WHY SHOULD I HIRE AN M&A ADVISOR?
Many business owners decide to do the work of a consultant on their own; one main reason for this may be financially motivated, since not hiring an advisor means not having to pay a fee. The decision to hire an M&A advisor could well be the most important decision a seller makes as they look to sell their business. The expertise an experienced M&A advisor brings often makes or breaks a deal
Selling a business is a full-time job.
The business owner already has a full-time job running the business. Selling a business is another full-time job which should be left to multiple people.
Running a business while simultaneously going through an M&A sales process is a difficult proposition, if not impossible. The day does not have enough hours to do both effectively. A business owner selling a company should focus on their area of expertise (running the business) and hire an M&A team to focus on getting the job of selling the business done.
An intermediary between the seller and the buyer
Business sales negotiations are inevitably full of frustrations, ups and downs, disagreements, and misunderstandings. An advisor can help insulate the business owner from those inevitable bumps in the road.
An advisor acts a buffer between the seller and the buyer and helps divert and solve problems, and will have the foresight and experience to anticipate problems to solve them proactively.
A company can be a lifetime’s work. The owner built the business, took a risk, and is often deeply, emotionally involved in the business. A buyer will ask questions, poke and prod, and criticise every aspect of the owner’s decisions and results. The owner needs someone objective and unemotional to handle the delicate process of selling the business.
Hiring a consultant means that the owner will be prepared, and a prepared owner has a much better chance of successfully closing an acceptable deal.
Documentation such as financials, contracts and so much more must be produced and arranged, and it should not be underestimated how much paperwork there will be. Whether it’s on the sell-side or the buy-side, a good financial advisor will know how to draft these documents, which are essential in attracting potential buyers or sellers. While some companies think they can do without a financial advisor, most are ill-equipped to prepare these essential documents.
So, where’s the value?
100% of Business owners that sold their businesses with the help of an M&A advisory firm or investment bank felt that the advisor added value to their transaction, and 69% labelled it “substantial.”
Source: The Value of Middle-Market Investment Bankers
An experienced M&A advisor is worth his/her weight in gold and will increase the odds of maximising the value of your business while giving you multiple choices for who will carry on your companies’ legacy.
Venture Corporate Finance is a middle-market M&A advisory firm for clients planning to sell their businesses, raise capital, restructure, or grow with acquisitions. We provide independent advice and bespoke transaction solutions to meet their specific objectives.
For more information on corporate finance and M&A services, contact Venture Corporate Finance.