Frequently Asked Questions


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For private business owners, the decision to sell their business is probably the most important economic decision they will make.  It’s also frequently gut-wrenching. Your client has undoubtedly devoted a large part of their adult life to building the business, and the decision to let go was not an easy one.  Now your client has come to you for guidance.  As you consider how to advise your client, there is a fundamental decision to be made—should my client hire an investment banker, or are we capable of handling it alone?  In this situation, there are three basic questions for you to answer:

  1. Do we need an investment banker on the deal team?
  2. If we decide we need one, how do we go about selecting the right one for my client?
  3. After we’ve selected one, how do I work with them to maximize their effectiveness?

Here, we will address the first question—how do you evaluate whether to hire an investment banker to manage the sale process versus handling it for your client?  Following is a list of questions you can ask yourself to help make this determination.

  1. How many businesses have I sold?  Typically advisors and business owners have been involved in few, if any, sale transactions. The buyers, however, are likely to have a lot of experience, putting the advisor and business owner at a significant disadvantage if you do not have an investment banker on the deal team.
  2. Do I have the time? The sale process is enormously time-consuming.  Your client will be focused on the short-term performance of the company, which takes on a heightened level of importance since the current performance of the company is under a microscope by potential buyers.
  3. Is there an opportunity cost for my client and my client’s company if we sell without an investment banker on the deal team?  The sale process will be time-consuming, emotional, and frustrating for your client, making it more difficult to stay focused on the most important thing—managing current performance.
  4. Do I know what my client’s business is worth?
    • To a strategic buyer – a public or private operating company that will buy a company based on the value they perceive in the combined future of the companies.
    • To a financial buyer – private equity groups (“PEG”) that raise investment funds to buy, grow, and sell companies in a relatively short period of time with a planned exit.
    • PEGs may also be strategic buyers because they own and operate a company or “platform” that will acquire complementary “add-on” companies.

A buyer will want to understand past performance and your client’s view of the future. The value of the company can vary dramatically to different potential buyers, depending on how well it fits into their current operation, and what they think they can do to positively impact sales or reduce expenses.  An investment banker can provide objective advice based on years of experience concerning the range of likely sales prices and the things an owner can do to positively affect the value of his business.

Do I know how to maximize the value of my client’s business in advance of a sale?

  • Every dollar of improvement to earnings is worth a multiple in a sale. The company’s financial statements should be clean and understandable to buyers so that a minimal amount of adjustments are necessary to reflect the true earnings of the company.  You should consider having audited financial statements and minimizing the amount of “personal” expenses that are run through the company. It is usually best for an owner to start planning for a sale one to three years in advance so that any changes to the operations have been fully implemented and are reflected in the financial statements.

Do I fully understand my client’s options?

  • Strategic buyer
  • Private equity
  • Management buyout
  • ESOP
    • Each category of potential buyers presents various advantages and disadvantages.  Additionally, for privately owned companies there are both quantitative and qualitative factors that are involved in selecting the optimum course.  For example, is the owner leaving or does he want to stay?  If so, for how long? Is there a successor manager to the owner? Will the business be re-located? Will the name change? What happens to the employees? The list goes on and on.

Do I or my client know who the buyers are?

  • Do we know who to contact?
  • Do we know how to approach them?
  • Do we know how to get their attention?
  • Do we know how to screen them?
    • A seller of a business is competing for capital along with the other options that potential buyers are considering.  It’s a big world and there are always a lot of companies for sale. Experienced buyers are excellent at generating deal flow and typically have a well-defined acquisition process of their own.  Unless you have the experience to look at your client’s company through the buyer’s eyes so that you understand their hot buttons and can position your client’s company accordingly, you are operating at a significant disadvantage. Often, sellers are not able to get potential buyers to even consider their company.

Do I have prior experience in negotiating sale transactions?

  • The various options for structuring a sale are almost endless. The implications of a stock sale or an asset sale can be significant from tax, post-transaction liability issues, and others.  The payment your client receives in a transaction can include cash, notes, stock, and earn-outs (additional payments based on future performance).  Negotiating the proper amount of working capital in the business at the time of sale is always tricky.  The representations and warranties your client will have to give are an extremely important part of the transaction. Your client may own a building personally that is leased to the company. A buyer will likely want non-compete agreements from your client as well as from key employees.  These items and many others have to be thoughtfully considered, evaluated, and negotiated.
  • In many cases, sellers have found out the hard way that warranties and representations, escrow funds, and other deal provisions can have severe repercussions after the transaction is closed.  If these provisions are well negotiated, they have discovered that they have to give part of the money they received back to the buyer either directly or through giving up part of escrowed funds.  Experienced investment bankers can help ensure that the deal you think your client got is the one your client actually got.
  • Almost all of the good potential buyers for your client’s company will have many transactions worth of experience.  We recently sold a company to a private equity group, and it was the group’s 186th transaction.  They knew the process and all of the tricks.  An experienced investment banking firm helps level the playing field for you.

