Frequently Asked Questions

• When should I start thinking about selling my business?
  Earlier than most owners do. The work that drives the strongest sale outcomes — cleaning up the financials, reducing customer concentration, building a layer of management beneath the owner, documenting the systems that currently live in your head — typically takes 12 to 24 months. An owner who decides to sell on a Tuesday and lists on Thursday almost always leaves real money on the table. If you are within 6 to 36 months of a potential sale, this is the right time to begin a conversation.

• How do I know if I’m actually ready to sell?
  Three readiness questions matter: are you personally ready (do you know what comes next in your life), is the business ready (could it run for two weeks without you), and is the market ready (are buyers active and capital available in your industry). The financial side is often the easiest to evaluate. The personal side is the one owners most frequently underestimate. We can help you work through all three honestly before any process begins.

• What if I’m not sure I want to sell yet?
  That’s a perfectly reasonable place to start. Not every conversation we have leads to a transaction this year, or even this decade. Some of our most valuable work is helping owners understand what their business is worth today, what it could be worth with focused improvements, and what a realistic timeline looks like — so they can make an informed decision on their own schedule. There is no obligation in an initial conversation.

The Process

• How long does the sale process take?
  A well-run sell-side process for a North Dakota business typically takes six to twelve months from engagement to closing. That breaks down roughly as: four to eight weeks of preparation, four to eight weeks of confidential outreach, four to eight weeks of management meetings and indications of interest, three to six weeks of letter-of-intent negotiation, and sixty to ninety days of due diligence and closing. Deals can move faster, but rushing usually costs money. For more on each phase, see our seller’s guide.

• Will my employees find out before I’m ready to tell them?
  Confidentiality is one of the most important elements of a properly run process, and it is the single biggest reason to work with an experienced advisor rather than market a business yourself. Buyers sign non-disclosure agreements before they receive any identifying information. Marketing materials are released in stages — a “blind teaser” first, then full materials only after an NDA is signed. Management meetings happen offsite. We coordinate the timing of internal announcements with you so that employees, customers, and competitors learn about a transaction when you intend them to, not before.

• Will my customers and suppliers be notified during the sale?
  No, not during the active sale process. Customer and supplier notifications typically happen after a definitive agreement is signed and, in most cases, after closing — coordinated jointly with the buyer. There are limited exceptions: if a major customer contract requires consent for a change of control, that consent has to be secured during diligence, but it is handled discreetly and with your direct involvement.

• What happens if I change my mind during the process?
  Until a definitive purchase agreement is signed, you can step away. Letters of intent are non-binding on the substantive terms (though they typically include binding exclusivity for a defined period). Walking away has costs — your time, your advisors’ fees, the buyer’s goodwill — but it remains your decision. The point of the process is to get you to a transaction that genuinely makes sense for you and your family. If we get partway through and the answer is “not now,” that is a legitimate outcome.

Valuation, Structure, and Fees

• How much is my business worth?
  Value in the lower middle market is typically expressed as a multiple of trailing twelve-month adjusted EBITDA — your earnings, normalized for owner-specific items a new owner would not incur. Multiples for transactions in our region generally range from roughly 3x to 6x, with specialized industries commanding higher. Two factors matter more than the multiple itself: the EBITDA number it is applied to (which is why financial cleanup before listing pays for itself), and the deal structure (because the same headline price can mean very different net proceeds). We provide a defensible valuation range as part of every initial assessment.

• What is EBITDA and why does it matter?
  EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a proxy for the operating cash flow of a business, independent of how that business is financed or taxed. Buyers care about it because it approximates what they could expect to earn from owning the business going forward. “Adjusted EBITDA” goes a step further by removing one-time items and owner-specific expenses — the personal vehicle on the company books, above-market family member compensation, discretionary travel — to show the true ongoing earnings power of the business.

• How are M&A advisors paid?
  Standard practice in the lower middle market is a combination of a modest monthly retainer (which is typically credited against the success fee) and a success fee paid at closing as a percentage of transaction value. Success fee structures vary; the most common is a tiered scale where the percentage steps up as the deal price exceeds defined thresholds — aligning the advisor’s incentives with maximizing your outcome. We discuss our specific fee structure transparently in our initial conversation so there are no surprises.

