, leading to declining performance before close. A drop in revenue, margins, or key customer relationships can reduce valuation or kill the deal entirely.

Solution: The 20/20 Capital team quarterbacks the deal process so that you can continue to focus on and run your business. You can also assign a trusted executive or CFO to manage M&A while continuing to grow the business.