Choosing the Right Advisors when Buying or Selling a Business
Choosing the Right Advisors when Buying or Selling a Business
Transaction professionals (Attorneys, Accountants and Business Brokers) ALL have their role in the business transfer process. If an attorney says you don’t need a business broker or a business broker says you don’t need an accountant or an accountant says you don’t need an attorney (you get the idea) the one making that statement is the one you need to deep six from your diligence team. Anyone that can effectively and appropriately serve in all three capacities is either brilliant or more likely self delusional.
Even among qualified professional advisors there are plenty of them who are deal-breakers (even some business brokers!), but that generally happens when a buyer hires the wrong consultant. Experienced advisors understand that they are engaged to provide counsel – not to make decisions for you.
I was retained by two business partners to represent their company for sale. They had a bartered trade with a highly respected law firm with significant business law experience. The partner with which they generally worked assigned a jr. attorney. Fourteen hours before the scheduled closing the jr. attorney notified my client that they simply could not close without changing a clause that had been in the purchase agreement since the first draft was delivered over three weeks prior. He told them that he was "only looking out for their best interests". The buyer was done negotiating. So the deal fell apart. (I did sell the business to the same buyer several weeks later at a significantly lower price).
Mistake number one - they hired the wrong attorney.
Now, you may be saying, an attorney is an attorney, an accountant is an accountant and a business broker is a business broker - right? Wrong! If you have a toothache, would you go to a foot doctor? Of course not! So if you're buying or selling a business you need transaction professionals who specialize in business transactions. Ideally, you'll want one with experience in transactions of businesses similar in size and type to the one you're buying.
Each professional plays an attorney plays a very important role, but you need to know what that role is. The business broker handles communications with the buyer(s), negotiation and coordinates communication amongst the seller’s advisors. The accountant reviews financial data and provide diligence assistance. The broker shouldn’t try to paper the deal (that’s the attorney’s role), the broker shouldn’t try to provide financial diligence and the accountant shouldn’t be negotiating.
Good deals get done between the buyer and the seller and then the accountants verify the information that was relied upon and the attorneys make sure it’s papered properly. As such, you have to be very clear with them about what you and the seller have generally agreed to and based upon what specific data.
You want the Attorney, accountant and business broker to bring all the potential issues to your attention. You need them to offer sage advice about any possible issues and opportunities you may have. You want them to review any documents that you sign with an eye towards their core competency.
You definitely need to consider every issue that your advisors raise but when all is said and done, it’s your judgment and your decision.
There is always (let me reiterate ALWAYS) going to be some element of risk in a deal. The nature of owning and operating a business by definition includes risk. Your goal is to seek advice that will allow you to fully understand and quantify that risk so that you can structure an appropriate terms sheet.
Business Transactions involve many moving parts which require a complete array of advisors who understand their role and respect that you are the ultimate decision maker.
Choosing the Right Advisors when Buying or Selling a Business - To learn more about this author, visit Jeff Snell's Website.
Like this article? Share it with your friends
First, let’s be clear that this article is not “if” you should consult an attorney, accountant and business broker when considering buying or selling a business. This article is about choosing the right attorney, accountant and business broker when considering buying or selling a business.
Transaction professionals (Attorneys, Accountants and Business Brokers) ALL have their role in the business transfer process. If an attorney says you don’t need a business broker or a business broker says you don’t need an accountant or an accountant says you don’t need an attorney (you get the idea) the one making that statement is the one you need to deep six from your diligence team. Anyone that can effectively and appropriately serve in all three capacities is either brilliant or more likely self delusional.
Even among qualified professional advisors there are plenty of them who are deal-breakers (even some business brokers!), but that generally happens when a buyer hires the wrong consultant. Experienced advisors understand that they are engaged to provide counsel – not to make decisions for you.
I was retained by two business partners to represent their company for sale. They had a bartered trade with a highly respected law firm with significant business law experience. The partner with which they generally worked assigned a jr. attorney. Fourteen hours before the scheduled closing the jr. attorney notified my client that they simply could not close without changing a clause that had been in the purchase agreement since the first draft was delivered over three weeks prior. He told them that he was "only looking out for their best interests". The buyer was done negotiating. So the deal fell apart. (I did sell the business to the same buyer several weeks later at a significantly lower price).
Mistake number one - they hired the wrong attorney.
Now, you may be saying, an attorney is an attorney, an accountant is an accountant and a business broker is a business broker - right? Wrong! If you have a toothache, would you go to a foot doctor? Of course not! So if you're buying or selling a business you need transaction professionals who specialize in business transactions. Ideally, you'll want one with experience in transactions of businesses similar in size and type to the one you're buying.
Each professional plays an attorney plays a very important role, but you need to know what that role is. The business broker handles communications with the buyer(s), negotiation and coordinates communication amongst the seller’s advisors. The accountant reviews financial data and provide diligence assistance. The broker shouldn’t try to paper the deal (that’s the attorney’s role), the broker shouldn’t try to provide financial diligence and the accountant shouldn’t be negotiating.
Good deals get done between the buyer and the seller and then the accountants verify the information that was relied upon and the attorneys make sure it’s papered properly. As such, you have to be very clear with them about what you and the seller have generally agreed to and based upon what specific data.
You want the Attorney, accountant and business broker to bring all the potential issues to your attention. You need them to offer sage advice about any possible issues and opportunities you may have. You want them to review any documents that you sign with an eye towards their core competency.
You definitely need to consider every issue that your advisors raise but when all is said and done, it’s your judgment and your decision.
There is always (let me reiterate ALWAYS) going to be some element of risk in a deal. The nature of owning and operating a business by definition includes risk. Your goal is to seek advice that will allow you to fully understand and quantify that risk so that you can structure an appropriate terms sheet.
Business Transactions involve many moving parts which require a complete array of advisors who understand their role and respect that you are the ultimate decision maker.
Choosing the Right Advisors when Buying or Selling a Business - To learn more about this author, visit Jeff Snell's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
|||
Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
|||
Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
|||
George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
|||
John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
|||
Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
|||
David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
|||
Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to Jeff's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
 |
||
|
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 CAN-Spam Checklist Capture More Clients Law of Attraction in Action FREE Twitter Background in PSD 11 Ways to Build Business |
|
 | ||
 |
The Top 10 ProBlogger Posts
Best Posts for Bloggers | |
 |
Choose A PR Topic
Press Release Builder | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