Do I have the ability to represent my client’s company fairly and objectively?

  • Will a buyer trust me to be completely objective about my client’s company?
  • Do I really think I can maximize value for my client if I’m the point person on the negotiation as opposed to utilizing a third party to represent my client?
  • Experienced buyers typically would rather deal with an experienced third-party negotiator than an inexperienced owner-negotiator. There are always difficult issues to be addressed.  If your client is the point person on the negotiations and will be remaining with the company post-closing, heated negotiations can have a long-lasting impact on the future relationship.

Do I know how to manage the process?

  • Can I create a compelling selling document?
  • Do I have the ability to evaluate competing proposals with varying terms?
  • Am I confident I could help my client select the best buyer for the right reasons?
  • Have I managed a due diligence process before?
  • Do I know what a virtual data room is, and I have I used one?
  • Can I get the deal over the finish line?
  • Do I know how to coordinate my client’s attorney, accountant, insurance advisor, wealth manager, and other advisors during the sale to optimize results?
    • Even an efficiently run process can take a minimum of six months to a year. The process, from initial contact, negotiation of confidentiality agreements, gathering of due diligence information, arranging meetings, answering questions, selecting the buyer, and negotiating documents can involve dozens of meetings, hundreds of phone calls, and thousands of emails.  Are you confident that you know the process, can manage it effectively, and serve your client’s best interests during the sale process?
    • An investment banker also plays the role of team coordinator.  You will have a number of professionals working on the transaction with you, such as your client’s attorney, accountant, insurance advisor, wealth manager, and others.  How a transaction is structured, say, either as a stock or asset transaction, can affect your legal risk, tax implications, and long term investment strategy.  An experienced investment banker will make sure all of your advisors communicate during the transaction so that you don’t have any negative surprises afterwards.

Can I handle the stress?

  • There is a saying in the investment banking business that “Every deal dies three times.”  Managing a sales process to completion is like running an obstacle course. If you have limited, or no, experience in dealing with the obstacles inherent in a sales transaction and overcoming them, it is difficult, if not impossible, to keep your bearings and make it over the finish line with an optimal outcome.  Without experience and the objectivity that comes with it, it can be easy to overreact to some potential obstacles and be oblivious to other ones that could be potential disasters.  Even experienced mountain climbers use guides to get to the peak of Mt. Everest because they recognize the value of having someone they can rely on that knows the route to success.


We believe that business owners should view the benefits of using an investment banker as an investment and not an expense. Your client values your specialized knowledge, objective advice, and depth of experience, and will value ours as we you and your client have not developed in the course of your  Independent studies have shown that the ultimate purchase price realized by companies that used an investment banker significantly exceeded their cost. In a recent study by Mercer Capital, the analysis revealed that the pricing multiples received by sellers that retained a transaction advisor were 20% higher than those who took the For Sale by Owner (FSBO) approach. Further, the peace of mind that comes with knowing you have another experienced, trusted advisor who is looking out for your client’s best interests, and providing honest, objective advice along the way during the most significant transaction most owners will ever experience is invaluable.

  1. Senior advisors with decades of transaction experience.
  2. Local Presence. Global Reach.
  3. We live the middle market.
  4. Proven track record.
  5. Quality and reach of a big firm, with the personal touch of a boutique.
  6. Record of trust.

Senior advisors with decades of transaction experience.

  • Our team consists of sixteen highly experienced senior advisors and a full staff of highly experienced analysts.  Our senior advisors have decades of on-point experience across many transactions in many industries.  Industries are different and each company has its own unique characteristics, but the underlying considerations are ultimately similar.  In the end, your client wants the best combination of the highest price possible given the level of risk your client is comfortable taking.  Our clients benefit from the hands-on leadership of our senior advisors who have been responsible for transactions representing $19 billion in aggregate value.

Local Presence. Global Reach.

