A Better M&A Market does not fix an Unready Business

Most owners hear "deal activity is improving" and translate that into "my business will be easier to sell when I'm ready." That's the wrong read. A stronger market means more buyers are active, but more buyers just means more choices for them. And buyers with more choice don't get less careful.

They get more selective.

That's the real story in Ansarada's 2026 Global M&A Predictions Report. Capital is looking for opportunities, and Australia and New Zealand are seen as relatively stable, secure places to deploy it — which should be encouraging news for any owner thinking about succession, transition, or eventual sale. But the report is equally clear that buyers are taking longer on due diligence, scrutinising quality harder, and using more complex deal structures — earn-outs, staged payments, minority stakes — whenever they're not fully confident about what happens to performance after the current owner steps back.

That last part is the whole game for owner-led businesses.

The owner's view versus the buyer's view

After 20 or 30 years building something, it's natural to see value in the history behind it - the loyal customers, the reputation, the equipment, the staff, the revenue, and the years of effort behind all of it. They are the hard parts that never show up properly in the accounts: the difficult jobs rescued, the staff issues handled, the supplier problems fixed, the customers retained, the years the business only kept moving because you personally carried the load.

But a buyer looks at the same business from a completely different angle. They may well respect what you've built, but they're not buying your past effort. They're buying future performance - specifically, whether that performance survives once you're no longer the person holding everything together.

That's where risk starts to appear. If you still control the key relationships, handle the difficult quotes and problems, make most of the important decisions, carry the operational knowledge, and know which jobs make money and which ones quietly lose it - the business may be genuinely successful, and yet still be fragile.

It works because you make it work. That may have been enough for years, but it becomes a problem the moment you want options and choices for your future.

From the inside, this level of involvement feels normal - it's just how things have always been done. From a buyer's point of view, though, that same reliance creates uncertainty, and uncertainty affects value.

Signs a business is more owner-dependent than it looks

Most owners underestimate how much of the business runs through them personally, mainly because it's built up gradually over years rather than arriving all at once.

A few practical markers worth an honest check:

• Quotes and pricing on anything non-routine still go through the owner before they're sent

• One or two key customer or supplier relationships exist because of the owner personally, not the business

• No one else could explain, unprompted, which jobs or clients are actually profitable

• The management team is really just the owner plus people who execute, not people who decide

• Systems and processes live in the owner's head, not in anything documented or repeatable

• The business has never run smoothly for more than a couple of weeks without the owner present

None of these are unusual for a business that's grown organically under one person's direction. But each one is also a specific, nameable risk that a buyer, a manager, or a family successor will eventually have to price in, plan around, or simply refuse to take on.

Why this matters whether you're selling or not

This is where the same test applies whether you're planning an outright sale, bringing in a manager, transitioning to family, or simply want the choice to step back or step out available down the track.

A buyer asking "does this depend on the owner?" is asking the identical question a manager needs answered before they can run the place, or an adult child needs answered before they can take it over with confidence.

Reducing owner-dependence isn't a sale-specific exercise - it's the one foundational piece of work that makes every one of those paths possible. Skip it, and every option narrows down to "keep doing exactly what you're doing."

Sometimes that uncertainty shows up as a lower price. Sometimes it affects the terms. Sometimes the buyer wants you to stay involved longer than you'd planned. Sometimes part of the payment gets pushed into an earn-out, where you only receive the full amount if the business performs after you've gone. Sometimes (many times) the buyer decides the risk is too high and simply walks. And sometimes - more often honestly - there's no external buyer in the picture at all, just an owner who's tired, a business that still needs them in the middle of every decision, and no real way to hand it off to anyone. And this is just not sustainable as every owner will have to exit the business one day.

What this looks like in practice

I worked with a trade business owner recently - a composite of a pattern I see often, not any one client - who'd built a genuinely strong operation over close to three decades. Good reputation, loyal team, healthy revenue.

But every non-standard quote still ran through him, the two biggest commercial accounts had been "his" relationships from the start, and nobody else in the business could tell you with any confidence which jobs were actually making money versus which ones were being quietly subsidised by the good ones.

None of that showed up in the numbers. It only showed up the moment he started thinking seriously about slowing down - and realised that everything he wanted to hand off, whether to a manager or eventually a buyer, still ran through him first. The business was successful. It just wasn't yet transferable.

Those aren't the same thing.

Exit readiness is an operating issue before it's a transaction issue

This is why exit readiness shouldn't start when an owner is already exhausted and ready to leave. By then there's often more work required than there's energy left to do it. The better time to start is while there's still room to improve the business, strengthen the team, clean up the numbers, and make the operation genuinely easier for someone else - anyone else - to run.

For most regional SME owners this doesn't mean selling tomorrow. It may not mean selling at all. You might want to bring in a manager, transition to family, reduce your hours, step back from daily operations, or simply know the business could be sold one day if the right opportunity appeared.

But every one of those paths relies on the same foundation: the business has to become less dependent on the owner.

That's why I treat exit readiness as an operating issue before it's a transaction issue. The problems that worry a buyer later are usually the exact same problems causing pressure inside the business right now.

Poor quoting discipline reduces profit today and creates doubt later. Weak systems frustrate staff today and worry buyers later. Unclear reporting makes decisions harder today and slows due diligence later. A thin management layer drags every problem back to the owner today and creates succession risk later.

In other words, the work that improves the business now is often the same work that improves its value later.

Cleaner numbers, better margins, clearer roles, stronger systems, less manual admin, better handover documentation, and a team that can genuinely carry more responsibility aren't just "exit planning" items. They're practical business improvements. They make the business easier to run now, and easier to transfer later, whether that's to a buyer, a manager, your own kids, or to keep as your retirement income asset.

Building readiness, in practice

This is the reason I structure the work in stages rather than as a single event. Broadly, it looks like:

• A clear-eyed audit of where the business currently depends on the owner, and a blueprint for what needs to change, and in what order

• Building a genuine second layer - a manager or "champion" who can carry real decisions, not just tasks, so the business stops routing everything back through one person

• Ongoing oversight to keep the gains in place, rather than watching the business drift back to old habits the moment attention moves elsewhere

None of this requires deciding today whether you'll sell, hand over to family, or simply want more freedom. It requires deciding that the business, as it currently runs, isn't yet giving you a genuine choice — and that's worth fixing regardless of which option you eventually take.

The standard doesn't drop in a stronger market

That is the part owners should pay attention to in a stronger M&A market. The opportunity may improve, but the standard does not drop. Buyers still want confidence. They want to understand how the business makes money, where the risks are, who runs what, how customers are managed, how work is delivered, and what happens when the founder is no longer in the middle of every decision.

A business does not become valuable simply because the owner is ready to move on. It becomes more valuable when someone else can understand it, trust it, run it, and see a future beyond the founder.

That is why the best time to improve exit readiness is "years" before an exit is needed. Not to force a sale, but to create choices. The choice to sell, step back, appoint a manager, transition to family, keep ownership, or simply stop being the person every problem depends on and build a business you love, and wraps around your life.

A better M&A market may create more opportunities. But prepared businesses will be in a much better position to use them.

Independence first. Options next.