How to choose an adviser to sell your business
Compare the team that will actually run your sale, their relevant experience, their access to buyers and their process discipline, as well as the brand and the fee.
Comparable experience
In the UK, owners selling a company with £1m to £30m of revenue usually choose between corporate finance boutiques, the corporate finance teams of accountancy firms and business brokers. Labels vary, so look past them.
Ask for examples of completed deals for companies of similar size, sector, revenue model and complexity. Ask what role each person played, and ask for references where possible. A well-known name is no substitute for the experience of the team assigned to you. Find out who pitches, who prepares the materials, who calls buyers and who negotiates.
Access to buyers
The adviser should explain which types of buyer might value your company most, why they fit and how they will reach the people who decide. Ask for an anonymised sample longlist and the criteria for leaving names off.
Look for judgement and relevant relationships, not a mass mailing list. Quality also shows in how they protect confidentiality and deal with direct competitors.
Process and time commitment
Ask how many live engagements each person is running, how the financial model will be built and what information you will need to provide. Ask for a timetable, named owners, how often you will get updates and how buyer lists and communications will be approved.
Clearly defined fees
Compare retainer, success fee, minimum fee, expenses, exclusivity and tail clause on the same basis. Model several prices, debt levels, deferred consideration and earn-outs to see when each amount becomes payable. Our guide to M&A adviser fees goes through each element. Be wary of large upfront fees that are not tied to defined work.
What the engagement letter should cover
Set out scope, deliverables, team, fee base, your pre-existing contacts, your right of veto, confidentiality, duration, termination and the final list of parties covered by the tail. Check the firm's professional indemnity insurance and, where the deal requires it, its FCA status. A good working relationship starts with a contract both sides read the same way.
