Build a Winning Deal Program with Strategic Planning

In this solocast, I walk you through the exact process I use with clients who want to build successful deal programs. Most attorneys start with deal structure, but I believe there are five critical steps you need to take first if you want to create a repeatable, scalable program that actually delivers on your strategic objectives.

While I use M&A as the primary example because that is what most clients ask about, these principles apply to any type of deal. Whether you are building an acquisition program, launching a licensing strategy, creating joint venture partnerships, or pursuing any other deal-driven growth approach, this framework will help you avoid the common pitfalls I see when companies try to grow through deals without proper planning.

Beyond Deal Structure

Most clients come to me asking about deal structure. What should the terms be? Should we pay cash or offer equity? What about earnouts? These are important questions, but they are not where you should start.

I have done these whiteboarding sessions with countless clients over the past 35 years, and I can tell you with complete confidence that every single one has gotten significant value from the process. We have helped build platforms that have completed dozens of acquisitions. The companies that skip these steps end up with inconsistent deal structures, cap table problems, and integration nightmares.

The firms that do this right create efficient, repeatable processes that let them scale their M&A programs. They know exactly who they are targeting, what value they bring, and how each deal fits into their larger strategic vision.

Start with Your Why

The first question in every whiteboarding session is why. Not the corporate why, although that matters. I want to know your personal why as the founder or executive driving this strategy.

I have seen too many entrepreneurs pursue growth strategies because they think they should, or because some industry guru told them it was the path to success. They end up building companies they don't actually want to run, achieving goals that don't make them happy.

If your why is geographic expansion because your clients need services in other markets, that is legitimate. If your why is adding capabilities that will create a better integrated client experience, that works too. If your why is increasing enterprise value before an exit in five or ten years, I have no judgment about that. You just need to be clear on what drives you, because that clarity will shape every subsequent decision.

I use a technique called the five whys, which comes from the former CEO or chairman of Honda. You ask why five times, going deeper with each question. Why do you want to grow? To get bigger. Why do you want to get bigger? To serve clients better. Why will that serve clients better? Because they have needs we currently send elsewhere, and integration would improve their experience. Why does that matter to you? Because I genuinely care about my clients and believe this will make them happier while helping our company grow.

See how you get to the real motivation? That depth of understanding is what separates acquisition programs that succeed from those that become expensive distractions.

Define Your Target Profile

Once you know your why, you can determine who you should be targeting. This is where many firms waste tremendous time and energy. Doing deals is a distraction from running your business, especially if you don't have a dedicated corporate development team with finance people, legal resources, and integration specialists.

You need to be surgical about who you pursue. If you are clear on your why and your value proposition, you can create a much more focused target list. You won't waste months on companies that don't fit your strategic criteria.

Think about the wealth management space, which we work in extensively. There are huge numbers of buyers right now. The market is incredibly competitive. If you are trying to compete with private equity backed aggregators on their terms, you will lose every time. They can pay top dollar, close fast, and offer the second bite of the apple through rollover equity and multiple arbitrage.

If you don't have PE backing, you need a completely different value proposition. Maybe it is culture. Maybe it is the opportunity for advisors to expand their service offerings. Maybe it is taking administrative burden off retiring founders so they can focus on what they love. Maybe it is providing a path to equity for the next generation of leadership.

Your value proposition should be authentic to who you are and what you can actually deliver. Then you identify targets who care about those specific benefits.

Assemble Your Deal Team

Before you start actively pursuing acquisitions, you need to know who will be on your deal team, both internally and externally. This includes whoever sources deals for you, whether that is an internal corporate development person, an investment banker, a recruiter, or a consultant.

You need financial expertise, and it better be someone with deal experience. Accountants, CFOs, and controllers who have never worked on M&A transactions are very different from those who have. The same goes for legal. Your general corporate lawyer is not the person to build your M&A program.

Then you have all the integration functions. Technology integration. HR and culture integration. Client communication and retention strategies. You might not have every person in place on day one, but you need to know what roles are required and have a plan for filling them before you close your first deal.

Build Your Model Before Individual Deals

This is where most companies make a critical mistake. They do deals opportunistically without creating a consistent model first. Someone approaches them, they negotiate terms, they close. Then another opportunity comes along, they do it differently. After three or four deals, they have completely different structures with different equity classes, different earnout provisions, different everything.

This creates massive problems. If you have different classes of equity, your cap table becomes a mess. If sellers talk to each other and realize they got very different deals, you have credibility issues and potential legal exposure. Integration becomes nearly impossible because you don't have standardized processes.

