Business owners are frequently contacted by individuals or advisory firms offering to help you sell. So, how can you tell the experts from the flakes?
Here are 5 tips for choosing an advisor to represent you in a sale.
- Choose someone you like and trust. You’ll work with someone for 9-15 months, and you’re relying on them for the largest transaction of your lifetime, not to mention their role in shaping your company’s future. They will advise you on significant decisions and create first impressions with buyers, so don’t underestimate the importance of character, experience, or likeability.
- Pick a great listener focused on understanding and achieving your goals. You want to maximize price and optimize tax treatment, but you also might care about the buyer’s operating philosophies or the future of your employees, customers, or suppliers. An advisor can only deliver on your objectives if they understand them, so they probably aren’t the right person if they don’t ask a lot of questions about your goals.
- Find someone who will work to understand your business. A good advisor can help buyers see what sets your company apart and makes it successful. They can also help buyers catch a vision for the future or see around challenges in your past. An advisor doesn’t necessarily need industry experience, but they do need to roll up their sleeves and dig into the details of your operation. That takes time with you, which is another reason you want to like them.
- Prioritize the process. A good transaction depends upon identifying a wide range of buyers, screening and qualifying them, confidentially telling them the story of your company, and engaging them in a process that gives you leverage and choices. A strong advisor can tell you what to expect at each step in the process and help you understand how your attorney, CPA, and wealth advisor will play key roles.
- Finally, don’t pay upfront fees. Beware of advisors that make you sign an engagement letter before giving you a market valuation or charge fees to create the offering memorandum. Credible advisors might charge modest retainers, but they primarily get paid when you get paid – when the transaction closes. That’s how you know they are confident in their ability to deliver on your objectives.
ASG Partners has been helping business owners sell their companies and realize their retirement goals for almost 40 years, so we’ve been through the advisor selection process a few times.
Contact us if you’d like to talk about your situation