The next selling cycle may be near

[Editor’s Note: The M&A market for lower middle market and middle market companies (under $250M in revenue) has been relatively stagnant for the past two years. With professionals expecting two to three rate cuts this year, plus the enormous amount of capital on the sidelines (both private equity and strategic), late 2026 and 2027 look very promising for well-prepared companies looking to go to market.              -dpm]

The exit sales process may take longer than you think. With credit markets still tight and many buyers sitting on the sidelines, it may seem counter-intuitive to be writing about preparing your company to be ready to sell. However, there are record levels of capital, sitting as dry powder, and interest rates are coming down. Many professionals believe the next major sales cycle will begin during 2026 and extend through 2027.

While some business owners may believe they can pull the string when they are ready to sell, the truth is, for many business owners, the exit sales cycle may take several years to execute. In order to sell at highest value, the process includes time to get ready, 1 year for the transaction, and then you may have to spend 3 years or more with the company after the sale.

Much of the preparation can be accomplished in advance. Companies can focus on making fundamental improvements to their business that will help them be healthier and more prepared than their competitors.

1. Focus on customer net profitability

2. Upgrade management

3. Cleanup business processes

4. Develop a strategic growth and execution plan

 Focus on customer net profitability. The tendency for many business owners is to cling to any customers and revenue no matter the profitability level. A common comment is that “at least they absorb overhead.” The notion of unprofitable business absorbing overhead may be one of the greatest false beliefs in business. In many cases, overhead that has been viewed as fixed is really a cost that can be minimized or shed. Carrying unprofitable business will be a continuing cash drain that may inhibit your business’ ability to continue to grow. Additionally, removing unprofitable business adds to your EBITDA.

Upgrade management. While velocity is slow in the labor market today, there is a great supply of good talent stuck in their current companies. In many cases this may be talent that would not be available in better times. Take advantage of the opportunity to improve. Similarly, this is a great opportunity to review all of your employees and weed out those with below average performance, poor potential, or unrealized potential. Our clients use a simple tool to rank all employees in terms of potential and performance – the results make it very clear which ones have been a drag on the company.

Cleanup business processes. During boom times, some companies claim they are too busy to scrutinize business processes, to make improvements, and to streamline workflow in order to increase throughput. That “excuse” leads to suboptimal performance.

Develop a strategic growth and execution plan. You need a plan that will allow you to be agile enough to take advantage of opportunities and will be attractive to a prospective buyer.

Take a lesson from the Boy Scouts: Be prepared. These steps can add value to your business. Your business can accelerate faster and be well- positioned. Well-prepared businesses are always more attractive and sell first as the market heats up. Those businesses will find a hungry group of buyers and investors who have been sitting on their hands during 2023, 2024, and 2025.

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 The Mead Consulting Group helps dozens of companies and organizations -like yours - every year with both strategic planning & execution, strategic business coaching, and preparing to maximize value in an exit. Clients that utilize these processes consistently outperform their competition.

 If you would like to discuss your situation, please contact me to set up a complimentary meeting. Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com.

The Importance of Experience When Teaming with AI in Strategic Planning for Lower Middle Market Companies

[Editor's Note: Lower Middle market companies have unique characteristics that require critical thinking and experience to yield the best results when using AI in strategic planning. We hope you find this article useful - dpm] Artificial intelligence is rapidly reshaping how companies approach strategic planning. From market analysis to scenario modeling, AI tools promise faster insights, broader perspectives, and more data-driven decision-making. For lower middle market companies—often operating with lean teams, limited resources, and high execution risk, the appeal is clear. Yet AI is not a strategist. In the lower middle market, experience is essential when using AI in strategic planning, and that experience often comes not only from internal leadership but from an experienced strategic planning consultant who understands both the tools and the terrain. The strongest outcomes emerge when AI is paired with seasoned judgment—internally and externally.  AI Is a tool, not a decision-maker or a substitute for judgement. AI excels at processing large volumes of information, identifying trends, and generating strategic options. It can evaluate markets, analyze customers, model pricing, and stress-test assumptions far faster than traditional approaches. What AI cannot do well is understand organizational culture, leadership dynamics, or execution realities. It lacks awareness of past initiatives, informal decision-making structures, and the human factors that often determine whether a strategy succeeds or fails. Experienced leaders—and experienced consultants—know that strategy rarely fails because of poor analysis and often fails because of misalignment, timing, or execution. AI informs decisions; experience determines whether those decisions are realistic and actionable. Lower middle market companies have some unique characteristics. Many AI tools are trained on generalized datasets reflecting public companies or large enterprises. Lower middle market firms operate under very different conditions where customer concentration is higher, management teams are lean, systems and data are imperfect, and capital decisions can be existential. An experienced strategic planning consultant brings pattern recognition from dozens of similar companies and situations. They understand that what might work at scale often breaks at $20–$100 million in revenue. Their role is to translate AI-generated insight into strategies that fit the company’s true constraints—leadership bandwidth, cash flow sensitivity, and owner risk tolerance. Experience shapes better questions. AI’s usefulness depends heavily on the quality of the questions (prompts) it is asked. Knowing which questions matter—and which assumptions to challenge—is a function of experience. Seasoned consultants help leadership teams: ·    Frame the right strategic questions. ·    Identify blind spots in internal thinking. ·    Challenge data that looks precise but is directionally wrong. ·    Focus on decisions that will actually move the needle and add value. For example, AI may suggest aggressive geographic expansion based on market growth data. An experienced consultant may recognize that talent limitations, customer service risk, or operational complexity make that path dangerous. Experience reframes the discussion from “Where can we grow?” to “Where can we grow without breaking the business?”  Pattern recognition matters more than prediction. AI is effective at prediction based on historical data. Experienced consultants contribute something different: pattern recognition shaped by real outcomes across multiple companies and cycles. They have seen: ·    Strategies that looked compelling but failed in execution. ·    Growth initiatives that strained culture or cash flow ·    M&A plans that underestimated and inadequately planned for integration risk. This perspective allows consultants to act as a strategic filter—helping teams avoid attractive but unwise paths. In the lower middle market, avoiding the wrong move can be as valuable as selecting the right one. Speed requires judgment and facilitation. AI dramatically accelerates strategic planning by enabling teams to test more scenarios in less time. However, speed without judgment increases risk. An experienced consultant plays a critical facilitation role by: ·    Slowing decisions that require alignment. ·    Helping teams prioritize clarity over optimization. ·    Ensuring strategy translates into executable initiatives with clear accountability. They use AI to broaden thinking and pressure-test assumptions, while applying experience to determine what deserves action. This balance is essential in environments where recovery from a bad decision is costly. Strategy is also about Trust and Alignment. In many lower middle market companies, strategy is a trust exercise involving boards, lenders, family owners, and employees. Data alone does not create confidence. Experienced consultants bring credibility, objectivity, and the ability to translate AI-driven analysis into clear, human narratives. They help to align stakeholders, manage differing agendas, and ensure the strategy is understood and owned—not just approved. The future of strategic planning in the lower middle market is not AI-driven or consultant-driven—it is collaborative. The strongest results come when leadership teams, experienced consultants, and AI tools work together. Companies that succeed will not be those that adopt AI fastest, but those that integrate it thoughtfully with seasoned leadership and external perspective. We can help.  Mead Consulting Group has worked with scores of organizations and leaders to help them move to develop a highly- functioning management team that plans and acts strategically and accomplishes its goals. If you would like to learn more about how we can help your organization, please contact me at meaddp@meadconsultinggroup.com or (303)660-8135. For more information, see some of our success stories with organizations from $10M to $250M.  Best regards, Dave Mead