Legal and Strategic Advice from Cory Dean Farley, Attorney from Texas
Mergers and acquisitions (M&A) are no longer reserved for multinational giants. In recent years, small and medium-sized businesses (SMBs) have become active players in the M&A space—acquiring competitors, merging with strategic partners, or being acquired by larger companies. The reasons vary: accessing new markets, acquiring intellectual property, or finding an exit strategy.
But unlike major corporations, SMBs often lack in-house legal and financial teams. This makes M&A decisions riskier and more personal. According to Cory Dean Farley, a veteran business attorney based in Texas, successful SMB M&A deals start long before negotiations and continue well after the ink is dry.
1. Begin with the End in Mind
Whether you’re buying, selling, or merging, know what you’re trying to achieve. Are you a family-owned business looking for a succession plan? Are you acquiring another firm to boost production capabilities? Or are you combining forces with a partner to enter new markets?
“The most successful SMB transactions are those where the owner has a long-term strategic goal,” says Cory Dean Farley, Attorney from Texas. “That vision should drive every part of the process, from target selection to deal structure.”
Farley advises creating a roadmap early:
- Define your 3- to 5-year business goals
- Identify how M&A supports those goals
- Understand what you’re willing to give up and what you must retain
Without strategic clarity, even the best-negotiated deal can lead to post-merger regret.
2. Prepare for the Courtship: Get Your House in Order
If you’re selling your business, prepare it as if you’re staging a home for sale. Clean financials, organized contracts, documented processes, and clear ownership of assets will make your company more attractive and reduce deal friction.
On the buy side, you should prepare due diligence checklists in advance, so you’re ready to evaluate potential targets quickly.
“Due diligence isn’t just about discovering problems,” Farley says. “It’s also about verifying what makes the company valuable in the first place.”
He recommends organizing:
- 3+ years of financials
- Legal entity and ownership documents
- Employee agreements and benefits information
- Client and vendor contracts
- IP, trademarks, and patents
Cory Dean Farley stresses that lack of transparency or sloppy documentation often leads to lower valuations or failed deals.
3. Structure the Deal with Taxes and Risk in Mind
There’s no universal way to structure an M&A deal. You can acquire:
- Assets (e.g., equipment, IP, inventory)
- Equity (shares or membership interests)
- The entire legal entity (via merger or stock sale)
Each structure has different implications. Asset purchases may shield buyers from liabilities, while equity deals may streamline operations if licenses and contracts must stay intact.
“Tax efficiency and liability protection are two sides of the same coin,” says Cory Dean Farley, Attorney from Texas. “Don’t choose a structure because it’s simpler. Choose one that aligns with your risk tolerance and future plans.”
Additionally, consider using earn-outs or performance-based payments to bridge valuation gaps or reduce upfront costs.
4. Don’t Skip the Letter of Intent (LOI)
The Letter of Intent is the M&A world’s equivalent of a marriage proposal. It’s not legally binding in most respects, but it sets the tone and structure of the entire deal.
Farley notes that many SMBs downplay the LOI stage, rushing into formal agreements without clear terms.
“This is your chance to align on price, payment terms, transition period, and key deal points,” Cory Dean Farley explains. “Treat the LOI like a mini-contract. If the fundamentals don’t work here, no amount of legal drafting will save the deal later.”
Key LOI items include:
- Purchase price and payment breakdown
- Timeline for due diligence
- Conditions to close
- Non-disclosure and exclusivity clauses
5. Address the Human Side of the Deal
Numbers and contracts may close a deal, but it’s people who execute it. Retaining employees, integrating cultures, and managing client relationships are among the most underestimated parts of M&A.
Cory Dean Farley cautions that internal communication is often an afterthought. “Your people need to hear the vision early and often. They need clarity on roles, benefits, and expectations. And clients need to be reassured that their service won’t suffer.”
He recommends:
- Announcing the merger to employees and clients with a unified message
- Offering stay bonuses or leadership roles to key employees
- Outlining changes to roles, systems, and reporting structures in advance
6. Understand Post-Close Obligations
Closing day isn’t the finish line. It’s just the starting gun. Many deals have post-closing requirements, such as:
- Payment of deferred compensation
- Customer onboarding responsibilities
- Non-compete enforcement
- Escrow releases or clawback provisions
“Too many SMBs let their guard down after closing,” says Cory Dean Farley. “But the real work of integration, performance tracking, and legal compliance is just beginning.”
Farley encourages clients to build a 6- to 12-month integration plan covering IT, operations, HR, and marketing. Assign owners for each category and review progress monthly.
7. Protect Yourself from Hidden Liabilities
Finally, Farley emphasizes the need for proper legal protections in all M&A agreements, especially for small businesses that may be buying or selling with limited resources.
“Representations and warranties are not just legal jargon,” Cory Dean Farley, Attorney from Texas explains. “They’re the promises that protect you if something goes wrong.”
Some of the most important protections include:
- Indemnification clauses
- Escrow or holdback funds
- Disclosures of known risks
- Caps on damages and time limits
Even if the buyer and seller trust each other, having these terms in writing avoids costly disputes and preserves relationships.
Final Thoughts: M&A Isn’t Just for the Big Guys
The rise of M&A in the SMB world offers tremendous potential—but only if approached with discipline, strategy, and expert support. Whether you’re acquiring a competitor, exiting your company, or combining forces with a partner, the decisions you make today will echo for years.
By leaning on experienced professionals like Cory Dean Farley, small business owners can navigate the M&A process with clarity and confidence.
M&A is not a shortcut to success—but when done right, it can be a rocket booster to a more secure, scalable, and sustainable business future.