We are always asked why our clients should hire an advisor rather than representing themselves. In the end, this decision is no different than many others. Does the advisor add enough value to justify the investment?
Here are some of our responses to why you should hire an advisor:
- The process is time-consuming and difficult. It is not as simple as finding a buyer and getting a good multiple. An agency owner has never gone through an entire process, while an advisor has done it many times.
- Most business owners are sales-oriented. Most advisors are financial experts and understand the intricacies of deal terms and deal structures. If they know the insurance business, that is a major advantage.
- Advisors know the buyers and understand their concerns and deal issues. The advisor is also best able to match cultures.
- Once initial introductions are made, the business owners will be working with the M&A groups of the buyers. These individuals are more financially oriented than most business owners.
- The business owner is often too close to the agency to see its flaws. An advisor can identify the agency’s weaknesses and help address those weaknesses before marketing the agency.
- Advisors should have deal experience and industry experience. Most agency owners focus on multiples. Advisors should focus on the agency’s earnings. A small increase in multiples doesn’t have much of an impact on deal value. A small change in the earnings can dramatically impact the transaction value.
- An advisor allows you to continue to run your business, retain existing clients, and generate new clients. All agency owners underestimate the time commitment of a sales process.
- An advisor’s role is to understand the impact from everyone’s point of view, including the buyers’, your employees, your vendors, and your family. It is often difficult for an agency owner to see things from the perspective of the Buyer.
- An advisor can evaluate all of your options. Sometimes, a sale is not the only or best option.
- The sale of your business may be the single most important decision of your career. Would you suggest that your client make a similar decision without the benefit of your expertise? Expertise has value.
If you are considering a merger, acquisition, or divestiture, reach out to Sukay & Associates to discuss your options and ensure the best possible outcome.
