If you are considering selling your business, professionals like brokers and corporate finance advisers can play a significant role in helping you complete a successful sale, from finding an appropriate buyer to negotiating and completing the deal. When it comes time to choosing a professional to support you, it is important to know the difference between a broker and a corporate finance adviser, and what you can expect from working with them.
What is the role of a broker?
A broker’s role is to match a vendor and the acquirer to facilitate a sale of a business.
Typically, you will meet with a sales representative who will talk you through the initial sales process, and once instructed, you will be passed on to a broker who will prepare a brief sales document which provides a high-level overview of the business. This document will then be shared with a large number of potentially unrelated parties.
If this process identifies a buyer, the broker may assist with the initial deal negotiations up to the heads of terms stage but often, we have found through experience, the client will be left alone to work through the due diligence process. Further discussions with advisers and negotiating the finer details of the sale directly are often left to the seller themselves. This is when working with a corporate finance adviser can be beneficial.
What is the role of a corporate finance adviser?
Typically, corporate finance advisers take the ‘lead adviser’ role, offering a qualified service and managing the transaction from start to finish. A lead adviser takes time to understand the business, its industry and its owners, and the factors which will maximise the value of the business. Ahead of commencing the sales process, the lead adviser will spend time identifying any issues which could negatively impact value, ensuring, where possible, that these are mitigated ahead of time.
Similar to the broker, the corporate finance adviser will also prepare sales documentation but in the form of a comprehensive Information Memorandum – going into greater detail on key commercial and financial points of the business. When launching the business for sale, a lead adviser will use a highly targeted, confidential marketing strategy to identify potential buyers. Focus will be placed on those willing to pay a premium to acquire your business, rather than a ‘scatter gun’ approach which brokers may take. This quality over quantity approach maintains the confidentiality of the business sale, and reduces the risk of the acquisition becoming known to employees, customers, and suppliers.
At PM+M, our corporate finance advisers will be with you every step of the way, from our initial introduction through initial sales and marketing strategy meetings through to attending each buyer meeting. Our advisers will work closely with you to negotiate a deal which you are satisfied with in both value and structure.
Once a deal has been agreed, a broker will usually withdraw from the process and the key distinction between the two services becomes more evident. A corporate finance adviser will ‘project manage’ the process, liaising with other advisers involved in the sale, particularly your solicitors, to coordinate and lead on negotiations, whilst ensuring value is protected and where possible, maximising the consideration achieved for your business. Typically, transactions are complex in nature, and it is rare for all terms to be agreed from the outset. During the due diligence and legal process, as more information is uncovered about the target business, the buyer may seek to renegotiate terms and a corporate finance adviser will be on hand to react quickly if needed.
Ultimately, the corporate finance adviser’s role is to support the client through the entire sale journey, from initial appointment through to successful sale.
Get in touch
If you are considering selling your business, speak to our corporate finance advisers at PM+M who will work closely with you throughout the process, managing communications, negotiations and offering value protection.
PM+M is also a full-service firm, offering audit, accounts, cloud accounting, financial planning, payroll, and tax services. This means we collaborate to support our clients, offering a fully joined-up approach, all under one roof.
If you would like to arrange a confidential conversation at a time to suit, including evenings or weekends, contact corporate finance manager Ryan Bilsborough by clicking the button below.