• Will I owe a fee if the business doesn’t sell?
  The retainer is paid for work performed regardless of outcome — preparing materials, building the buyer list, running outreach. The success fee, which is the larger component, is contingent on closing. If a deal does not close, you are not obligated for the success fee. We are aligned with you to get to a successful outcome.

• How much will I actually net after the sale?
  After the headline price, three categories of deductions apply: transaction costs (advisor fees, legal fees, accounting and quality of earnings work), debt payoff if the business carries any, and taxes (which depend heavily on deal structure and the entity type of your business). We work with your CPA/tax advisor so you know what you are working toward, not just what the offer letter says.

Buyers and Post-Sale

• Who actually buys businesses like mine?
  Four buyer types are active in the North Dakota lower middle market: strategic acquirers (companies in your industry seeking to expand), financial buyers (private equity firms and family offices investing for return), search funds and individual operators (often MBA graduates looking to acquire and run a single business), and management buyout groups (your existing leadership team, typically backed by a financial partner). A properly run process reaches all four buyer types, because competitive tension between different motivations is what drives valuation up.

• Will I have to stay on after the sale?
  Almost always, but the role and the duration vary widely. The simplest version is a 30-to-90-day transition period where you introduce the new owner to customers and key employees and then step away. More involved arrangements include a 12-to-24-month consulting agreement, a continued executive role with the business, or — in some structures — an earnout where part of your purchase price depends on the business hitting performance targets after you sell. Your post-sale role is negotiable, and what works best depends on your goals and the buyer’s needs.

• What is an earnout, and will I have to take one?
  An earnout is contingent purchase price — a portion of the deal value that depends on the business hitting agreed financial targets after closing, paid out over one to three years. Earnouts are sometimes proposed by buyers to bridge a gap on valuation or to offset specific risks (customer concentration, key-person dependency, recent revenue volatility). They can be reasonable in the right circumstances, but the details — what the targets are, how they are measured, who controls the business during the earnout period — are where significant value can be lost. Whether to accept one and how to structure it are important negotiation points. Many deals close without earnouts.

• What happens to my employees after the sale?
  In the vast majority of lower middle market transactions, employees keep their jobs. Buyers are acquiring the business in part for the people who run it, and the operational disruption of letting them go would damage the asset they just purchased. That said, change is real: leadership reporting lines may shift, benefits packages may change, and culture evolves under new ownership. Many of our sellers care deeply about what happens to the team they built, and that priority can be reflected in how we evaluate buyers — not all offers are equal on this dimension, even at the same price.

Working with Iris Co.

• Why work with a local advisor instead of a national firm?
  National M&A firms rarely take on sub-$25 million transactions; the fee economics do not work for them. Local business brokers will take the engagement, but most do not run an institutional process — they list, wait, and negotiate with whoever calls. Iris Co. was built specifically for the gap between those two: full-process sell-side advisory, with the rigor of an institutional process, focused on the lower middle market in North Dakota and the surrounding region. The result is access to a broader buyer universe than a local broker can reach, with a process designed around the realities of closely held businesses in this state.

• How do you work with my CPA, attorney, and other advisors?
  We work alongside them, not around them. Your CPA stays involved on tax matters, financial reporting, and quality of earnings work. Your attorney stays involved on legal documents and negotiation. Your wealth advisor stays involved on what to do with the proceeds. Our role is to orchestrate the process, run the buyer outreach, manage the communication and diligence work, negotiate the deal terms, and keep your advisor team coordinated and focused on the right questions at the right time. Our business is built on referrals from the local professional community, and we work hard to make every engagement easier — not harder — for the advisors already on your team.

• Do you handle commercial real estate as part of the transaction?
  Yes. Many North Dakota transactions involve real estate — owner-occupied facilities, investment properties tied to the business, or real estate that needs to be separated from the operating company before a sale. Jacob holds a North Dakota real estate license and conducts brokerage activities though our Real Estate Broker - Scott Ritter with Stillwater Commercial Real Estate. That means the real estate side of a transaction is handled by a fully licensed team that understands how it connects to the larger deal, rather than as a separate engagement with a separate broker who sees only part of the picture.

• What does an initial conversation cost?
  Nothing. Initial conversations are confidential, complimentary, and carry no obligation. The right time to begin one is whenever you have a question worth asking — not when you have already decided to sell. Schedule a conversation here.