The What-Ifs

When preparing to sell your company, valuation is directly tied to perceived risk. The price and deal structure offered by a potential acquirer reflect how much risk they believe is inherent in your business.

Every serious buyer wants to acquire businesses with:

• Clean, transparent financials

• Strong, diversified customer relationships

• A capable and experienced management team

• Resilient supply chains

• Clear competitive advantages and defensible market positions

Reducing Perceived Risk to Increase Value

There are countless resources on preparing a business for sale, but one specific exercise can significantly reduce perceived risk—and therefore enhance your company’s valuation. At CRI M&A Advisors, we call it the “What If” Exercise.

Numerous books and articles have been written on preparing a company for sale, many of them brimming full of good advice.  We won’t try to cover all that ground in this short article.

But I will call your attention to one exercise that can have an extremely meaningful impact on a prospective acquirer’s perception of risk, and therefore a profound impact on the value of your company.

The “What If” Exercise: A Strategic Advantage in M&A

This exercise involves anticipating the due diligence questions an acquirer will ask and preparing clear, honest answers in advance.

Due diligence provides acquirers with raw data—but their real concern is identifying risks that aren’t obvious in spreadsheets. When they “poke holes” in your operations, their goal is to uncover hidden vulnerabilities.

By answering “what if” scenarios now, you proactively eliminate unknowns—and fewer unknowns mean less perceived risk, which can improve deal value.

Key Areas to Address in “What If” Planning

Customers

• What if your largest customer leaves or is acquired?

• What if a top client demands a price reduction?

• What if a customer sues or delays payment?

Employees

• What if a senior executive or key financial staff member leaves?

• What if your workforce needs to scale rapidly?

• What if a unionization effort begins?

Economy

• What if there's a recession?

• What if tariffs or interest rates change suddenly?

Operations and Supply Chain

• What if material costs spike?

• What if your core equipment fails?

• What if supply chain disruptions occur, like during COVID-19?

Beyond Risk: Conveying Strategic Readiness

Successfully navigating the “what if” exercise signals thoughtful leadership and preparedness. It demonstrates that your business is:

• Professionally managed

• Strategically positioned

• Ready to weather challenges

This perception can significantly reduce buyer skepticism—and that helps increase enterprise value, reduce deal friction, and expedite closing timelines.

Ready to reduce buyer uncertainty and increase your company’s value? Contact CRI M&A Advisors to start preparing for a confident, risk-aware sale.