As the traditional saying goes, “There are deal makers and deal breakers.” Having the right group of business advisors is critical to consummating a successful deal. Hire the right group of business advisors. This begins with an experienced professional business broker. Next comes a trusted attorney who has experience in deal-making. The best attorney is one who has been through the business sale process many times. One who is a deal maker with the ability to seek solutions, not a deal breaker seeking “why not to” reasons. Then there are the accountants. The accountants must be deal-oriented. If the accountant is the company’s outside advisor, he or she must be ready to work in the best interest of putting the deal together, even though he/she may not be retained by the buyer.
Each Business Advisor Has a Role
Business brokers, attorneys and accountants all have their roles to play in making the deal work. They should be professionals who understand that their roles are to give advice, and not to make the final decision for the seller or buyer.
Once we were retained by a business seller who wanted to save money in legal fees. He hired his cousin to be his attorney. His cousin was a divorce attorney and had no experience in business transactions. To say it was a nightmare would be an understatement. The negotiations dragged on for weeks over the most ridiculous issues. This attorney’s mission was to get the “best deal” for his client. He frequently forgot that the “best deal” has to involve both parties, the buyer and the seller, and that compromise is usually the best solution. Not being an experienced transaction attorney, he had a difficult time with compromise in this type of situation because he saw his role as advising his client (cousin) on how to get the better deal. Generally, an attempt at a lopsided deal, for either party, will result in no deal at all.
In this case, the buyer was done negotiating, so the deal fell apart. The cousin was the wrong attorney. The seller needed an attorney who could work with the broker and the accountant to fashion a deal both sides would accept. The seller needed professionals who specialize in this sort of transaction. If you had a heart ailment, you wouldn’t go to a podiatrist, would you? Specialization and experience are vital in choosing the right business advisors.
Furthermore, each professional plays a very important role, but you need to know what that role is. You want your business broker, your attorney, and your accountant to cover all potential issues, and to bring them to your attention. You want to use their competencies to review all documents related to the transaction, and to give you their best possible advice.
Element of Risk
There is always going to be some element of risk in any business deal. The nature of owning and operating a business by definition includes risk. Your objective is to seek guidance that will allow you to fully understand and quantify that risk. Business transactions involve many moving parts which require a complete group of business advisers who understand their role and respect that you are the ultimate decision maker.
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