PICKING AND USING A CONSULTANT

There is a difference (subtle sometimes) between a broker and a transaction or financial advisor. For our purposes, a transaction or financial advisor is paid like a consultant with a possible success bonus. This person serves as your advocate. The total ongoing fees should be much less than those paid to a broker. The fees are normally fixed, based on your estimated deal size. Basically, you pay money for advice and expertise.

All brokers will advise you. Some will provide superior advice. Others will tell you anything to do the deal. Most are somewhere in between.

In most cases, the transaction or financial advisor can be your coach during the sales process and help you to realistically evaluate a deal. There is a difference between your coach and your drafted super-star. A coach gets your team to perform at its best. A super-star dealmaker closes a deal even if it is not the best one for the Seller. You need to consider many issues.

An advocate can assist you in answering the following questions:
Are you receiving enough money?
Are you giving up too much with respect to non-competes?
Are these folks for real?
Is the broker getting you a good deal?
Do you really want to do this deal?

What are the economics? Assume you can clear two million dollars from a sale after brokers fees and taxes. You may still have legal and accounting costs totaling more than $50,000. Is it worth spending another $25,000 or so to bring in someone who is truly on your side? It is your call, but unless you have an experienced merger team, you probably will benefit.
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