How to pick professional advisers for selling your business
Professional advisers are your fiercest allies when selling your business. Dan Matthews explains how to pick well
Your team of advisers will help you get the best price for your business, negotiate with the other side on your behalf and do all they can to make sure the deal eventually goes through – however thorny the process proves to be.
Your team, which could be composed of a bank manager, accountant, solicitor, corporate finance expert, PR consultant and even a friendly entrepreneur with experience of selling up, are your eyes and ears while the deal is progressing.
They must work with both sides of the deal and be prepared to wade through days of frustrating hold-ups in order to complete the deal. Knowledge, patience and competence are key virtues here; read on for the other factors to consider when picking your players.
Experience is a virtue
Probably the most important consideration of all is: have your advisers done this before? Your sale is unique, but there have been others like it, and your advisers should demonstrate experience of your sector, money value and the structure of your business.
“Sector insight and experience are key,” says Daniel Domberger, director of Livingstone Partners. “Different industries have different issues, and you need an adviser who’s dealt with them before and knows how to address them, rather than learning at your expense.”
Will they investigate?
Like a job interview, a business sale is a two-way street. Your buyer will rinse you with due diligence, so pick an advisory team who are prepared to return the favour. Not all deals break down because of problems with the vendor, so it’s important that your buyer comes with a stamp of approval.
GSOH a plus
Your team advisers need to keep on the right side of you, each other, and your buyer’s team too; therefore they must exhibit the kind of personality that people generally find agreeable. It’s a simple point, but in a process that requires plenty of communication, the last thing you want is a hot-head or a robot that induces sleep.
As Simon Clark, managing partner of venture capital firm Fidelity Growth Partners Europe, explains: “Beyond the points of looking for directly relevant experience, knowledge of the buyers and engagement, it’s worth thinking carefully about fit. Are you comfortable with your advisers and happy that they will represent you in a good light?”
Track record and commitment
“Get a thorough track record on the achievements of the team, and how these achievements are relevant to your business,” advises James Phipps, chief executive Excalibur Communications, who has sold businesses in the past.
Philip Letts, founder of creative services exchange Blur Group, who has sold four businesses previously, says advisers need to go a step further and prove their commitment to you: “Make sure they really understand your business and can present it back to you in an inspiring and meaningful way,” he says.
When can you start?
A technical point, but it helps if your team has the capacity and resources to start at the same time, meaning everyone is on the same page from Day One.
Advisers are often cagey about money when they pitch for business but are only too happy to set the clock whirring when you trouble them for a bit of activity. Therefore find out as best you can the amount of money you’ll be parting with after the entire course of the deal has completed.
“An advisory team will usually cost you a decent amount of money so the most important thing is to ensure that you are getting good value,” explains Jos White founder of anti-virus software business MessageLabs and private equity house Notion Capital.
“You need to know the amount of money you are spending throughout the process so you don’t receive a shock bill at the end of it. You have got to be sure that they will be worth this money and a good way of doing that is to agree a percentage that is linked to performance in some way.”