The best acquirers find their model and make it repeatable. They have template legal documents. They have standardized financial analysis and underwriting processes. They have systems for due diligence and integration. Every deal follows the same fundamental structure with minor variations based on specific circumstances.

When you build your model, you are deciding the big conceptual components. Are you doing all cash deals or creating an equity class for rollover? How much will you pay upfront versus over time? Will you have retention requirements tied to revenue or client retention? What about earnouts for sellers who stay involved in growth?

In service businesses where client relationships matter, you almost always want some backend money contingent on retention. If you are buying a manufacturing business with hard assets, the calculus is different. If you are bringing in retiring advisors on consulting arrangements, earnouts probably don't make sense. If younger sellers are staying to grow the business, earnouts might align incentives perfectly.

These decisions flow directly from your why, your target profile, and your value proposition. That is why you cannot skip the earlier steps and jump straight to model building.

Drill Down to Deal Structure

Once you have your model, you can determine the actual deal structure for individual transactions. What specific equity class will you offer? If you are an S corp, you can only have one class of equity. Will you restructure as a C corp or an LLC to offer different equity terms? What exact percentage will you pay upfront versus backend? Over how many years?

If you know you are targeting retiring advisors who want to cash out, they probably want more money upfront and less backend risk. If you are targeting younger advisors who want to stay and grow, they might prefer less upfront and more backend upside.

All of these specific terms fit within your broader model. You are not reinventing the structure for each deal. You are applying your established approach with minor customizations based on the specific situation.

The Power of Template Documents

The ideal scenario is completing your whiteboarding session, building your model, and creating template legal documents before you start seriously pursuing targets. When someone expresses interest, you can immediately send a letter of intent. You can start due diligence with established processes. You can deliver definitive legal documents quickly.

This makes you look professional and serious. It shows potential sellers that you know what you are doing and have your act together. Speed matters in competitive markets.

I understand the practical reality. Template documents cost legal fees before you have a deal in place. Some clients are not willing to make that investment without more certainty. Others have already started conversations with potential sellers before they come to us for the whiteboarding session.

We recently had a client who did the whiteboarding session in the morning, then met with a potential seller that same afternoon. The seller was ready to move faster than expected. We are now building documents for that specific deal, which will also become the templates for future transactions. It is not ideal, but it works.

The key is understanding what the ideal process looks like and getting as close to it as circumstances allow.

The Personal Why Matters Most

I want to come back to something I touched on earlier because it is fundamental to everything else. When we talk about your why, company objectives matter. Strategic rationale matters. Financial considerations matter.

But your personal why as the founder or executive is equally important. Why are we entrepreneurs if we are not creating companies that let us build the lives we want?

I see too many business leaders grow based on external pressure or assumptions about what they should be doing. They read about how some company scaled through acquisition, so they think they need to do the same thing. They hear about the multiples PE backed platforms are achieving, so they assume that is the only path.

Then they build companies they don't actually want to run. They create obligations and structures that make them miserable. They achieve financial success but personal dissatisfaction.

Your personal motivations are relevant and legitimate. If you want to build a legacy company, own that. If you want to create enterprise value for an exit, be honest about it. If you genuinely care about providing better client experiences, let that drive your decisions.

When your personal why aligns with your company strategy, you create something sustainable. When there is misalignment, you are setting yourself up for problems down the road.

A Repeatable Process for Deal Success

Whether you work with us or another advisor or tackle this on your own, I strongly encourage you to go through this complete process. Do not skip steps. Do not jump straight to deal structure because it seems more concrete.

Start with why. Get clear on your personal and business motivations. Define your target profile based on who will value what you offer. Build your deal team with the right expertise. Create your model before you do individual deals. Then drill down to specific deal structures that fit within that model.

This process has created tremendous value for every client who has gone through it. We have helped build platforms completing dozens of acquisitions. We have helped founders create businesses they actually want to run while achieving their financial objectives.

The firms that do this right make M&A look easy because they have invested the time upfront to build proper foundations. The firms that skip these steps end up scrambling, making mistakes, and wondering why their acquisition program is not delivering the results they expected.

If you want to pursue deal driven growth, particularly through M&A, invest in getting this foundation right. The return on that investment will pay dividends for years to come.

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Listen to the full episode of DealQuest Podcast Solocast 81: Available on all major podcast platforms
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FOR MORE ON COREY KUPFER:
https://www.linkedin.com/in/coreykupfer/
http://coreykupfer.com/

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

Get deal-ready with the DealQuest Podcast with Corey Kupfer, where like-minded entrepreneurs and business leaders converge, share insights and challenges, and success stories. Equip yourself with the tools, resources, and support necessary to navigate the complex yet rewarding world of dealmaking. Dive into the world of deal-driven growth today!