Are you really interested in selling your business?
If yes, why don’t you hire a consultant? This option can truly make your day. You would have enough time to look into your business operations, do meetings, and carry out a series of things without any worries.
These consultants are actually intermediaries. Simply put, they connect you to prospective buyers or sellers. Not only this, but also can you have end-to-end support in legal implications, taxation, accounting, and negotiation. These are just a few benefits. A serious buyer or seller can leverage his expertise to draw more advantages. Timely deal, beating complications, facing off legal matters, compliance, valuation, etc. are actually an uphill battle. The experienced advisor can sail you across these all challenges like a walkover.
If you’re concerned about his fee, it’s certainly affordable. Such professionals charge a small retainer fee, and this should be paid up front. But, the success fee is a certain percent of the overall deal. Indeed, spending on him is a well-done step.
Easy Tips to Consider Prior to Hiring a Consultant
The sweet spot for a consultant is that both, buy-side and sell-side parties need his/her expertise. Without his advisory, an M&A deal won’t occur smoothly. Typically, he/she guides in end-to-end transaction advisory, which is concerned with preparing a business for selling to drafting a share purchase agreement. Precisely, take into account these factors if you really want to invest in a deal successfully.
- Discover Deal Value
Deal value is the price range at which the merger or acquisition is expected to happen. However, it is good to skip the idea of hiring a consultant unless it’s likely to be the deal worth a 10 million or more. Consider the total fee of a consultant as aforementioned. It involves a retainer fee plus success fee, which might be too much with respect to the total business investment. Ask yourself if you’re ready to pay it or not. In many cases, paying commission together with a retainer fee would be hefty. So, think about it beforehand.
For valuation, you may consult a certified accountant. It would help you to reach to a better decision.
But, there is another case wherein an owner does not have professional knowledge to find investors and evaluate the actual value. In that case, investing in the best online business acquisition tool can save you. You may list your business there, share preference, and it’s done. The opportunities will start coming your way.
- Experience Matters
Prior experience in business investment (selling or buying) is vital. It shows you upsides and downsides that emerge during the deal. However, you may not require any professional support in selling or buying. But, a prior and recent experience in doing so is a must. If it has been a long time when you did it, hire a professional to consult with. The industry standards have been changed a lot. With every budget, compliance provisions change. Possibly, you may not be aware of all of them. Here, a professional guide should stand on your side.
- Find the Availability of Consultants
The most difficult stage appears when you need and are ready to hire a professional consultant, but he is not available. Here, the concern is having the one with hands-on experience who has a proven track record together with industry exposure. This combination is indeed hard to find. But, there is a way out. You may ask business owners, bankers, and legal advisors in your contact list to refer someone. He or she should be trustworthy. This is where referral works.
So, try to create a network beforehand. Then only, the rest of the journey for finding the best consultant would be easier.
- Find How Capable Consultants Are
Now that you have found the best fit consultant, introspect how prepared you are for investing in a deal. There are different consultants who may be with you from start to end. And a few experts have expertise in only a few areas or stages from finding the best deal, business preparation, legal paperwork, match making, targeting, negotiation, and deal structuring to legal documentation, etc. Take this fact into account. There is another aspect, which is related to the willingness of the business owner, stakeholders, and availability of internal staff. Think about it also.
These factors will help you finalise the best advisor who understands your requirement, and also live up to your expectations.
Summary
Hiring a business investment consultant is not easy. It involves various challenges. Discovering various factors can make this finding easier. Understand the capabilities of consultants, consider his experience, find his availability, and also the deal value. Focus on considering these factors seriously. Most transactions get benefited if an experienced intermediary (consultant) is there to look into various aspects of deal and negotiated.
