Capital advisors and realtors have much more in common then you think. A Realtor is a person that society thinks of as very normal, and even necessary, during the purchase or the sale of a house. However, a capital advisor hasn't quite reached that norm. Business owners often times work on mergers and acquisitions on their own and buy and sell their business as they please. Both capital advisors and realtors work as a "guide" for their client. They know the marketplace, they know the processes, and they know the strategy involved with buying and selling. Let's look at a few of the similarities in the processes:
Due diligence exists in both the real estate market and the capital advisor market. Due diligence is absolutely necessary when buying a house or a business. Due diligence allows the buyer to do their homework on what they are purchasing to make sure they are getting what they want. Due diligence in a home mainly consists of a walk through and making a checklist of repairs with a home inspector.
Due diligence with a capital advisor and trusted M&A advisor is a little more complex. This process takes a look at everything in the business. From the technology being used, the financials, HR related information, locations, operations, sales, and much more. In the instance of buying a business, the buyer needs to consider 3 things when it comes to due diligence:
- What business name, ownership structure, and tax structure are they going to buy it under.
- Financing - owner, earn-out, SBA and terms.
- What advisors am I using on the transaction? Accountant, attorney, insurance agent, consultants, others?
Finding The Value
In the real estate world, finding the true value of a home is known as an appraisal. This is done after the initial negotiation has been completed and basically assures the buyer that they are getting the house for the correct market value.
A capital advisor relies on a business valuation for the true market value of a business. A business valuation is done by a certified valuation analyst or an accredited business valuation professional. The purpose is to make sure both parties, the buyer and the seller, understand the fair market value of the business and put the parties on equal footing.
In both the real estate world and the capital advisor world, buyers want the highest price and sellers want the lowest price. The appraisal and the business valuation ensure that the buyers and sellers meet at the right price and there are no surprises down the road.
Much like an individual buying a house, a business owner buying a company is an enormous decision. It could easily be one of the largest decisions of that person's life. You want to make sure you have the right team in place and the right people acting as your advisors. A Capital Advisor will work closely with you, to understand your goals, and to bring those goals to life. Whether you are looking to raise capital, buy a business, sell a business, refinance debt, plan for an exit, or merge or acquire a company - a Capital Advisor can provide a seamless experience to you.
Our goal is to make Capital Advisors the norm. To ensure business owners that they are getting the best deals and going through a trusted and true process. To learn more about LBA Haynes Strand Capital Advisors - click the button below!