For Chris Scorse, President and CEO of Circuit Check, who's been involved in many M&A deals, the more things change, the more they stay the same. Making sure a company's financials and records are in order might not sound novel, he said during the Minneapolis Smart Business Dealmakers Conference, but they've always been important, they're still important today, and will continue to be important.

Something else that's always important is the ability of the operators or the owner of the company to be able to explain how their business works, what its market is and how the industry works — the complexities of it — in a way that the buyer can understand.

"I think a lot of times as operators, we tend to very quickly delve into the details, the complexities. We want to tell everybody, 'Well, it seems like this, but it's actually like that. And if you don't take pay attention to this, that's a complexity that you may not have thought of.' And it's just the natural place where we go. But we really have to think that when somebody is coming from the outside to purchase the company — unless they're a strategic buyer, in which case they may understand the market very well — you generally have people that are looking at the company and they don't understand; they're trying to figure that out," Scorse says. "They may have an operating partner that can lead to some amount of insight into that. But we, as the operators or the owners, need to be able to very succinctly and specifically be able to communicate to our potential buyer, what it is that we do and why we do it, and do that in a way that doesn't overcomplicate things."

He says when a seller jumps too deep into the nuances of the business or the industry too soon in a deal, there are a couple of things that he's seen occur. For instance, a well-qualified buyer that would be a great fit could be scared off if the seller goes too quickly into the business's complexities.

"They're true and it's great that we know those, but that's not the time to bring it out," he says.

The second thing he says he's seen happen is a buyer hears too much of the story and they jump in thinking it's a great opportunity, but it's based on a misunderstanding that they have. Then they start to invest time and money into a long process, and they ultimately determine it's not what they thought it was, which can waste a lot of time and money of a lot of people.

"So, the way that I like to look at it is you need to be able, in a very clear way, to be able to say this is what we do, here's what we do it for or here's who we do it for, and here's why we're different, here's the way that we can differentiate," Scorse says. "And to be able to tell that story in a very clear way is powerful. One of the things that I've heard over many years is if you really want to show the command of the subject that you have, it's not by telling somebody all the details, it's if you can take a very complex subject, and you can explain it in very simple terms so that anybody can understand it. And I really think that's the approach that you want to take initially."

Brokers can help with this, he says, but they're likely not going to understand a seller's business to the degree necessary either. So, it's up to the seller and their team to figure out that story and how to communicate it clearly.

When buyers ask companies about how they performed during the pandemic, he says what sellers need to be prepared to answer is what happened, what did the seller see in their supply chain, how did that impact the business, and what has the seller done since then to make sure that if there's another situation that the company doesn't have the same challenges as before.

"That question is going to come. You know it's going to come. So, you just want to make sure that you're well prepared for it," he says.