How to Choose the Right M&A Advisor

Knowing how to choose the right mergers and acquisitions (M&A) Advisor can make the difference between success and failure when selling your online business. From preparing your business for sale to closing the deal, a skilled M&A Advisor can help you navigate the entire exit process with confidence and clarity.

In this article, we discuss several important aspects related to choosing the right M&A Advisor, including:

• Reasons to hire an M&A Advisor
• Five key elements to consider when choosing an M&A Advisor
• How to find the right M&A Advisor 

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Reasons to Hire an M&A Advisor

Selling your online business successfully can be a daunting task. From start to finish, there are a number of crucial situations to navigate. Having the right M&A Advisor on your team provides a range of important benefits.

Prepare your business for sale

Effectively preparing your business for sale is crucial to creating a successful exit. Ideally, the preparation process should start long before you decide it is time to sell. From the beginning, your business Advisor can provide you with an accurate and thorough business valuation.

In addition to letting you know how much your business is worth, the valuation also allows you to identify the strengths and weaknesses of your company. Armed with this information, you can implement changes to increase your company’s value prior to selling it.

A good M&A Advisor will also guide you to clean up your financial statements and create clear documentation prior to listing your company. This will make your business more attractive to prospective buyers, helping to ensure an easier selling process.

Reach more potential buyers

Once you have prepared your business for exit, it is time to list it for sale. 

Your Advisor can help advertise your business to their own network of qualified buyers. The more interest you can attract, the more competition you will create for your company. With more competition, you increase your chances of achieving a successful exit. 

Negotiate better deal terms

After you have received offers from potential buyers, it is common to discuss and negotiate with the prospective buyer in order to arrive at an acceptable agreement. During this period, you may be answering questions, providing information, making counteroffers, and negotiating the terms of the sale. 

Due to the complexity and nuance of these negotiations, the right Advisor can help you navigate the situation more effectively than you otherwise could have on your own. 

Achieve a higher purchase price

As a result of careful preparation, effective advertising, and skillful negotiation, the right M&A Advisor can help you achieve a higher price for your business sale than you otherwise could have on your own. In fact, your Advisor should more than make up for their fee in the form of a higher sale price. 

Given that a majority of the profit you derive from your business comes at the time of sale, it makes sense to do all that you can to maximize your final sale price. 

“Your Advisor can help you choose the best deal terms for your specific needs.”

Win better deal terms

A successful exit is measured by more than just the final sale price, however. The terms of the deal also play an important role in determining your overall selling experience. 

There are many different ways to schedule or structure payment from the buyer. Some favor you as the seller more, while others favor the buyer. Your Advisor can help you choose the best deal terms for your specific needs. Once you have an idea of the terms you hope to achieve, you can work together to negotiate those terms.

“Ideally, it is advisable to work with a broker who has knowledge and experience within your industry and business model.”

Five Key Elements to Consider to Ensure You Choose the Right M&A Advisor

Not all M&A Advisors are appropriate for every transaction. Choosing the right M&A Advisor for your specific needs is crucial to achieving success. 

1. Experience is key

When selecting your Advisor, be sure to ask them about their previous experience. Ideally, it is advisable to work with a broker who has knowledge and experience within your industry and business model. 

For example, let’s say you own a SaaS company. In this case, it would be smart to find an Advisor who has sold SaaS businesses in the past or has experience managing SaaS companies. 

An Advisor with previous related experience would be able to provide helpful advice on how to prepare your company for sale. In addition, they would be more aware of what interested buyers are looking for, as well as the current market trends for your industry. 

2. Look at their motivation

It is also helpful to assess what motivates a prospective Advisor. The right broker for you should be genuinely interested in learning about your business and its operations. 

They should also seek to get to know you as a business owner and understand what your goals are for selling the business. Then, they can help you organize your efforts in a way that allows you to achieve your goals. 

On the other hand, if an Advisor seems to be pushing for a quick sale to collect their commission paycheck and move on, they may not have your best interests at heart. 

“In reality, you want an Advisor who isn’t afraid to speak their mind, pushes back when needed, and sets realistic expectations about the selling process.”

3. Make sure they set realistic expectations

While working with someone who always agrees with you or paints an unrealistically rosy picture can feel good in the moment, it won’t help you achieve success. In reality, you want an Advisor who isn’t afraid to speak their mind, pushes back when needed, and sets realistic expectations about the selling process. 

4. Establish good rapport

You and your Advisor will be spending a lot of time working together to prepare and sell your business, whether it’s creating standard operating procedures or negotiating with a potential buyer. As with any venture, you want to work with someone with whom you get along well. 

5. Learn about the services they provide

Lastly, it is important to look at the services a potential Advisor provides when deciding whom to work with. For example, if you need particular help navigating financial turmoil, look for someone with that expertise. 

Other common services and attributes to look for include:

• Business valuation skills
• Marketing your business to potential buyers
• Negotiating with interested parties
• Access to a wider network of serious buyers

Whatever your specific needs are, be sure to choose an Advisor who provides the services you need. 

“Online business broker directories provide you with a large number of potential Advisors to choose from.”

How to Find an M&A Advisor

There are several places to look when finding the right business broker. Below, we briefly discuss three options available to you. 

Use the IBBA database

The International Business Brokers Association (IBBA) maintains a database of professional business brokers throughout the United States and Canada. You can search for an Advisory firm by industry or geographic region to find one that meets your needs. 

Use your professional network

You can also make use of your professional network to find a trusted Advisor. Ask friends or colleagues who have sold their businesses if they have anyone they would recommend. Whether you are looking for a financial advisor or a business broker, asking for referrals from trusted contacts is a great way to go. 

Look at online business broker directories

Lastly, online business broker directories provide you with a large number of potential Advisors to choose from. You can search by industry or profession to narrow in on an Advisor who is well-suited for your specific needs.