How Market Conditions Shape Business Acquisitions

Welcome back to the Mid Market Insider!

Today, we’re taking a closer look at how current market conditions influence business acquisitions, and why timing alone isn’t enough to drive a good outcome.

We’ll talk about what owners can control regardless of the market, and how preparation creates options when opportunities arise.

One of the most common questions I get from business owners is some version of this:

Is now a good time to sell?

It’s a fair question. The M&A market isn’t static. It moves with interest rates, access to capital, and overall buyer appetite.

What buyers are willing to pay, and how they structure deals, can look very different depending on where we are in the cycle.

Right now, for example, higher borrowing costs have made heavily leveraged deals harder to justify. Some buyers are more cautious. Others are leaning in, but only for businesses with strong fundamentals.

That leads to an important distinction.

Timing Matters, But It’s Not the Whole Story

Yes, timing matters.

The same business can receive very different offers in different market environments.

When capital is cheap and confidence is high, buyers tend to stretch. When conditions tighten, buyers get selective. Risk tolerance drops. Diligence gets deeper.

But here’s the part many owners overlook.

Preparation Matters Even More

In tighter markets, preparation becomes the separator.

Buyers don’t stop buying, they just focus on the strongest businesses. Clean financials. Documented processes. Low dependency on the owner. Predictable cash flow.

Those businesses still attract interest, even when others struggle.

The ones that aren’t prepared? They feel the market much more acutely. Discounts show up. Deal timelines drag. Sometimes buyers walk altogether.

What You Can (and Can’t) Control

You can’t control interest rates.

You can’t control capital markets.

You can’t control buyer sentiment.

But you can control how your business shows up.

Strong financial reporting, clear processes, and reduced key-man risk make your business more attractive in any environment. Those things don’t just help at exit, they give you options.

The Real Goal

Selling a business isn’t about perfectly timing the market.

It’s about being ready when the opportunity presents itself.

Owners who focus on preparation put themselves in a position to act, whether the market is hot, cold, or somewhere in between.

And in my experience, that’s what leads to better outcomes, less stress, and far fewer regrets.

That’s all for today’s newsletter! Thanks for reading!

📅 Next Week:

In next week’s edition, I’ll break down why selling a business is much more than agreeing on a price… and how deal structure and terms often matter more than valuation alone.

We’ll talk about the layers owners overlook, and how understanding them early gives you leverage and prevents deals from unraveling later.

Keep building,
Nick