BUYER ADVISORY SERVICES
Crossing the finish line
Business Sales Group (BSG) started offering Buyer advisory services (Buy-side mandates) at the request of Buyers who felt like they were going into a transaction "naked" without a trusted advisor. Sellers usually have a Broker or M&A advisor representing them, but Buyers are usually alone. BSG is now offering Buyer representation and advisory services so Buyers can go into a transaction with full representation and not be alone.
THIS IS HOW BSG HELPS BUYERS THROUGH THE 7 STAGES OF BUYING A BUSINESS
Stage 1 – the Approach. Buyers often ask: How do I approach the owner of a Business I want to buy? They realize that making the right approach can kill the proposition or make a success. The approach is everything. BSG can assist in crafting an approach that will give maximum results. The benefits of having a 3rd party approach a Target are many, especially when approaching a competitor. BSG also can do a marketing campaign to generate lists of potential targets.
Stage 2 – The Offer. Making an Offer isn’t that simple. You need to do homework before making an Offer to ensure the Offer will be taken seriously. There needs to be strategy in the Offer. Question arise like: Do I make a formal or information Offer?, Do I use a LOI or IOI? Do we use a “low ball” strategy or go in at Market Price? What is Market Price?
Valuation. It is important to know the value of the business so this is where BSG can help. Buying a business can be an emotional decision and having and Business Valuation quantifies the value for you, taking the emotion out of the decision. See: http://www.MyBizValue.com for more information about Business Valuations.
Stage 3 – Offer Acceptance and Negotiation. It is imperative that “deal killers” and issues that will be a “go or no go” decision for the Buyer be identified in the early stages of a purchase transaction. It is often the case that BSG becomes a “Sounding Board” for Sellers during this stage. Seller will openly share with a 3rd party what they are not sure of sharing directly with a Buyer. Rick Krebs of BSG is a Certified negotiations expert having assisted Buyers and Sellers for over 7 years who can help you maneuver and negotiate the best possible deal.
Stage 4 - Due Diligence. This is the time when the Buyer gets to open up the books and records of the business and carefully examine everything. BSG compiles detailed lists of the documents that will need to be provided by the Seller. We have found that often a Buyer doesn’t know the questions to ask. Due Diligence is invasive for the Seller and can, if not handled properly, be a time when a deal goes sideways. Deal fatigue can set in if too much time is taken. A full Due Diligence will include detailed verification of the financial information, tax returns, books and records, accounting systems, controls, internal controls, bank statements, and spending authority. Ratio analysis is also employed as part of Due Diligence. Not only are the finances verified, the Seller is carefully vetted along with the entity, UCC filings, Court filings, etc.
At this time we often get the question “is this normal”. We answer that question throughout the whole process.
It is crucial that important nuances of the transaction be identified and, if need be, hiring the right experts to assist in giving added support to Due Diligence which may include experts in the fields of law, insurance, sales and property tax, accountants, industry experts, etc.
Stage 5 – Closing Preparation. Once the majority of the Due Diligence is completed it is time to move on to getting the legal documents prepared. This requires hiring the right attorney (one that won’t unnecessarily run up the bill potentially costing tens and even hundreds of thousands of dollars. This is a crucial stage because it is the stage in which a deal can fall apart. Advisors need to be managed at every step to ensure that they aren’t causing undue stress on either the Buyer or Seller. The preparation for closing and preparation of the schedules necessary for the Purchase Sale Agreement are crucial to a timely closing. BSG oversees this representing the Buyer, but working with the Seller to get the documents needed.
Stage 6 – Signing and Closing. The documents are prepared by attorneys, but the closing is overseen by BSG.
Stage 7 – Transition. The transition stage is a very delicate time. Employees are nervous and transitioning management needs to be handled correctly. BSG has experience with this and helps the Buyer with the initial steps in the transition.
FOR MORE INFORMATION AND FEE STRUCTURE, CALL 801-688-2554 OR EMAIL