Buying a Business and Using the Right Professionals

A major misconception in the marketplace from many buyers is that buying a business is a similar process to purchasing real estate. This is not an accurate assessment though. One of the key aspects to purchasing a company is to do a thorough evaluation of the opportunity and to properly evaluate the business for sale by using professional advisors. This article will focus on some of the key professionals you may need to rely on in a business purchase and what their role might be.

Business Brokers

A business broker is a professional engaged in the purchase & sale of businesses – usually smaller businesses valued from a few million dollars and under. Essentially, they help sellers to sell and buyers to buy. An important key to working with a business broker is to understand their role in the transaction. Many times a broker will list a company for sale and act as the fiduciary to the seller. In other words the seller is their client.

If you find a business listing from a business broker and approach them about it you must be aware where their ‘loyalties’ lie. Right from the outset, before you establish a professional relationship with them, it is safe to assume that you are not a client but the seller is. This means that the broker has a duty to act with honest and ethics to you but not necessarily a fiduciary duty to you. Many business brokers offer what is know as dual-representation which is acting as a fiduciary to both parties. If you agree with this you must understand their obligations to you and the seller. The rule on dual or multiple-representation vary from state to state and province to province. In many US states, and all Canadian provinces, “business brokers” are licensed by the professional real estate organizations.


A lawyer is a critical member of your team when you decide to purchase a business. Too often, buyers wait until the very end of the process to engage the services of an attorney and this is a mistake. To be prudent, you should have your lawyer review your agency relationship with the broker or brokerage you choose to deal with and certainly review any LOI or conditional purchase agreement before you sign it.

Buying a business can be a legal tangle involving complicated deal points, representation & warranties and complex jargon so your lawyer will need to help you know your rights and your exposure. For instance, if you are buying a company with existing employees in place there may be potential severance liabilities that flow to you. A reputable business broker should have no problem to work with your lawyer. In fact, the two may need to work in tandem to advise you properly.

You should always work with a lawyer when buying a business. However, don’t ever forget that you are ultimately in charge and that it is your deal. Some lawyers may do such a good job of “protecting” their clients by eliminating all business risks that a deal is not done. There is no such thing as a business without risk!

Accountants, Tax Advisors and Business Valuators

Your accountant is an important person on your team when you invest in a business for sale. An accountant can assist in many aspects of the deal such as: should you buy assets or shares, what is the tax exposure for you, determining a fair business valuation, helping with due diligence, and more.

They key take-away from this section is that while you should always use an accountant (early in the process) when buying a company, not all accountants are created equal. Realize that some are tax experts while others have completes a course of study on business valuation – two very different skill-sets. Get references and certainly ask your lawyer or business intermediary if they can refer someone with relevant deal exposure.

Other Consultants

You may find that buying a gas station will require a significant environment study done so you may need to find a certified environmental consultant. If you are considering a heavy equipment dealer business you may need the services of a machinery appraiser. A business with some real estate assets involved may need a property appraiser. The point is that every business sale is unique. Don’t rely on your own insight if you are not an expert in the field and certainly don’t merely rely on information provided by the seller whose motivation is in selling a business. Be a skeptic and get the third party assessments done. It may be slightly more costly at the outset but could save significant dollars lost.


Steve Skrlac is a business brokerage professional with Coldwell Banker, Pinnacle. Steve serves the Greater Toronto Area (GTA)and southern Ontario. He assists purchasers and sellers of businesses valued under $5 million. Steve has an MBA degree and a CFA designation and has extensive consulting and business banking experience. He is also a former business owner himself and is uniquely qualified to assist his clients in buying or

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