Buyers | 10 Reasons to Use an Experienced Advisor
1. Specialized Knowledge
Few prudent managers would undertake a research program, design a new product or prepare a tax return without the help of an expert. The difficult task of buying or selling a business also demands the guidance of an expert. Without such help, there is too much room for missed opportunities and costly mistakes, especially when owners, management and board of directors have little hands on experience in buying or selling a business.
2. Minimizing Distractions
Nothing can be more dangerous to the quick completion of an acquisition or sale at an attractive price than having to deal with unexpected operating problems. To prevent this, it is essential that management be able to concentrate on its own operations to the fullest extent possible. This can be done only if the details of the transaction that don't require management's involvement can be delegated to a knowledgeable advisor.
Only through the involvement of an advisor can the confidentiality of the buyer or seller's identity be protected until the seriousness of the other party's interest has been demonstrated.
4. Contentious Issues
Success of the transaction could well require a harmonious relationship between buyer and seller, both during negotiations and after the closing. Preserving such a relationship will be easier if an advisor can be interposed between buyer and seller when disagreements arise.
5. Facilitating Communications
Buyers and sellers will often say things to an intermediary that they would hesitate to say to each other. A skilled advisor can take advantage of this to get beyond posturing and identify real objectives. With experience gained in many negotiations, the advisor can then structure approaches to resolving even the most seemingly difficult impasses.
6. Problem Resolution
The problems that arise in negotiating an acquisition or sale can be difficult, complex and involve several functional specialties. The breadth of experience gained by an advisor in numerous negotiations facilitates analysis of such problems, understanding how to make the most effective use of specialists from other areas, structuring solutions and communicating clearly the choices and their consequences.
7. Assessing Buyer or Seller Interest
A clear and early assessment of the buyer or seller's interest, character and financial capability is essential to protecting the other party's interests. An experienced advisor will be able to judge these from past dealings with the buyer or seller or its representatives, through professional relationships and by research.
8. Dealing with Multiple Buyers or Sellers
The quickest transaction at the best price usually requires cultivating and maintaining the interest of more than a single buyer or seller. Orchestrating dealings with multiple parties without either dampening their interest or disrupting the client's operations can be difficult. An experienced advisor will have a much better chance of assuring this is done successfully.
A buyer or seller wants neither to accept less than the best deal available nor to pursue a transaction on the basis of unreasonable expectations by either side. An experienced advisor can bring knowledge of how the marketplace values businesses, what are the likely expectations of the other party and how to negotiate the most attractive price and terms.
10. Meeting Buyer or Seller Information Requirements
An experienced advisor knows how to package a business to show it off in its best light and what information to request to allow the buyer to make a knowledgeable decision. This includes requesting or preparing documentation for buyer review and knowing which requests to defer or deny and when to persist in the face of denials.