By Dida Goudreau
The stakes are high for exiting owners of Lower Middle Market companies, so it is important to assemble a team of advisors early in the process. Specialized Advisors will make sure you make informed decisions that align with your goals. You will want to call on them as you transition the business to new ownership. As we quarterback the sale of the business and all that that entails, sellers can continue to run their business. We, as M&A Advisors, let our clients know early when they should seek out one of the below specialty advisors.
1. Transaction Attorney
Transaction Attorneys are well versed in what the typical terms of a purchase agreement are. They work efficiently and have the success of the transaction top of mind. They do not approach the buyer or seller litigiously, rather work with all parties to get the transaction across the finish line with their client’s best interest in mind.
2. CPA
A client’s CPA is an integral part of the team of advisors. They have most likely been working with the business owner for several years and hold key knowledge as well as the business owner’s confidence. CPAs are a key part of the transaction team and will be a valuable part of the Quality of Earnings and Due Diligence process.
3. Tax Accountant
Tax Accountants will run different deal structure scenarios so that the seller can see the tax implications and prepare for what they will and will not agree to. Tax considerations can make a huge difference in the amount of the sale that business owners keep after the exit. Since the business value is often one of a business owner’s largest investments, it is important to be thoughtful about deal terms in addition to purchase price.
4. Estate and Trust Attorney
These specialists will protect your assets and assist with understanding any tax implications related to a trust or an estate. Trust formation, administration and business succession planning are important aspects of their contribution to a business owner’s success after their exit.
5. Financial Planner/Wealth Manager
A Financial Planner or Wealth Manager will be able to help you define your goals and required capital for your retirement. If you haven’t well-defined your financial goals, you won’t be sure when you have locked in a path to get to them.
6. Exit Planning Advisor
If there is a large gap between your financial goals/needs and the current value of your business, you will want to enlist a value building advisor to help you bridge the gap. It can be as little as 18 months working with an exit planning advisor to make meaningful headway to your goals.
7. Specialty or Industry Specific Advisor
It’s always good to call on specialists as needed. Examples include IT specialists or someone well-versed in company culture turnarounds. You will find, making an investment in your business, at this stage, will show a high ROI.
As M&A Advisors, we specialize in managing the transaction and there are several specialists working in the background to help you realize your goals and retirement needs.