An effective thorough advisor should do an extensive amount of sell side (internal) due diligence before commencing any external aspects of your offering. They need to learn everything they can about your company. If they do not, how can they properly represent the value of your company to the open market.
An extensive amount is not getting three years of financials and tax returns and saying they are ready to go to market. Those documents are all stale when created. That is not where the value of your company lies.
You want your advisor fully informed on:
- Legal and ownership structure
- Finance and Accounting
- Future Projections and Trends
- Margin Analysis
- Operations
- Staffing
- Marketing and Business Development
- Positives and Negatives of Company
- Legal Matters
- Seller Sales Objectives
- Post-Closing Objectives
- Preferred Buyer Profile
- Much More
Your advisor needs to be thoroughly knowledgeable and conversant on a multitude of topics in order to earn buyers respect and to do a highly effective value conveyance about your company.
The more prepared your advisor is the higher the probability of a successful outcome and closing.
Thoroughly evaluate how each advisor that you evaluate would approach your offering. You want to pass on any advisor that flies by the seat of his/her pants and is always struggling to stay one step ahead.
You want an advisor that conducts himself/herself with discipline and diligence with clearly defined objectives. Your advisor’s professionalism sets a tone for the entire offering.