Clients often undertake extensive research before reaching out to an M&A advisor. Many find information about price and get scared away from hiring these valuable advisors. The truth is that the right advisor offers extensive value, and can greatly increase the total sale price while reducing your stress. Here are four key reasons to hire an M&A advisor.
You’ll Look Better
A professional advisor creates a pitchbook of your company that educates buyers about your business, presents the business in a favorable light, and helps move the transaction closer to completion. This marketing document is a powerful tool that can drum up interest and help create a competitive bidding process.
Moreover, a professional advisor lends their expertise, helping you avoid mistakes that make you look bad. They also make clear that you are serious about the transaction, potentially deterring buyers who are just shopping around and increasing the interest of buyers who only want to participate in a professional, well-run process.
A Higher Sale Price With Better Terms
An M&A advisor works to recruit multiple buyers and nurture a competitive bidding process that lends the transaction an air of urgency and excitement. This can expedite due diligence and encourage buyers to present their best possible offer.
Many sellers are approached by interested buyers, but after months of negotiations, they find that the buyer is unqualified or was never serious about the purchase. An M&A advisor helps vet available capital, transaction experience, motivation, and other factors that may affect the success of a deal. In so doing, they move the transaction forward and increase value.
The terms of the deal are just as important as the final sale price, but many sellers neglect this important deal component. The right M&A advisor can help you better understand precisely how various deal terms might affect the total cash you get from the deal.
Selling a business is inherently time-consuming and stressful. The advisor tackles many of the most stressful aspects of a sale, including negotiating deal terms and marketing the business. This enables you to focus on continuing to grow your business, reducing your stress and potentially even increasing the total value of the sale.
The buyer is also a buffer who can deliver bad news to the seller and help shield you from the emotional complexities of selling something you’ve poured your heart and soul into. This can protect the transaction by preserving trust between the buyer and seller. It also protects your mental health, ensuring that selling your business does not become a chronic source of stress.
Protect Your Interests
Confidentiality is the key to the success of any transaction. An M&A advisor uses several strategies to protect confidentiality, including the use of a legally binding non-disclosure agreement. They also ensure the buyer has the ability to fund the deal and run your business. This can be tough for an owner to do, since vetting the buyer can undermine the relationship between the buyer and owner and marketing the business inevitably entails revealing some information about the business.
The M&A advisor balances these competing interests, progressively revealing more about the business as the buyer earns trust and displays appropriate interest.