  • We have an extensive network of buyers and sellers that we know and communicate with on a regular basis. We also have excellent research capability to comprehensively identify buyers and sellers in addition to the industry players you may already know. There are also hundreds of private equity groups (or “financial buyers”) that are continually looking for good acquisition candidates.
  • In selecting an M&A firm, we strongly recommend looking at their record of national and international record and transactions. It’s one thing to say you have the reach. It’s another to have the record to demonstrate it.
  • Heritage is a founding member of M&A International Inc., now Oaklins International with offices worldwide. We have 800 dealmakers in 60 offices in 40 countries on every continent except Antarctica.  This gives you national and global reach and resources.  Heritage’s offices are located in northeast Florida, but our operating range extends across the U. S. and around the world.  We have advised clients in buying or selling companies throughout the U.S., Europe, and Asia.  We communicate daily with our colleague firms keeping us up to the minute on market and transaction trends in every economic area of the world.
  • As an example of our international reach, Heritage recently completed a very large and successful transaction involving three continents.  We sold our client’s U.S. company to a well known publicly traded European company and its subsidiary in Asia.  We can bring this reach to your transaction.

We live the middle market.

  • We are not just advisors or “deal makers”.  Our principals have been business owners, business executives for companies up to the NYSE, board members of public and private companies, and have advised many business owners in buying companies, selling companies, improving their companies, and solving problems.  In achieving this goal, there is no substitute for experience.  We know the decisions your client faces as a business owner.  We have been there, and we know what your client is going through.  We can be a valuable part of your team.

Proven Track Record.

  • Heritage has a long track record of providing excellent service and has served clients for over 42 years. Our business is a relationship business, and our deals primarily come from referrals. Longevity alone is not a qualification, but, when it is coupled with the successful experience of hundreds of clients over decades, it speaks for itself.

The quality and reach of a big firm, with the personal touch of a boutique.

  • Our senior advisors have extensive experience as officers and advisors for Fortune 500 and NYSE companies as well as other companies of all sizes.  Our principals have handled transactions with values from $1 million up to a transaction value of $1.1 billion.  We have successfully negotiated transactions across the table from some of the largest investment banks and companies in the world.  And we bring this experience to your client.
  • With Heritage, your client gets the benefit of this experience because our senior advisors work with you and your client every step of the way.  Too often, we see large investment banks send inexperienced senior personnel to make pitches to a business owner to “seal the deal.” Once the deal is signed, more often than not, they send in a much less experienced person to work the deal to completion. With Heritage, what you see is what you get. The people you talk to at the beginning of the process are the people who will work with you during the entire process. These same people will be at the negotiating table with you.  With us, you get financial center investment banking quality with the personal touch and service of a boutique. Our people were here yesterday, and they will be here tomorrow. And we take pride in our availability and accessibility.

Record of trust.

  • Heritage has been in business for 42 years and has hundreds of current and former clients, many of whom have become personal friends.  Clients trust us with their most important business and personal information.  They also ask us to handle the most important economic transactions and projects of their lives, many times over a period of years.  The reason they keep entrusting us with these critical tasks is that they have come to trust us through personal experience.  Our clients tell our story best.  We would be pleased to provide you with contact information so that you can speak with some of our former clients directly.

Smart thinking.  One of the biggest mistakes we see business owners make is not properly preparing to sell their company.  Too often, the triggering event is a call from another company expressing interest, a negative health issue, or some other similar happening.  If your client isn’t prepared, your client is probably going to leave money on the table and end up with a much riskier transaction.

And your client can’t start too early.  A good exit plan will be flexible and lay out the path to sell your client’s company in the next year, the next five years, or the next ten years.  A well thought out and executed exit plan is one of the most profitable processes your client can go through.  There are only three steps, but they’re all critical:

Step One: Prepare a Plan

In this step, your client will develop a plan with the exit advisor that motivates your client to make sure your client has an excellent team of professionals in place, some of which your client probably already has, and some your client needs to get on board. Your client may already have a good accountant and attorney, but not a financial planner/wealth manager or insurance professional.  The planning stage of an exit plan leads your client through putting the right team in place.

Step one also includes a valuation of your client’s company.  What’s it worth now, and is that enough to get where your client wants to be financially if the company is sold? The valuation process also will help identify opportunities to take steps to increase the value of the company.  The great result of this is that your client gets the benefits whether they decide to sell now or keep the company for 20 years.

Step Two: Execution of the Plan

Your client has developed a plan, but it’s critical to execute it.  The best plan in the world is useless if it’s not well executed.  Execution involves doing all the things your client identified in step one to increase the value of the company.  Examples of these are:

  • Making sure the company has capable management who can manage the company after your client has sold
  • Expanding the company’s  product or service line to increase revenue and profitability
  • Analyze the company’s inventory to make sure your client is not missing an opportunity to reduce his/her investment in it without hurting sales
  • Many, many others

Step Three: Selling Your Client’s Company

Selling a company under any circumstances is going to be a stressful process.  Designing and executing a great exit plan can make it much less stressful while maximizing your client’s opportunity to get the best price with the least amount of risk.

