It is pretty common for us to hear questions like the ones that follow. We recognize that each business, each owner’s circumstances and the opportunities presented are all unique. With that in mind, we can’t answer the questions posed without spending time evaluating the situation that a business and its owner occupies at this moment in time relative to the past they have already experienced and the future prospects they can reasonable expect.
I already have a buyer, what do I need you for?
Response: Is the buyer you have the best buyer for your business? Are you optimizing value, terms and post transaction risks? Should you forego marketing the business to a broad range of buyers to take the offer on the table? Are you prepared for the highly invasive due diligence process? Have you adequately prepared for the post due diligence renegotiation when the buyer identifies undisclosed risks? When it comes to the representations, warranties and indemnifications you will give the buyer in the transaction documents, do you know what to expect?
I have been negotiating deals my whole life, what value do you bring?
Response: How are you going to go about identifying, approaching and attracting the best buyer for your business? Have you ever sold a business before? Do you understand all of the ways that selling a business is different from any other transaction? Can you put yourself in the mind-set of a buyer? Do you understand their motivation and perceived value? Can you be objective about your business and emotionally detached from the process?
My attorney says he/she can handle this transaction, why should I hire you?
Response: It’s true an attorney can document a transaction. How many times per year do you actually speak to your attorney about the core dynamics of your business? Has your attorney ever run a business like yours? Does your attorney think about your business the way you think about your business? Do they know why your business makes money? Are they equipped to understand why the buyer is interested and fully leverage value from that interest? Is your attorney a deal maker or a problem solver? Are you prepared to pay your attorney’s hourly rate for a process that may not result in a closing?
My accountant tells me he/she understands multiples and can get me the price I want, why should I hire you?
Response: What services does your accountant provide annually: tax planning, tax preparation, reviewed or audited financial statements? These are the most common services. Did you hire your accountant primarily because their fee was lowest or to minimize your tax liability? How does a compliance or cost minimization mentality play into a dynamic where value optimization is the goal? Does understanding THAT a business makes money qualify someone to appreciate WHY a business makes money? If someone does not understand the why, how can they create value and leverage in a negotiation? Is getting the price you want reflective of the value you should receive?
I have a well established team of most trusted advisors, will you work with them?
Response: We are by nature collaborative. We recognize and value the contributions of the owners, management team and other trusted advisors in every business sale or acquisition. In particular, a CPA firm that is very familiar with a company including the tax consequences of a transaction and a skilled attorney that focuses on mergers and acquisitions are indispensable contributors to any successful transaction. We all have a role to play in an owner’s successful transition.
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