What’s the advisor’s role when a client sells their business?

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Understanding the process will help clients prepare and get the most from their life’s work

Advisors often get to manage the proceeds when a client sells a business. With that in mind, it’s important to understand the process and provide guidance., more than three-quarters of owners of small- and medium-sized businesses are planning to exit their companies by 2032. When they do, advisors often get to manage the bulk of the proceeds from the sale.

With that in mind, advisors need to understand the sale process and provide guidance where they can. So, what’s involved in selling a company?A typical transaction takes nine months from start to finish. Here’s a breakdown of the process and what a mergers and acquisitions advisory firm does:When an M&A advisory firm is introduced to a client, it prepares a free valuation estimate for the company. That ensures the parties are aligned on price expectations before moving forward.

The financial advisor should try to stay on top of the client’s intentions for their business, especially if they’re at or approaching retirement age. It’s always better to start the conversation early and get the business owner thinking about what an eventual exit will look like. Some business owners don’t even realize they can sell their companies.

If the client decides to sell, advisors can introduce them to an experienced M&A advisor, ideally one within their professional network. At a minimum, the M&A advisor can give the client some advice and a free valuation estimate.Business owners shouldn’t try to negotiate a deal on their own.

A financial advisor can get clients thinking about succession planning early and ensure they get the most from their lifetime of labour. And, of course, advisors will make sure clients manage the proceeds in a safe and tax-efficient manner.

 

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