Heritage has a clear and thorough exit planning process that we use to help guide our clients through this critical process.

This is a simple question with a complex answer.  Our first question we would ask you is, “Under what conditions, and to whom?”

The first question, “Under what conditions?”, is critical in developing a valuation scenario.  Is it the value as the company is run today, how it could be if your client made changes such as removing personal assets (boats, condominiums, airplanes) from the company?  Are there any family members on the payroll who are not necessarily performing commensurate services?  What would it be worth if a buyer owns it?  And there are a lot of other conditions.

A simplified way to estimate the value of a company is to first calculate what is commonly called “adjusted EBITDA.”  EBITDA is “earnings before interest, taxes, depreciation, and amortization.”  Start with the number on your income statement that appears after deducting normal operating expenses, adding back depreciation (and amortization, if you have it).  If, for some reason, interest has also been deducted, add it back as well.

Next, identify expenses that you don’t think a third party owner would let your client continue.  For example, if your client has a cousin on the payroll purely as an act of kindness, and he doesn’t contribute to the company, add his salary and benefits back.  Do this for all reasonable “add-backs.”  The result is “adjusted EBITDA.”

Then, you have to multiply adjusted EBITDA by an appropriate multiple, and here is where it gets more complex.  Multiples vary greatly based on a number of factors, such as the industry your client is in, the company’s growth rate, general economic conditions, and how well a transaction is negotiated on your client’s behalf.  For example, in the logistics industry, a distribution company that simply brings goods in the back door, and ships them out of the front door could sell for an EBITDA multiple as low as 3.5X.

A value-added distributor that has a highly attractive product line, that does sub-assemblies or provides other specialty services, or that is run extremely well, could sell for a multiple of  6.0X, or even higher.  Thus, two companies each making $5 mm in adjusted EBITDA could sell for a range of values of $17.0 million to $30 million.

Also, EBITDA multiples estimate what is called “enterprise value.” The number your client is ultimately interested in is “equity value,” or the value of your client’s equity interest in the company. Enterprise value is the total value of the company before subtracting the amount of interest-bearing debt the company has, and equity value is the value after subtracting interest-bearing debt. Equity value is the amount your client would receive if the company were sold.

The easiest way to think of this is with your house. Let’s say your house is worth $1 million, and you have a mortgage of $600k. The enterprise value of your house is $1 million, and the equity value is $400k ($1 million – $600 k).

Other types of companies such as technology companies, medical device manufacturers, or pharmaceutical companies could sell for EBITDA multiples of 10X, or much higher in some instances. So the ultimate answer to the question is “It depends.” Contrary to what you may hear, there is no simple rule of thumb, even within an industry. Beware of those who tell you your client’s company is worth X times EBITDA without doing a thorough analysis.

Heritage builds detailed financial models of our clients’ businesses using a valuation method called “discounted cash flow” (DCF) and our own proprietary software. DCF is specific, and takes into account the individual nature of your company. We also look at the value of the company as your client operate it currently, what it could be worth if your client make changes to increase profitability, and what it’s likely to be worth to a buyer. For example, a strategic buyer may be able to cut out duplicate expenses, increase sales growth because of additional marketing resources, buy raw materials more cheaply that your client can. All of these factors, and many others, can make your client’s company worth more to a buyer than it is to your client currently. We calculate the possible value to a buyer, so that your client will be in a stronger negotiating position. This is a hidden value in your client’s business, and we use this information when we’re negotiating on your client’s behalf with buyers to achieve a better price.

We also look in depth at other, similar transactions that have taken place in the market recently to corroborate the values we develop using DCF. Since all businesses have their own unique combination of characteristics, finding nearly identical comparable transactions is difficult, but they add insight and reason to the process. The result is a comprehensive, reliable value based on the specifics and reality of your client’s company.

For most of our clients, selling their business is a once in a lifetime event and the single most important economic transaction of their business career. The sale process is complex with many steps, twists, turns, and pitfalls. Even if a business owner has sold a company before, it’s probably been once or twice.

There are two keys to a successful sale, planning and execution. Planning for the sale with an experienced advisor lets your client look at his/her company objectively as buyers will. We can determine what the business is worth to your client, and what it’s likely to be worth to a buyer. These two values can be significantly different. Preparation also lets us together fully identify who the best buyers may be. In some cases, our clients know of a potential buyer before the sale process begins. However, many times, they don’t. One of the major advantages we bring to our clients is identifying a large number of qualified buyers. Even if your client has identified potential buyers, creating a competitive bidding process almost always improves the net economic result.

