Choosing an Advisor

As a business owner, selling your business is the single most important financial event in your life. How do you identify and select the right M&A firm to represent your company? A successful selection will result in a transaction that meets your personal, financial and business goals. A poor selection can result in a deal that never closes.

Key Questions to Ask

1. What is the advisor’s experience in your industry? Experience in your industry means the advisor has contacts with strategic buyers and insight into who is currently making acquisitions. He understands your industry dynamics and how to best market your company to potential acquirers.

2. Does the advisor have a good handle on current market conditions? Is he able to provide guidance and rationale behind his valuation expectations? A qualified advisor knows the price of any business is prescribed by the company’s long-term strategic value to a buyer. There are no price guarantees but an advisor should be able to provide reasonable expectations of your company’s value.

3. How large are the transactions completed by the advisor? You want an advisor who primarily focuses on companies in your size range. If he typically represents companies ten times your size, you will not be important to him.

4. Who will handle your transaction? Are you being served by a senior professional with many years of experience or an associate just a few years out of school?

5. Is the Advisor willing to provide referrals? When you speak with a referral, validate how hard the Advisor worked; how he negotiated on behalf of the business owner; and how committed he was to closing the transaction in a timely way.

6. Can the advisor articulate a process for researching, identifying and qualifying potential buyers? Can he demonstrate how the process incorporates your requirements for a successful transaction?