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Red Flags When Choosing Your Business Exit Adviser



Red Flags When Choosing Your Business Exit Adviser

Picking the wrong business adviser will probably spell disaster for your deal. With automation on the rise and a plethora of so-called experts and start up advisory firms vying for your attention, exercising caution is paramount. As a seasoned M&A business adviser, I see a growing number of hurdles and pitfalls and emphasise the need for informed decision-making in this non-regulated sector. Here are five crucial points to keep in mind when selecting a business adviser:


1. Experience, Experience, Experience: Experience is non-negotiable when selling and exiting your business. Novices simply won't cut it on your deal. Seek out advisers with a proven track record of navigating complex transactions successfully. Only those who have weathered many storms supporting their clients with deal-making can offer the insights and strategic foresight needed to steer your transaction to success.


2. Evaluate the Adviser, Not Just the Firm: Don't be dazzled by the glitz of the firm's name. Drill down into the individual adviser's credentials and past performance. It's easy for a large or prestigious firm to mask the shortcomings of an inexperienced adviser. Scrutinise their expertise, industry knowledge, and ability to deliver results. Remember, it's the adviser who will be in the trenches with you, not the firm.


3. Engage Directly with the Actual Adviser: Don't fall into the trap of talking solely with the sales team or senior partners before engaging services. Demand direct engagement with the adviser who will be handling your deal from start to finish. This allows you to assess their communication skills, problem-solving approach, and commitment to your success. After all, you're entrusting them with one of the most significant transactions of your career.


4. Beware of Reference-Based Selling: References can be deceiving. No adviser will willingly provide a negative reference. Instead of relying solely on glowing testimonials, dig deeper. Seek out impartial reviews and inquire about specific challenges they've faced in past deals. Blindly trusting references will take you eye off the important adviser section questions.


5. Steer Clear of Theory-Based and Cookie-Cutter Advisers: When selling a business or preparing for exit, practical experience trumps theory, and bespoke solutions reign supreme. Beware of advisers who rely solely on theoretical knowledge or offer generic, one-size-fits-all services. While they may appear knowledgeable on paper, they often lack the hands-on expertise and flexibility required to navigate the intricacies of real-world transactions. Avoid the temptation of entrusting your deal to these cookie-cutter advisers who offer little more than recycled strategies and theoretical concepts. Instead, opt for advisers who tailor their approach to your unique needs, drawing upon their wealth of practical experience to craft bespoke solutions that drive success.


Advantages and Benefits: You will only sell your business once and you can safeguard your business exit from potential pitfalls and ensure a smoother transaction process. These include:


  • Risk Mitigation: Seasoned advisers bring a wealth of experience to the table, helping you identify and mitigate potential risks.

  • Value Maximisation: Experienced advisers possess the strategic acumen to negotiate favourable terms and maximise value for all parties involved.

  • Timely Execution: Proficient advisers can expedite the deal process, minimising delays and ensuring timely execution.

  • Access to Networks: Established advisers have extensive networks within the industry, facilitating introductions to key stakeholders.

  • Peace of Mind: Choosing the right adviser instils confidence, knowing that you have a trusted partner guiding you towards a successful outcome.


In conclusion, entrusting your business sale and exit to an inexperienced or theory-based adviser is a recipe for disaster. Exercise caution, evaluate your options diligently, and choose wisely. Your deal's success depends on it.

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