The A Team
Some deals take a long time to conclude. A transaction can take many months from initial discussions to completion. There are several factors that determine the time it takes to bring things to a satisfactory conclusion. In our experience, the quality of your deal team is one of the main drivers of success for all parties. Here are a few pointers to help you build your team: –
Who is on the deal team?
Someone inside your firm should lead the charge (see below for more on this). Their job is to document and co-ordinate the plan of action. You will likely need to engage with advisers on regulatory, tax, and financial matters. Don’t assume that your accountant can do this as they will need to have corporate finance experience. A lawyer with experience in IFA transactions is sensible. You may also need guidance on deal structure, financial forecasting, integration planning and related project matters. If you need funding, you should identify the nature and source of that capital in advance of concluding your deal.
Who is in charge?
There needs to be an assigned individual, inside the firm, who is responsible for the deal. All communication goes through this person and authority for all day to day aspects of the firm, need to be delegated to this individual. If you own a small firm, it’s likely to be you but in larger firms with multiple owners, huge time can be wasted passing every decision across the desk of every individual. Come up with a plan, check everyone understands it, then delegate responsibility to one individual and let them get on with it.
When do you appoint the deal team?
Appoint your deal team as soon as possible. Do some market research, meet with a few different firms and make a value judgement on your appointments. This can take time and you don’t want to be doing this when you have deadlines ahead of you. To avoid delay in implementation, research your advisers while you are negotiating, not after the fact.
Where do you find your deal team?
Referrals are best. We work with a variety of professionals on each deal. We keep track of the best ones and can suggest options. You will doubtless know other people who can recommend professionals too.
How do you negotiate a good deal with your advisers?
Aligning incentives is essential. There is no right or wrong in terms of fixed fees vs hourly rates. In general firms that can demonstrate a clear value proposition, a strong track record and are able to offer references (that you can talk to), are worth considering. Price alone is rarely the best factor upon which to make your decision.
How do you get everyone to work together?
The last thing you want is a deal team that are pulling apart. Work in a structured and collaborative manner as the process unfolds. Set a communication schedule and make sure your team are regularly updated. Don’t forget to ask for a schedule of time off! Deal completion is often delayed because a pivotal member of the deal team is on holiday.
Buying another company is a significant undertaking and you are unlikely to be able to do it on your own. Use the skills that you have in your team and don’t be shy to bring in qualified advisers to support you. The sooner you unite this team with a robust plan, the sooner you will make progress.