This article are provided for information purposes only, and are not intended as legal advice.

How do you find a good advisor?

December 20th, 2008

The easiest way to find a new adviser is by word of mouth.  Do not discard advertisements that you see.  You need to look for several specific qualities 1) you must be able to get along  with them 2) they must

have experience in buying and selling businesses.  You do not want to have your advisor learn by making mistakes in your negotiations.  3) they should have a tax background. Remember, it is not the price that you get for your business which is important, it is the amount of cash that you get to retain that is far more important.

The advisor does not have to work for a large firm. They can range from a one man show to a partner in a larger firm.  Do not get fooled, just because there are many partners in a firm, he/she could still be a one man show.  Many firms are cost sharing arrangements therefore bigger is not always better.  It comes down to the individual.  How much experience do they have in dealing with buying and selling a business, do they provide helpful ideas in your original discussions?  Are they proactive or reactive?  Do they come up with ideas or only answer your questions so ultimately, you are the one with the ideas and not the professional?  Can you understand them?  You may laugh at this point however you can hire a brilliant accountant but if they are unable to communicate the recommendation they are making to you in a way that you can understand and implement, what benefit does the accountant provide?  Advisors may be expensive but a good one could end up saving you many times his/her fee.

You never know if you are going to run into a problem in advance so sellers of businesses and buyers of businesses are often reluctant to pay the price for a good advisor.  But if a problem arises, the cost of fixing the problem, if possible could be a multiple of the savings that you originally thought you were going to save by selecting a less expensive professional.  There is often a reason why one advisor is more expensive than another, it usually has to do with experience.  You get what you pay for.

Filed under: Uncategorized — Gary Landa @ 11:06 am

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