26 Oct How to Remain at the Heart of the Buying and Selling Process
In our previous article, we covered a range of thoughts from business broker legend Doug Robbins on how to deal with a client’s professionals. This was based on our recent Business Brokerage Press webinar. As Robbins points out, lawyers can add a significant layer of complication to almost every aspect of a transaction.
Whether it is lawyers who are unqualified to those who are looking to charge their clients as much as possible or even interfere with the sale of a business, lawyer incompetence and interference can play a sizable negative role in the successful execution of deals. Let’s turn our attention to steps that you can take to reduce the complications that lawyers and other professionals can introduce into the buying and selling process.
Robbins notes that business brokers and M&A advisors must be aware that lawyers and other professionals, such as accountants, can wrestle control from you when they are left unchecked. Therefore, you should always be looking for ways to control the narrative, as this is likely to result in time and cost savings for both buyers and sellers alike. Additionally, Robbins points out that some lawyers come with additional red flags, for example, lawyers that “do a bit of everything,” and will take almost anyone as a client.
As Robbins observes, accountants are “great historians” in that they can tell a client all about their financial past, but they know little how to help their clients improve their business or plan an exit strategy. Accountants are also good at charging large annual fees. Many buyers have made a business more profitable by simply changing their accounting firm. He notes, “the bottom line is you can run into some bad people who need a profession.”
So how should you deal with the potential interference of lawyers, accountants and other professionals? The answer to this question is complex. At the core of his message is that you must invest the time and effort to maintain control over the flow of information between all parties involved. Phrased another way, you must be seen as the party that is in charge of organizing all of the information and the flow of information between parties. The lawyers shouldn’t be the ones governing the process.
Part of how business brokers and M&A advisors can achieve and maintain control over the transaction process is to educate lawyers and to demonstrate to all parties involved just how much expertise and value they bring to the table. One tool for achieving this goal is to set up meetings that include a seller’s key professionals such as lawyers, accountants and wealth managers.
At that meeting, he recommends that you present a comprehensive business assessment, which can be up to one hundred pages. This assessment is a highly researched document that outlines every aspect of the business from its competition, employees, and equipment to its suppliers and customers. Financial history and its financial future are factored into the document as well. As Robbins states, “In this way, we set the agenda.”
Business brokers and M&A advisors must constantly demonstrate that they are the ones that understand the “ins and outs” of a business and its valuation. It’s essential to remember that you are not “part” of the process, but are instead the core organizing element. All information should flow to and through you. You are the heart of the process, not simply a part of the process.