Choosing who you trust to advise you when selling your business is one of the most important decisions you will ever make. Britain has seen a clear rise in the number of sell-side advisory firms, so business owners are certainly spoilt for choice. But how do you choose the right advisor? Below is our rough guide to choosing the right advisor for your sale.

Experience matters

Explore the advisor’s track record and historic deal flow. Across the community of M&A professionals there’s an appreciation that advisors in one sense are only as good as their portfolio of deals. To cut through the noise look at actual ‘deals done’. With a firm’s track record sharply in view, you can immediately assess their level of experience/expertise.

One caveat: a high volume of transactions does not necessarily mean an advisor is right for your business, but examples of significant deals done, across a range of sectors is a good indicator of capability. Where decent-sized companies are sold to credible acquirers this should boost your confidence. Even better if there is evidence of multi-national/cross border deal flow.

One common misconception is that you should only work with advisors that are sector specialists. Far from it, often it helps if an advisor has broad sector expertise, which naturally allows for ‘out of the box’ thinking, thereby offering a better, more market-informed, approach to the sale.

Do they prepare effectively?

 Always ask about how they prepare the business for exit, which is an essential question. The answer will speak volumes to their effectiveness as an advisor. Any firm worth their fee will work hard on your behalf to proactively prepare the business for sale.

Proactive preparation must involve a thorough review of the business, its financial performance, all relevant operational issues, and a deep appreciation for the shareholders objectives in the sale (including valuation). This should be a standard approach in any advisors’ offering.

Additionally, the ‘deal team’ around the table early on will also tell you everything you need to know. Is the firm a one-man band, or do they field a capable team? For example, an experienced negotiator (Client Director) must lead the process overall, and a Financial Analyst should be present, to test the robustness of the financial reporting within your accounts.

M&A Research Analysts are crucial for addressing the companies and markets that should be targeted and highlighting the most appropriate buyers. They will also expand the reach of the sale to different types of buyer, and geographic markets, ultimately creating a competitive environment around the sale.

Proactively manages the sale

The difference between an outcome that exceeds expectations and a sale that falters, can simply be a lack of proactivity. Often, low-performing brokers will simply place the business on a website or send an email campaign (neither action is particularly proactive and unlikely to yield significant results in isolation).

The best advisors proactively create a competitive environment around the sale, by identifying and contacting synergistic acquirers, preferably buyers with a history of acquisitions. It also requires contacting the right decision maker within an organisation which can result in multiple contact points.

This combination of ‘desk research’ and proactive contact with the marketplace should lead to significant interest in the sale and potentially much higher valuations. Indeed, once legitimate offers are tabled, your advisor should move up a gear, to drive valuation and to secure the best possible deal for the shareholders.

Crucially, on entering ‘due diligence’ your advisor should actively manage any/all negotiations and hold lawyers accountable for delivering effective legal proceedings, such as agreeing the terms of the Sale and Purchase Agreement (SPA) in a timely manner.

Any advisor that deviates from the above, is likely to deliver a less than sterling performance (generally speaking). It’s possible you could save on advisor fees by choosing a firm with a lesser team, but ultimately the valuation you achieve will most likely reflect their capability, rather than your true value.

How our approach differs

EvolutionCBS has never operated a high-volume broker model, favouring a proactive low volume premium guided service – by design.

We work with a limited number of clients at any one time, delivering a Low Volume Premium Guided Service that involves deep preparation, Client Director involvement, and sustained oversight throughout the process.

On average, we dedicate 1,500+ hours per client, ensuring:

• > Director-led engagement from start to completion
• > rigorous preparation before any approach to market
• > disciplined buyer selection and controlled engagement
• > consistent management through due diligence and completion

This approach is a key reason the EvolutionCBS team has maintained a long-term success rate above 75% across a diverse range of sectors.

A Final Thought

An M&A adviser should not run a sale process for its own sake. Instead, they should clarify your objectives and give you strategic direction based on their fiduciary duty to lead the sale. Ensure you choose an advisor that commits to a proactive and effective preparation for sale, who deploys a formidable team and exceptional negotiation skills on your behalf.

Ultimately, your choice of advisor will be the most significant contributing factor in achieving a significant valuation and deal structure. Sell-side advisory firms vary greatly in their ethos and practice, however using the above rough guide should help you make the right decision.

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If you would like a no-obligation consultation on the sale of your business or would like to discuss our Business Valuation Service, click here.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides them with pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment.

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment, we boast a market leading success rate with 14 year average above 75%.

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.