Most M&A discussions begin with a buyer, a teaser, a valuation, or a transaction mandate. But the most important work often happens much earlier.

Long before a potential acquirer is contacted, a business is already being evaluated by its own management team.

•   Is the business ready for scrutiny?
•   Is the growth story compelling?
•   Are the financials defensible?
•   Is the organisation scalable?
•   Who are the right buyers?
•   And perhaps most importantly, what can be done today to increase the strategic value of the business tomorrow?

This is the deal before the deal.

M&A readiness starts long before the sale

A successful transaction is rarely created when the process formally begins. It is usually the result of decisions made over the preceding 12–24 months.

Founders and shareholders often focus on revenue growth and profitability, but potential buyers look at a broader set of factors: quality of earnings, customer concentration, recurring revenue, management depth, scalability, governance, working capital, market position, and strategic relevance. The earlier these factors are understood, the greater the opportunity to strengthen the business before entering a competitive process.

“The strongest M&A outcomes are often built before the M&A process begins.”

1. Start with the “Why”

Before asking “Who will buy us?”, management should ask “Why should someone buy us?”

The answer could be access to a high-growth market, technology, customers, talent, intellectual property, geographic expansion, supply-chain capabilities, or operational synergies. Understanding the strategic rationale helps determine the right buyer universe and can influence how the business should be positioned. A business may be worth more to a strategic buyer that can unlock specific synergies than to a financial investor evaluating it purely on standalone financial performance.

2. Understand what drives value

Revenue and EBITDA are important, but they rarely tell the entire story. A potential buyer may look at:

•   Revenue growth and visibility
•   Recurring or contracted revenue
•   Customer retention and concentration
•   Gross and EBITDA margins
•   Market position and competitive differentiation
•   Scalability of the operating model
•   Management depth
•   Working-capital requirements
•   Technology and intellectual property
•   Regulatory or operational risks

Understanding these value drivers early allows management to focus on the areas that can genuinely influence valuation and buyer interest.

3. Fix the issues before the buyer finds them

Every business has issues. The problem is not having them; the problem is discovering them for the first time during due diligence.

Historical tax matters, related-party transactions, undocumented agreements, customer concentration, weak internal controls, inconsistent financial reporting, or dependence on key employees can all become negotiation points. A pre-transaction readiness review can identify these issues while there is still time to address them. This reduces surprises, improves confidence, and prevents avoidable value leakage during negotiations.

4. Build a financial story, not just financial statements

A buyer needs more than audited accounts. Management should be able to explain the story behind the numbers—what drove growth, why margins moved, which customers and products are most valuable, what investments are required, and what the future could look like.

A robust financial model can help management understand different scenarios and establish realistic expectations around valuation and future performance. The objective is to enter a transaction with clarity on the numbers and confidence in the story behind them.

5. Think about the buyer before you think about the process

Not every buyer values the same business in the same way. A strategic buyer may value synergies, market access, or technology. A private equity investor may focus on growth, cash generation, and scalability. Another buyer may see value in geographic expansion or customer relationships.

Building a buyer universe early helps management understand where strategic value may exist. It also creates a more thoughtful process rather than approaching the market with a one-size-fits-all proposition.

“The right buyer is not necessarily the one offering the highest price on day one. It is the one that sees the highest strategic value in what you have built.”

6. Create optionality

Preparation creates choices. A founder who is not prepared may feel compelled to accept the first credible offer. A well-prepared founder can decide whether to sell, raise growth capital, bring in a strategic partner, pursue a partial exit, or continue building independently.

This distinction matters. M&A preparation should not be about creating pressure to sell; it should be about creating the option to transact from a position of strength.

7. Build the business you would want to acquire

The best preparation is often operational rather than transactional. Strengthen management, improve reporting, professionalise governance, diversify customers, improve margins, document processes, invest in scalable technology, and develop a strong second line of leadership.

These actions do more than prepare the company for diligence. They make the company better, more resilient, and more valuable.

From readiness to competitive advantage

Once the business is prepared, the M&A process itself becomes more strategic. Management can approach potential buyers with a clear equity story, a defensible valuation framework, and a well-defined understanding of the company’s strategic value.

Information can be organised, diligence can move faster, questions can be anticipated, and negotiations can focus on value rather than unresolved issues. Most importantly, the founder enters the process prepared to make decisions rather than simply react to them.

“Preparation does not guarantee a better deal. But entering the market unprepared can make a good deal unnecessarily difficult.”

The deal is the outcome, preparation creates the value

M&A is often treated as an event: identify a buyer, negotiate a price, and close the transaction. In reality, it is a journey that begins well before the first buyer meeting.

The businesses that attract strong buyer interest are often those that have already built the characteristics investors and acquirers value: strong financial performance, scalable operations, capable leadership, credible governance, and a clear strategic proposition.

For founders considering an eventual sale, the question should therefore not simply be: “When should we sell?” It should be: “What should we build today so that we have better strategic options tomorrow?”

That is the real deal before the deal.

Author

Gaurav Jain is Head of M&A and Global Delivery at Alethea Advisors. He specializes in cross-border transactions, strategic advisory, valuation, fundraising, IPO readiness, and deal origination across Indian and international markets. He works closely with founders, private equity firms, family offices, and global advisory firms on M&A, capital raising, and growth strategy mandates.