In the mergers and acquisition world, buyers are divided into two general groups, strategic buyers and private equity (or financial) buyers. Strategic buyers are ones that are already in your client’s industry and are looking for acquisitions. Private equity buyers are funds that have raised capital to invest in companies like your client’s. For most of our clients, both types of buyers are good candidates to buy the company. Often our clients know of a potential strategic buyer. However, they usually don’t know of any private equity buyers. There’s a myth that strategic buyers pay higher prices, but that simply is not universally true. Your client should consider both types of buyers, and preparing lets your client identify a much larger pool of potential buyers. That increases the competition, and the price, of the company.

Preparing also let’s your client identify and gather the information that needs to be ready to respond to the extensive requests your client will inevitably get. This speeds the sale process, because you and your client can respond quickly to requests, saving time and effort during the process.

Being prepared also lets your client make changes and adjustments that will make the company more attractive. Even if your client decides to not sell, this will increase the profitability of your client’s company, and its value to your client.

In summary, the sale process can be chaotic and hectic, or it can run smoothly. Like all of the actions your client’s business takes, it all depends on developing and executing a good plan.

In many ways, it’s harder to buy a company than it is to sell. Owners of companies can take time to plan their exit and get ready to sell. They’ve owned the company for years, sometimes decades, and they know where the skeletons are buried. Buyers have to find them.

Buyers are often presented with an opportunity and have to act quickly, or, at least, they think they’ve got to act quickly. This means many times that screening the company is rushed, negotiations are rushed, and due diligence is rushed. The hallmark of these dangerous conditions is generally described by companies’ saying, “We’re opportunistic.” Or, said another way, “We don’t have a plan.”

They don’t proactively develop a plan, and then go out and look for acquisitions.  The results frequently reflect the lack of planning.  It happens all too often.

Developing a methodical, well thought out, comprehensive acquisition plan is critical for increasing your client’s odds of not missing a good opportunity, or, worse, acquiring a bad opportunity.  Everyone has heard “Ready, Aim, Fire.”   That’s good advice.  In acquisitions, it translates to “Plan, Search, Acquire.”

There’s no substitute for a good plan.  Dwight Eisenhower said, “In preparing for battle, I have always found that plans are useless, but planning is indispensable.”  He didn’t mean that it’s no use to plan.  Just the opposite.  What he meant was, when the battle starts, the well laid out plans you made are not going to go exactly as you thought they would when you laid them out.  But the more prepared you, your client, and your client’s people are, the better able you are to react to, and successfully handle, both expected and unexpected events.

Executing an acquisition plan, including unexpected situations, is difficult to handle.  But the better and more thorough your client’s plan is, the more likely your client is to be successful.

The steps to successful acquisitions:

  1. Plan:  “Executing a plan knowing how to invade a country.  Planning is deciding which country to invade.”   You and your client have to know how to execute an acquisition, but, more importantly, your client has to identify the right companies to target.  It doesn’t matter if you execute the acquisition flawlessly if your client has selected the wrong target.  There’s no substitute for developing a comprehensive, rational strategy to determine the ideal characteristics your client is looking for in an acquisition candidate.
  2. Search:  Now you and your client developed a strategy, so you’re ahead of most of your peers.  Next, search for targets.  Given the market niches, geography, product lines, and other characteristics your client has identified, where are the targets?  Some are going to be your client’s competitors, some are going to be companies your client has known for years, and some are going to be companies you and your client have never heard of.  Potential sources of candidates are:
    • Your client and your client’s personnel who are in the market every day, and who know competitors and other industry players;
    • industry trade associations, commercial databases, or similar sources ; and
    • the networks of your client’s advisors, such as Heritage, or any other contacts you and your client have.
    • The key is to make the search as all-inclusive as possible.  Our experience is that you can never be sure where ideas are going to originate.  Kiss as many frogs as you have to, so you can find that beautiful princess or handsome prince.  A good plan and a targeted search limit your frog kissing to the minimum.  It’s less unpleasant, less risky, and less expensive.
  3. Acquire:  As mentioned above, the acquisition process is difficult, but, if you and your client have done a good job on the first two steps, the third step, “acquire,” is easier.  Not easy, just easier.  There are still many steps to successfully negotiate after your client has identified targets.  Someone has to approach the target(s) to gauge the level of interest in selling, performing preliminary screens of information to make sure the target generally fits the acquisition criteria, getting a letter of intent in place so preliminary due diligence can be conducted, negotiating transaction terms that are acceptable to both sides, finishing in-depth due diligence, and getting the deal closed.

