When looking to sell your business, selecting the right professional advisers is essential to a smooth sale at the maximum price. The key professional will be the financial adviser and making the right choice will massively influence the successful sale, benefiting you by offering:
The role of the financial adviser
The financial adviser can fulfil a number of key roles:
Types of adviser
It is easy to make a mistake in choosing a financial adviser and, depending partly on the size of your business, there are a number of options:
Specialist M&A firms. These tend to fall into two categories:
1. The ‘estate agents’, who usually take a very limited marketing approach and who put businesses up for sale at an ‘asking price’ – a starting point negotiations will only go down from.
2. Specialist M&A professionals. These fall into two sub-types: those offering a sale only service and those offering a comprehensive package.
We would strongly recommend that owners select advisors who are able to provide a comprehensive package to help them through the whole process.
Tips for choosing a financial adviser
There are a number of things to keep in mind when making the all-important financial advisory appointment:
The other advisers
If you are contemplating a sale then it is essential that you consider the adequacy of your existing advisers.
Looking at the key areas in turn:
The old ‘family retainer’ may be good for conveyancing, wills and employment issues but specialist skills are required to deal with a company sale. A good lawyer with commercial flair can add significant value to a transaction and you should consider at an early stage whether your existing legal adviser has the right skills. Points to bear in mind are:
For clients who don’t have an appropriate legal contact, we can introduce you to our panel of recommended law firms. Whether large or small, provincial or London based, they are highly experienced in company sale transactions and have worked with the CH team on countless satisfactory deals.
Your business, and the auditors files, will almost certainly be subject to due diligence so the key question to ask is “would the auditors’ files pass the test?”
Even if there are some reservations over this question, many owners are tempted to use their existing accountants and auditors because of the relationship and the knowledge they have built on the business, perhaps over a number of years. However, the key consideration should always be to appoint advisers who will be able to do the best to maximise the value of the sale.
It may be that your own auditors/accountants are on the ball, but if not, you need to consider appointing a specialist adviser who has wide experience of advising owners selling their businesses. A vital aspect of the deal value is not just the purchase price achieved but the net amount that the seller gets to keep after paying taxes on the proceeds.
The majority of firms offering a financial advisory service do not provide tax support for the seller. A small minority, include this in a full support package, as we do at Clarkson Hyde.
Depending upon the company’s circumstances, you may need to review other advisers such as IFA’s (are all matters such as directors’ and staff pensions satisfactory and up to date?), property advisers (are your current advisers properly equipped to deal with matters arising from a sale?) and so on.
The sale process can be quite stressful so it is important to ensure at an early stage that you have the right team of advisers, both old and new, to support you from start to finish. Not only this but it will assist greatly if you can meet with all of the key advisors face to face, preferably at your premises, so they can gain a proper understanding of your business and therefore provide the very best advice on the transaction.