With the holiday season upon us, it’s easy to feel like work is done for the year. However, for business owners selling their companies or interested buyers in the M&A market, it’s anything but. The end of the year brings unique challenges, but it also creates noteworthy opportunities only available to those bold enough to close during the holiday season. Take advantage of the unmatched potential found in the last six weeks of the year, and join the 30% of annual mergers and acquisitions transactions that are initiated and finalized in that time.
As advantageous as the holiday season can be, it isn’t without its unique struggles. The last six weeks of the year are filled with occasions that bring family together and take people away from the office. While everyone deserves a nice vacation, your interested buyer taking time off could delay your transaction timeline. Along with people taking time off, many individuals keep working, but with a lackluster sense of urgency. If the business owner of the company you’re interested in purchasing is dragging their feet, you could be left waiting longer than anticipated.
Additionally, financial reports could be impacted during the holiday season. Industries, such as retail and technology, often see performance peaks during this time. On the other hand, non-retail businesses such as lawyers and engineers often see a decrease in sales. Seasonal businesses that shut down for the winter may make a company’s profits appear much smaller than they are. Above all, it’s important to have a team of experienced M&A professionals on your side to help you see the bigger picture.
While the holiday season can make it difficult to engage with key people in the M&A process, it also provides unique networking opportunities. Professional events give you the chance to mingle with potential partners or investors. Even informal gatherings can strengthen these relationships– something that could help you close a future deal.
The holiday season can give you better insight into employee culture. This is a time when core teams become apparent, and overall employee engagement becomes clear. These are key indicators not just for potential synergies in the M&A process, but for long-term stability of the company. Additionally, buyers who purchase before the end of the year can benefit from tax strategies, such as depreciation deductions. Finalizing before January 1st can be an easy way to simplify accounting for the first year.
There are numerous things to consider during the holiday season. During such a hectic time, it’s important to have experienced mergers and acquisitions advisors on your side. Contact Stony Hill Advisors today to talk about starting your M&A journey before the year ends.