How to get deal ready – insights from inside the boardroom

When businesses contemplate a sale, investment round, or strategic acquisition, preparation is everything. In an exclusive roundtable hosted by Freeths, leading North West business figures revealed the critical steps to becoming “deal ready” – and the pitfalls that can derail even the most promising transactions.

Laura Tracey, employment law specialist at Freeths, cuts straight to the chase: “The most common issue is senior management not having proper documentation.” She gives examples of two critical areas often overlooked: national minimum wage compliance and accurate holiday pay calculations. “Directors might think they’re well-compensated, but if their base salary doesn’t meet minimum wage requirements, it creates potential legal liabilities that can spook potential investors.”

Danielle Tierney, Amanda Ruddiman, Simon Edwards, Rosanna Brown and Lina Tejoprayitno

Her colleague Rosanna Brown adds a pragmatic perspective: “We always advise clients to get their house in order. Have you got your contracts filed? Can you quickly produce documentation? Because when due diligence starts, investors will forensically examine everything.”

From a banking perspective, Stewart Haworth of challenger bank OakNorth outlines three key pillars investors scrutinize: management experience, quality of financial reporting, and consistent cash flow. “We’re looking for what makes a business top quartile in its sector – whether that’s exceptional customer service, market share, or unique competitive advantages.”

Business leaders around the table shared their preparation strategies. Simon Edwards from Civic, an acquisitive engineering consultancy, highlighted the importance of protecting company culture during growth: “We’re fiercely protective of our culture. When we acquire businesses, we’re not just looking at financials, but whether potential partners can integrate effectively.”

David Clegg from AMS Group, a private owned and fast growing professional services group revealed their strategic approach to acquisitions, focusing on adding service lines that can be cross-sold to existing clients. “In our last six acquisitions, five were strategic additions designed to expand our service offering,” he explained.

Sean Keyes of Sutcliffes, also an ambitious engineer and construction consultancy, emphasised documentation’s universal importance: “Whether you’re planning to sell or not, get your paperwork right. Have clear director contracts, robust client relationships, and be prepared for potential changes.”

For entrepreneurs in fundraising mode, the challenges are equally complex. Michelle Laithwaite from Fuel Hub shared her experience: “Our first funding round was with friends, but we quickly learned to create detailed board minutes, management accounts, and maintain rigorous documentation.” It obviously worked, Andy Bell, founder of AJ Bell is an investor.

Lina Tejoprayitno of Pop Specs represented a younger business perspective, candidly admitting: “Our paperwork is everywhere. We’re learning that corporate structure matters.” 

She’s weighing up her options, but after appearing on TV’s Dragons Den Peter Jones, Touker Suleyman and Sara Davies each agreed to invest £25,000 for a 4% stake in Pop Specs, which will help Lina and her business partner Daniel continue with their ambitious growth plans.

When it comes to the deals process itself, experts offered nuanced insights. Catriona Lang from Dow Schofield Watts stressed the criticality of financial due diligence: “Investors want to know your EBITDA is sustainable and translatable to cash. Good financial information is fundamental.”

Charlotte Harrington from Cortus highlighted the importance of understanding transaction motivations: “Many businesses can’t articulate why they’re seeking investment. Start with the end in mind and work backwards.”

Amanda Ruddiman from KPMG recommended a comprehensive “exit readiness” approach: “It’s about more than numbers. Consider team dynamics, culture, and potential management transitions.”

Danielle Tierney from Hurst Corporate Finance advised businesses to showcase their unique strengths: “Prove you have key supplier contracts, strong distribution networks, and long-term revenue visibility.”

Jon Else from DJH provided perspective on market dynamics, noting how sector-specific multiples can dramatically shift investment attractiveness.

Dave Burke’s Northwest Mutual presented a unique investment proposition. Seeking to recreate traditional banking’s personal touch, the start-up is navigating a complex regulatory landscape, targeting £30 million in regulatory capital and positioning itself as a community-focused alternative to digital-only banks.

Closing the discussion, Laura Tracey emphasised the human element of transactions: “Selling a business is like giving up a child. Founders must have frank conversations about their future role and expectations.”

Rosanna Brown echoed this sentiment: “Every transaction is individual. Understanding your personal and business goals is crucial.”

Jordan Burnard from Freeths added a tax perspective, reminding participants that while tax considerations matter, they shouldn’t drive strategic decisions entirely.

The roundtable revealed a universal truth: being “deal ready” is a holistic process involving meticulous preparation, clear communication, and a deep understanding of one’s business ecosystem.

As businesses navigate increasingly complex investment landscapes, those who invest time in preparation, documentation, and strategic thinking will be best positioned to attract investment and achieve their growth ambitions.