To get the best from your advisory team during your business exit, it’s important that you not only have great advisers, but also that they work as a team.
It’s all too easy to end up with a group of advisers who are individually excellent, but don’t work well together. Careful planning at the outset is the best way to avoid this problem.
In my last couple of posts we have been looking at how to put a great advisory team in place: Pillar 2 of my four pillars for getting the best business exit deal.
In this post we look at how best to put together a champion team rather than a team of champions. It will be a key element to you achieving a successful business exit.
A strong captain
Great sporting teams always have strong captains, right? Good leadership, in other words. It’s the same for your advisory team.
So, the first thing to do is to appoint your captain – a lead adviser to coordinate your advisory team. This could be your corporate adviser, a trusted business coach or a business exit adviser. This is a critical choice, and I strongly encourage you to take your time. If you don’t already know the person well, make sure you check them out thoroughly by way of recommendations and references before you appoint them.
The second thing is to appoint yourself or someone senior in your business to act as the key contact point for all advisers during your business exit process. Whoever plays this role, whether it’s you or one of your team, it will have a critical impact on how well your exit proceeds.
One of the key responsibilities of this role will be working with your lead adviser to choose and appoint your business exit advisory team.
Choosing the team
In my recent post, Great Advisory Teams lead to Great Exits, we looked at the types of advisers you are likely to need on your business exit advisory team. You and your lead adviser now need to nail this list down and appoint people to the various advisory roles.
Here are the key considerations when assessing potential advisers:
- Do they have the right expertise and experience?
- Are they well regarded in the marketplace, and do they come well recommended; not just by your lead adviser but also by other business owners whose opinions you respect?
- Do they have a team-orientated approach?
- Have any of them worked together well on deals before? This can be a real positive to building a well coordinated team.
- Are they solutions-orientated? While you’ll want them to argue your position strongly for you when required, you also need advisers who are good at coming up with alternative solutions to the issues that will inevitably arise.
- Are their fees fair and reasonable? Is it clear how you will be charged, and are their engagement terms clear?
You and your lead adviser also need to decide when various advisers will be needed during your exit process – it’s usually not necessary to engage them all at the outset.
Dealing with existing advisers
A sometimes difficult issue to work through when choosing your advisory team is how to deal with long-standing existing advisers such as your accountant, lawyer and ﬁnancial adviser. At the outset, you need to reach an informed view on whether your existing advisers have the necessary skills and experience to advise on your business exit.
Although it can be tough, I often ﬁnd business owners’ existing advisers don’t have the necessary skills and experience to advise them properly on their business exit. If this is the case, manage your relationship with them carefully, as they will often be important to the success of your exit due to their knowledge of your business and the business information and records they hold on your behalf.
Existing advisers – particularly long-standing ones – can sometimes behave quite strangely in this situation. They can be upset they have been overlooked for a role they felt they should have been given, be concerned about losing you as a client, or feel betrayed as one of your long-standing, trusted advisers.
The best way to deal with these issues is to have a frank discussion with your existing advisers at the earliest opportunity, to allay their fears and concerns. In most cases, business owners will want to continue using their existing advisers after their business exit. Being clear about this at the outset often reduces the risk of this becoming a difficult issue during your exit.
In my next post, we move on to Pillar 3 for getting the best exit deal: Create a competitive sale process.