Successful acquisitions also include post-transaction integration.  First, there has to be managerial bandwidth to assimilate the acquired company.  Since most companies operate pretty tightly, they don’t have a lot of excess management time available to integrate an acquisition and deal with the numerous associated issues.  Additionally, integrating an acquisition requires different skills and experience than normal day-to-day management.  All of these issues should be addressed in both the planning and execution phases of an acquisition process, and in having the right human resources in place prior to the acquisition to move quickly and effectively immediately after closing.

A large percentage of acquisitions ultimately don’t work.  Our experience is that this is primarily because of insufficient planning, poor execution, and inadequate integration.  Going through the “plan, search, acquire” steps doesn’t assure success, but Heritage’s long history and success in helping clients can sure move the odds in your favor.

(*All fees are for example only.  Fees for a specific assignment will vary with the assignment.)

We always like to make the point that our services don’t cost, they pay. If you don’t think any professional service is going to return to you more than their services cost, you shouldn’t hire the professional. In case after case, we can share with you examples of how we earned, or in many cases saved, our clients many times more that the amount of our fees. We are, in fact, a profit center, not a cost center.

That being said, the cost of our services depends on the service we provide. For our consulting services and depending on the service you would like, for some projects, such as a valuation, we work on a fixed fee basis. For other services, such as a longer term consulting project, say, for value enhancement, we work on a monthly retainer or hourly basis. The amount of the fees, of course, depends on the amount of service we are providing.

For selling your company, our fees are primarily a contingency based percentage of the total sale price with a modest retainer. For example, our fees could be 3.5% of the transaction price with a retainer of $5,000 per month for six months. The retainer would be offset against our fee when the transaction is completed, so it doesn’t cost you any additional fee. If the transaction is not completed for some reason, say, you just decide you don’t want to sell your company, the retainer would be non-refundable.

We also use a concept called “Target Sale Price.” Going further with the example above, one of the first activities we will complete if you engage us to sell your company is a valuation. Assume that after we complete the valuation, you and we agree that the high end of the range of values of your company is $20 million. In this situation, our fee might be structured as 3.5% of transaction value up to $20 mm (the “Target Sale Price”,) and a slightly higher percentage, say 5%, above $20 million. The higher percentage would only apply to the amount over $20 million. This way, we both have the same incentive, and that is to get the highest possible price for your company, at an acceptable level of risk for you.

Buy side assignment fees are structure slightly differently, and can have a number of variations. The most common way is a monthly retainer with a fixed success fee at the completion of an acquisition. For example, a buyer side assignment could have a $10,000 monthly retainer with a $100,000 success fee. The success fee would only be earned by us when a transaction is closed for you.

If you are looking for potential acquisitions of varying sizes, the success fee will vary as well. For example, the $100,000 success fee above could be for transactions up to $5 mm. For transactions $5 million-$10 million, the success fee could be $150,000. For transactions, $10 million-$15 million, it could be $200,000. And so on.

Our fees are tailored to the transaction, and we will be happy to discuss them with you based on your specific needs.

Investment bankers and business brokers have some similarities in that each handles buy or sell transactions on behalf of clients, but they are distinctly different.  Each performs valuable services to their clients, but they generally occupy different niches in the business transaction and advisory world.

Range of Services

Let’s start with what investment bankers and business brokers are based on the services they provide. Middle market investment bankers that specialize in mergers, acquisitions, and related activities, such as Heritage, provide a number of services. These include advising clients in selling a company, buying a company, raising debt or equity funds, strategic and financial consulting, value enhancement, valuations, and reorganization and restructuring. Visit our Services page to learn more

While there are exceptions, business brokers generally offer a more limited range of services. These are generally finding buyers for sellers and sellers for buyers. Some brokers offer other services, but usually on a limited basis.

Transaction Size

Another difference between investment bankers and business brokers is the size of the transactions they execute. Business brokers are generally involved in smaller transactions. Although it can vary, brokers usually handle transactions with total values of less than $3 million, and many handle much smaller deals. Investment bankers usually handle transactions of $5 million, or more. Heritage’s transaction size ranges generally from $10-$200 million. Our senior advisors have experience in handling many deals of this size, and, in some cases, much larger.

Corporate vs. Individual Buyers

Investment bankers usually work in situations in which the buyer is a corporation, not an individual. Buyers in business brokerage transactions are much more likely to be individuals, although there are exceptions.


Investment bankers are usually licensed to handle both stock sales and asset sales. Stock sales are those in which equity securities of the seller are sold to a buyer. Asset transactions are those in which the selling company sells its assets to a buyer, but not the stock of the corporate entity that owns the assets.

