What I Learned This Week: M&A Fees, Seller Red Flags & Shifting Deal Flow

This week’s The Business Inquirer dives into some of the less glamorous—but absolutely critical—aspects of small business acquisitions: how to value unpredictable earnings, what seller due diligence can save you from, and what M&A advisor fees actually look like in today’s market. Here are a few highlights that stood out: 📊 Axial’s Q1 2025 Deal Flow Snapshot Deal volume on Axial was down 8.6% YoY. Industrials was the only sector with growth, while Transportation fell nearly 30%. Healthcare deals had the highest buyer interest, while Food, Hospitality, and Consumer Goods had high volume but low engagement—buyers seem focused on quality over quantity. 🧑‍👩‍👧 A Generational Shift in Succession Planning The WSJ reports a rise in young adults joining family businesses. With more aging owners opting to keep it in the family, this could slow deal flow and reduce opportunities for external buyers. 💰 The M&A Fee Guide You’ll Wish You Had Earlier Based on anonymized engagement letters, the 2024–2025 guide outlines market-standard success fees (4–6% for sub-$10M deals), common retainer setups, and engagement terms. If you’ve ever wondered what’s “normal,” this is it. 🕵️‍♂️ Background Checks: The Diligence Step Everyone Skips (Until It’s Too Late) One buyer uncovered tax fraud, bankruptcy, and undisclosed LLCs—all thanks to a seller background check. It’s not sexy, but it’s often the highest-ROI diligence step. Catch the full newsletter here for more insights: https://thebusinessinquirer.substack.com/p/what-i-learned-last-week###-###-#### Questions for the community: 🧐 Have you ever uncovered major red flags during seller due diligence? What tipped you off? 📉 What sectors are you bullish or bearish on based on current buyer interest and deal flow trends?