Selecting the Right Financial Advisory Firm

Much like selling a home, selling a business is a complex process – but unlike residential real estate, there is no central resource of businesses that are for sale or of qualified buyers willing to buy them. So as CFM, how do you find the right buyer?

An experienced financial advisor can be an invaluable partner throughout the entire business sale process, bringing buyers to the table and helping the business maximize its purchase price. But not all advisors are created equal. Here are some qualities to look for in a reputable advisor:

A verifiable track record – Good advisors should have a complete list of past transactions, as well as a list of references.
An established network of prospective buyers – This should include access to numerous marketplaces and key contacts within your industry. The advisor should also have the ability to reach buyers who might not be accessible via traditional channels, such as private equity groups and investors.
Double vision – In order to gauge transaction viability, the advisor should conduct an objective and candid review of your company as it is seen through your eyes, as well as the eyes of prospective buyers. Understanding both the buy side and sell side of a transaction will help the advisor find the best match for your business.
Construction industry knowledge – The sale of a business is not just an exercise in numbers. While any advisor can do the math, the best advisor will already have a solid understanding of your business, the construction industry, and any potential threats to growth and earnings. This is the only way to predict future profitability and in turn, convey that information to potential buyers.

Once you’ve secured a trusted advisor, he or she can guide you through the steps of the process. The sale process typically begins with the collection and analysis of your company’s financial and descriptive data. From there, two other parallel phases follow: buyer identification and preparation of the descriptive memorandum and executive summary. Since these critical first steps set the the course for the entire sale, you’ll want to ensure you work with the right advisor to set reasonable expectations and determine the role you will be playing in the sale process.

A good financial advisor will help the CFM understand all transaction options, provide advice on the company valuation drivers, and develop a transaction positioning strategy that will lead to a successful transaction. The skills of the deal team and having the right financial advisor on your side are each critical to the success of an ownership transition transaction.

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