Heritage is licensed by the Financial Industry Regulatory Authority (FINRA). Companies such as ours have to be FINRA registered to legally handle stock transactions and to raise equity capital. State regulations vary, but in Florida, where we’re based, FINRA registered investment bankers can also handle asset transactions.

Depending on the state, business brokers may be licensed as real estate brokers, such as in Florida. In other states, the licensing requirements are different. Business brokers are not usually licensed to handle stock transactions or to raise equity capital. There are generally substantial penalties and sanctions for companies who advise on stock transactions without proper licensing. For example, in Florida, a company raising equity capital using a non-licensed agent, can be subject to recession of the transaction for two years. That is, under some conditions if the transaction does not go well, the company may have to return the money raised from investors. Not only that, but the officers of the company may be held personally liable as well.

Fiduciary Duty

Business brokers generally “represent the transaction,” and not a specific client. They owe a duty of fair dealing to both the buyer and the seller, but don’t have a fiduciary duty to look out for the best interest of either.

Investment bankers usually represent a client. They do have a fiduciary duty to look out for their client’s best interest, but also have a duty to deal fairly with the other party to the transaction. This is a major difference.

Analytical Staff

Investment bankers usually have experienced analysts on staff to perform analyses of their clients’ companies as well as carry out many other duties. Depending on the size of the transactions they typically handle, business brokers may or may not have dedicated analytical staff.

In summary, both investment bankers and business brokers perform valuable services in their market niches. However, there are substantial differences in the markets served by each, and the services provided by each. If you have a smaller company that is likely to be bought by an individual, a business broker may fit your needs. If you have a company that you think is worth $10 million or more, and you would like for your advisor to represent only you in a transaction, an investment banker, such as Heritage, will be your best choice.

Your client created his/her business to deliver a service or product to customers. As your client’s business developed, your client and his/her team implemented processes and procedures designed to manage performance, ensure quality, and enhance profitability. Over time, the day-to-day management of the business requires more of your client’s and your client’s team’s time and focus. As a result, less time and attention is given to strategic management.

Seeing the Forest for the Trees

As an owner, your client has expectations for the performance of his/her business. For a variety of reasons, these expectations aren’t always met.

  • Perhaps, your client’s company isn’t as profitable as your client knows it can be.
  • Your client finds that customers are complaining about quality or on-time performance.
  • Your client’s company consistently struggles with cash flow issues.
  • Sales are flat or, worse, declining.

Not meeting expectations requires analysis to determine why. However, the day-to-day demands of business owners and their management teams allow little time for such analysis. This is when a qualified third party provides real value with strategic consulting.

Strategic Consulting – How it Starts

It begins with a conversation. With no obligation other than to share your client’s concern, you client will meet with the Heritage team to talk about personal and business goals and what your client is seeing in the performance of the company. We will ask questions to improve our understanding of your client’s business and the situations your client is facing.

Often, our clients are surprised at the insight we have into their business and experiences. While your client’s business is unique, some company, somewhere, shares experiences similar to your client’s. Chances are good that the Heritage team has encountered or dealt with a similar issue. We conclude the conversation by mutually answering the question, “Can Heritage Capital Group help you with strategic consulting?” Because of the depth and breadth of our team, most times the answer is, “yes!” And in the rare instances when we don’t believe we are qualified to help, we can lean on our extensive network to find someone who can.

Strategic Consulting – The Process

Once we’ve agreed to work to help your client realize the business your client has envisioned, we will begin to work directly with your client and your client’s team to quickly and efficiently get to the ultimate causes of the issues your client is experiencing with his/her company. We will constantly review our findings with your client and give recommendations rooted in analytics. Our goal is to provide immediate and significant impact. Our strategic consulting assignments typically involve one or more of the following:

  1. Modeling the financials of the company to determine the value drivers, identify opportunities for cost reductions or efficiencies, and understand the expected cash flows.
  2. A review of capital structure, banking agreements, and other funding resources to understand opportunities to improve the value of owner equity and ensure growth plans are sustainable.
  3. A review of operations, including established metrics, to determine how the company is performing in relation to expectations and determine how to improve performance to increase sales, profitability, and customer satisfaction.
  4. An examination of the organizations’ structure, to include human resources, to determine opportunities to improve accountability, strengthen the management team, and create clear and responsive reporting.

How we charge for strategic consulting

For some of our consulting services, depending on the service your client requires, we work on a fixed fee basis.  For a longer term consulting project, say, for value enhancement, we work on a monthly retainer or hourly basis.  The amount of the fees, of course, depends on the amount of service we are providing.

