Featuring Expertise from Cory Dean Farley, Attorney from Texas
Mergers and acquisitions (M&A) are often seen as high-stakes games played by corporate titans. But more than ever, small to medium-sized businesses (SMBs) are stepping into the M&A arena—not just as targets, but as strategic buyers and merger partners. While the scale may be smaller, the stakes can be just as high for an SMB owner whose livelihood depends on a single transaction.
According to Cory Dean Farley, an accomplished business attorney based in Texas, the key to success in any M&A deal is preparation, precision, and perspective. “If you’re a small business, one deal can make or break your company,” says Farley. “That’s why you need to treat M&A not as a roll of the dice, but as a disciplined process.”
Here’s how to do exactly that.
1. Know Your ‘Why’ Before Your ‘How’
Many SMBs pursue acquisitions reactively—because a competitor wants out, a supplier is struggling, or an opportunity suddenly appears. But Farley cautions that reaction isn’t strategy.
“You need a thesis for why this deal makes sense,” says Cory Dean Farley, Attorney from Texas. “Are you acquiring customers? Intellectual property? A foothold in a new region? Without a clear goal, you risk buying problems instead of value.”
Farley recommends writing down your M&A goals and using them to guide all deal decisions. This helps with target screening, valuation, and negotiation leverage.
2. Due Diligence Isn’t Optional—Even in ‘Friendly’ Deals
In small business circles, many deals are made between friends, longtime competitors, or even family members. This familiarity can lead to a false sense of security—and skipped due diligence. That’s a mistake.
“Whether you’re buying from your brother or a stranger, the numbers don’t lie—but they do hide,” warns Cory Dean Farley. “You need to pull back the curtain on financials, legal liabilities, operations, and compliance.”
A robust due diligence process includes:
- Reviewing tax returns, bank statements, and debt obligations
- Confirming ownership of assets and IP
- Examining customer concentration risks
- Checking for pending litigation, liens, or regulatory violations
Farley often advises clients to bring in a CPA and attorney at this stage, even if the deal seems simple. “It’s always cheaper to uncover problems before closing than to litigate them afterward.”
3. Consider the People Equation
One of the most overlooked—but vital—aspects of M&A for SMBs is people. Who stays, who leaves, who gets promoted, and who gets sidelined? Employee morale, productivity, and even customer relationships can hinge on how human transitions are handled.
“A small company is often a family in disguise,” says Cory Dean Farley, Attorney from Texas. “So if you don’t manage change with empathy and clarity, people will walk—and take value with them.”
Farley recommends:
- Honest communication with employees from both sides
- Transition plans for leadership and key personnel
- Incentives to retain high-performers
- Cultural integration, not just process integration
Don’t assume your new team will automatically “fall in line.” Culture needs to be earned and cultivated—especially during transitions.
4. Structure the Deal to Protect the Business—Not Just Close It
While many business owners focus on price, deal structure is where risk lives. Is the transaction an asset purchase or a stock deal? Are payments made in cash, stock, or installments? Are there earn-outs tied to future performance?
“Price is only one part of the deal,” says Cory Dean Farley. “The structure determines tax impact, liability exposure, and even whether the deal gets financed.”
For example:
- An asset purchase allows the buyer to avoid assuming most past liabilities.
- A stock purchase is simpler but riskier unless indemnifications are rock-solid.
- An earn-out can help bridge valuation gaps but creates risk if future performance falters.
Farley urges SMBs to review every clause with an attorney. “Even if you agree on the big picture, small contract details can create massive headaches if things don’t go as planned.”
5. Closing the Deal Is Just the Beginning
Many SMBs make the mistake of seeing closing day as the final goal. In reality, it’s just the beginning of a new and often bumpy journey.
“Post-merger integration is where the real work starts,” explains Cory Dean Farley, Attorney from Texas. “Without a game plan, you’ll lose time, money, and momentum.”
Integration should be planned in advance and should cover:
- Operational systems (e.g., accounting, inventory, CRM)
- Branding and customer communications
- Employee onboarding and new reporting lines
- Key performance indicators to track progress
Farley often helps clients draft transition plans alongside the purchase agreement. “You don’t want to wait until Day One to start thinking about Day Two.”
6. Use Advisors as an Investment, Not a Last Resort
SMBs often operate with lean budgets and may hesitate to bring in legal or financial advisors early in the process. But this frugality can backfire.
“Trying to ‘DIY’ a deal to save on legal fees is like fixing your own engine while driving,” Farley says. “By the time you realize something’s off, the damage is done.”
He recommends working with:
- A business attorney experienced in M&A
- A CPA to review financials and model scenarios
- A banker or financing expert if debt is involved
- An integration consultant for complex mergers
The earlier you engage professionals, the more value—and protection—they provide.
Final Thoughts: M&A as a Growth Lever, Not a Gamble
Mergers and acquisitions aren’t just corporate tools—they’re viable, strategic options for SMBs ready to scale or evolve. But success requires more than excitement and opportunity. It demands preparation, prudence, and the right team.
With guidance from trusted professionals like Cory Dean Farley, SMB owners can confidently navigate the M&A journey—avoiding costly mistakes, preserving relationships, and unlocking the true value of the deal.
Done right, M&A can transform a business. Done wrong, it can unravel it. The difference lies in the details—and in having someone like Cory Dean Farley, Attorney from Texas, in your corner.