Seek out good advice in business

SOURCE: Green Bay Press Gazette, January 10, 2010

By Scott Bushkie

There’s no such thing as too much good advice. That’s why we advise business owners to gather a team of experts when selling their business.

We always prefer it when a client is using specialized advisors. The process is easier and the outcome is better for everyone involved.

If you’re talking to the wrong people, you’re going to get bad advice. And bad advice means lost value and potentially no sale. A sale runs just like a computer—garbage in, garbage out.

Well before, if possible, you begin considering a sale; gather an estate planning attorney, financial advisor, a tax advisor and business intermediary.

Be comfortable your financial advisor can handle large sums of money. If most of your wealth has been tied up in the business, you may have been working with an advisor who specializes in small accounts. That won’t serve you well after a sale.

Identify an estate planning attorney. If your corporate attorney doesn’t specialize in long-range estate planning, ask to meet with someone else in the firm or go to a different firm for this transaction (think of it as ‘heart surgery’.)

And remember that a business intermediary is a valuable part of the planning process—even years in advance. They will review mergers and acquisition (M&A) trends in your industry and make some predictions for the near future.

An intermediary will give you a good idea of what companies in your industry are selling for. After reviewing your business, he or she should be able to identify several value-drivers that could be enhanced to better position your company for sale.

As you’re getting ready to market the company, it’s time to bring back the tax advisor and add an M&A attorney to the team.

Once a tax accountant understands the approximate value of your company, they will look at different strategies—both pre and post sale—to maximize your final return. At the end of the day, it’s not the purchase price that matters; it’s what you walk away with in your pocket.

Later, the tax accountant will review the letters of intent (initial offers to purchase) provided through the intermediary and outline the tax ramifications of various deal structures.

Finally, the M&A attorney is another legal specialist who will review contract documents to ensure your interests have been properly protected in the business transition and subsequent payment arrangements.

Each specialist is critical, in both the planning and sale processes. No one person can do it all, especially not a business owner themselves. You only sell your business once, and it’s no time for you—or any of your current advisors—to be learning on the job.

If you want to maximize value, minimize risk, minimize taxes and go out on your own terms not someone else’s, gather a specialized team. You don’t know what you don’t know, and that’s too costly to risk.

Scott Bushkie is President of Cornerstone Business Services. To request a no cost book with advice on the crucial planning process contact Scott at (920) 436.9890 or sbushkie@conerstone-business.com.