Fool For a Client?

Do you really need an attorney? Do you really need a CPA?  Are they worth the money and could you do without them.  Well, the answer is probably yes, you could do without them, but you’d be worse off for it.  So, let’s answer the question, do I need an M&A Advisor and why?

• Preparation: Often months of careful preparation and planning are required to present your business in the best way. A buyer needs to visualize and understand your business without you, the current owners involved.

To present a clear, concise and attractive package to buyers can be a time-consuming and painstaking process.  We go through the last three to five years of income statements, recasting and reshaping to pull out non-essential expenses, non-recurring expenses, discretionary expenditure, depreciation and amortization, owner compensation and benefits.

The next step is an even longer list for balance sheet adjustments.  After this, you need to present a clear and honest appraisal of your business, a description of business processes, business model, history, products and services, customers, industry reviews, geographic areas, strategy for growth, ownership and legal structure, facilities, people, competitors, competitive advantage, assets, capital expenditures and opportunity statements, not forgetting legal disclaimers, notices of confidentiality and an executive summary.

It sounds exhausting and it can be if you try to do it on your own, so it does make sense to hire a professional team of M&A experts, writers and editors to produce the best offering documents.  After all, you want to entice rather than repel as many buyers as possible.  You can avoid this process at the early stages and try and find a few buyers, but the result will exclude many of the best buyers, increase the time at the back end when a buyer requests all this information and risk that you appear unprofessional and unprepared.

• Negotiation: Even for the few business owners who are skilled in private company sales and acquisitions, experience and tactics in negotiations are critical to gaining the highest price. Negotiating experience and strength only comes from repeating this process hundreds of times and let’s be clear, your adversaries in these negotiations are invariably going to be well trained, well educated players with considerably more experience than you in buying and selling companies.
• So, what is the principal benefit of hiring Acquisition Advisors? The answer is representation. For many, important negotiations that take place in our society today – the courtroom, politics, or professional sports, the parties are represented by a professional. Put simply, representation will reward you with an improved deal and price at many, many times the cost of hiring us. Someone once said: “a lawyer who represents himself has a fool for a client.” Is the same true for a business owner when selling or buying a business?
• Representation eliminates much of the emotional roller-coaster, and ensures that the buyer maintains the highest opinion of you, the owner who has controlled this business for so many years. It also allows you to maintain friendly and cooperative communication with all potential buyers in the process. Acquisition Advisors will bear the brunt of negotiations and reward you with the highest price.
• The evidence of hundreds of business sale transactions suggests that a business seller will earn a considerably higher closing price when represented by an M&A professional. The alternative is going the course alone, or with attorneys or CPAs representing you who have minimal or no professional training and experience in M&A. The choice is up to you.