A successful business acquisition or sale involves a number of complex issues that require a team of professional advisors in the accounting, legal, finance, and valuation fields. These industries are extremely broad with well over one million accountants and attorneys in the U.S. alone. It is nearly impossible for one of these professionals to develop a core competency and expertise in all areas. This need by business owners and entrepreneurs for expert advice relative to a specific subject matter, or a specialized field such as small business transactions, has led to field specialization where it is now recognized as a standard. Each individual member of the transaction team, while performing a number of critical functions, will fulfill a specific role for their client (buyer or seller). For small business transactions, these professionals provide advice and guidance within their respective discipline enabling the client to make informed decisions, quantify risks, and structure the transaction on the optimal terms and conditions.
On several occasions, a client will find an advisor that offers a wide range of different services, often acting in the role of a generalist. In other instances, a professional may provide several complimentary or overlapping functions. Most experts will advise that in order to ensure that maximum value is achieved, the transaction team should be structured with independent and credentialed professionals who possess an expertise within their given field (legal, business brokerage, accounting, finance). Any professional that can appropriately and effectively serve in each of the 4 roles is either brilliant or more likely self delusional. A business broker cannot replace a CPA, financier, or attorney, any more than a CPA or attorney can take the place of a business broker. Each of the 4 professionals become critical team members and it is in everyone’s interest to have expert advisors in each of the individual roles as the transaction is likely to fall apart or subsequently fail should the wrong advisor be hired. Without exception, owning a small company, involves some element of risk. Both business sellers and buyers should understand that while these professionals are hired as a resource to obtain experienced & objective advice and sage council, there will be instances where conflicting recommendations are received and the ultimate and final decision is made by only one person – the client.
This article is written in six separate parts; sections two through six provide an in-depth review of the credentials and experience that characterize the appropriate business intermediary’s, CPA’s, attorney’s, financier’s, and valuation firms that serve as transaction team members for business acquisition and sales.