How we deliver results

The Heritage team includes former CEOs, former CFOs, business owners, and experienced analysts. We’ve provided perspective and sound judgment to clients in a wide variety of business types across a wide variety of industries across the U.S. and around the world. We employ all of the assets within the Heritage team to ensure we are providing the best advice to meet your needs. While you may engage primarily with one or two Heritage team members during the course of your assignment, the full team of our experienced principals and analysts is available to assist.

Heritage Capital’s Goal

Our strategic consulting services improve the value of the companies we serve. Our goal is to join you as one of your client’s trusted advisors. We know that trust is earned. We want to earn your trust by demonstrating the value we can provide through strategic consulting.

The process of selling your client’s business has a number of steps and can vary depending on the specific circumstances.  However, all sale transactions have the same basic steps.

A. The first step is to get the agreement between your client and your client’s investment banker in place.  This agreement will outline the elements between your client and your client’s investment banker, primarily duties and fees.  (See the question above on fees). This step should take one to two weeks.

B. The second step is preparing for the sale process by gathering the information buyers will likely request into what is called a “virtual data room,” or “VDR.”  Gathering as much data as possible before the process starts will have two major benefits.  First, your client, your client’s internal personnel, and your client’s advisors will have time to put the information together in good form without being under the pressure of the sale in process.  This allows accuracy and completeness.  Secondly, buyers will inevitably request information that was not gathered before the process began, either in content or in form.  Having a large part of the information your client knows will be requested already assembled allows more time during the process for the new information requests.  This means your client is more prepared, and this gives buyers comfort that your client and your client’s team anticipate issues before they occur.  This step normally takes 30-90 days.

C. The third step, which will to some extent overlap the second step, is to analyze and value your client’s business.  It’s critical to have a thorough financial and operational analysis of your client’s business prepared before your client goes to market.  In this step, your client’s investment banker will identify valid adjustments to your client’s financial statements that will increase the value of your client’s company in a buyer’s eyes.  For example, if your client has discretionary expenses that a buyer would not continue, they should be adjusted out of the income statement, thus increasing the profitability and the value of your client’s company.  Also, your client may have too much inventory on hand.  The financial analysis will identify this so your client can reduce inventory without affecting operations.  This has the double advantage of allowing your client to free up cash from the inventory reduction and appear to be more efficient to a buyer.

The valuation should also analyze what your client’s company would be worth if it were operated by a buyer. For example, a buyer may be able to eliminate duplicate expenses, such as accounting system costs, making your client’s business more attractive. Another example is buying power. A large buyer may get better economies of scale from larger purchases. This will reduce the costs of operating your client’s business to them, again making your client’s company more attractive and valuable.

This step should take 30 to 60 days, or so, but because of the overlap with step two, will add 15 to 30 days to the process.

D. The fourth step is identifying, preparing marketing documents, and contacting potential buyers.  Your investment banker will work with your client to identify potential buyers that your client knows, as well as conduct a search to identify other candidates that your client may not know.  There could be many good potential buyers, both strategic companies already in your client’s industry, or private equity groups (financial buyers) that your client may not know.  This step should take 30 days.

E. The fifth step is communicating with potential buyers, providing additional information they may request, receiving and screening offers, and selecting a final candidate (or candidates). This step will also involve management phone calls and site visits by final candidates. The last action in this step is selecting a final candidate, signing a letter of intent (LOI), and beginning final due diligence. This step normally takes 45 to 60 days.

F. The sixth step is due diligence. In this step, the buyer conducts its investigation to confirm its preliminary evaluation of the company and finalize the transaction. If preparation for this step has been thorough and accurate, due diligence, while rigorous, should go smoothly. Problems arise if buyers find that information they have been previously provided is not correct. If that occurs, the preliminary terms of the transaction contained in the LOI could be altered, or, in the worst case, the transaction could be delayed or terminated. This means that thorough preparation for the transaction is critical. It’s very difficult to favorably resolve significant problems that are brought to light during due diligence.

Typically and depending on the type of companies involved, buyers will conduct due diligence in several areas: financial, legal and regulatory, information technology, human resources, and insurance. The buyer itself may handle some areas, and engage outside consultants for others.

This step normally takes 45 to 75 days, or longer in some cases due to regulatory or financing issues. Good preparation can push the process to the lower end of the range.

G. The seventh, and final, step is closing. In this step, all due diligence is completed, any necessary licensing and regulatory filings are completed, financing for the transaction (if any) is completed, and money is transferred. This step should take one or two days.

In summary, there are consistent steps to the sale process, although they can vary somewhat from case to case. The time can range from six months on the low end to ten months on the high end. The keys to a successful transaction are (1) work with deal-experienced advisors; (2) prepare and plan; (3) execute the plan; and (4) be patient when it’s required and aggressive when it’s required.