When to Hire Advisors for a Business Sale
One of the biggest questions founders ask when preparing to sell is: when should I hire advisors? From investment bankers and lawyers to accountants and financial planners, the order and timing of who you bring in can shape both your costs and your outcome.
In this video, Kirk Michie explains best practices for engaging advisors, why valuation specialists aren’t always necessary, and how to make sure you’re prepared before letters of intent and purchase agreements hit your desk.
When Should You Bring in the Advisors?
For many founders, selling a business is the single largest financial event of their lives. Choosing the right advisors—and knowing when to bring them in—can make or break the process.
TIming for M&A Advisors
Start with Transaction Advisors
If you’re unsure what your company is worth, the fastest way to find out is by speaking with active investment bankers or transaction advisors. They work on deals every day, have access to market data, and can provide a realistic valuation range without charging for a full appraisal.
Financial Advisors for Capital Sufficiency
Before you decide on a target number, talk to your financial advisor about capital sufficiency. How much do you need on a pre-tax basis so that after taxes and investment returns, you can fund your lifestyle indefinitely or seed your next venture? This analysis helps set a personal baseline for what you require from a deal.
When to Involve Attorneys
An experienced M&A attorney is critical once you receive a letter of intent (LOI). While your banker and other advisors may weigh in, only a lawyer can fully identify risks and negotiate terms in line with market standards. You don’t need to retain them heavily at the beginning, but you should have one lined up well before you sign an LOI.
Accountants and Tax Planning
Smart tax planning well ahead of a sale can significantly impact net proceeds. Accountants can advise on issues like asset vs. stock sales, residency changes, and structuring for tax efficiency. Some may also perform sell-side quality of earnings (QofE) analyses, which help buyers gain confidence in your financials.
The Right Sequence
Bringing in advisors too early can add unnecessary cost, while bringing them in too late can create avoidable risks. The best approach is to:
Start with a banker or transaction advisor to gauge market value
Use a financial advisor for capital sufficiency planning
Bring in accountants for tax-smart structuring ahead of a sale
Engage an M&A attorney before signing an LOI
Crush your exit
START BUILDING YOUR LEGACY TODAY.
You’ve poured years into building your business. ExitWell helps you prepare it for the biggest moment yet: your exit. Led by veteran investor and advisor Kirk Michie, our mastermind groups give founders the tools, coaching, and expert guidance to prepare for a successful sale—whether it happens in 6 months or 3 years.
