Frequently Asked Questions

Business Owners

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As a private business owner, the decision to sell your business is probably the most important economic decision you will make. It’s also frequently gut-wrenching.  You have undoubtedly devoted a large part your adult life to building the business, and the decision to let go is not an easy one.  As you consider what to do and how to go about it, there is a fundamental decision to be made—do I hire an investment banker to help me, or do I handle it myself?  In this situation, there are three basic questions for you to answer:

  1. Do I need an investment banker?
  2. If I decide I need one, how do I go about selecting the right one for me and my business?
  3. After I’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 on your own?  Following is a list of questions you can ask yourself to help make this determination.

How many businesses have I sold?

  • Typically a business owner has been involved in few, if any, sale transactions. The buyers, however, are likely to have a lot of experience, putting the business owner at a significant disadvantage if you do not have an investment banker.

Do I have the time?

The sale process is enormously time-consuming. At the same time, the short-term performance of the company takes on a heightened level of importance since the current performance of the company is under a microscope by potential buyers.

Is there an opportunity cost for me and my company if I do it myself? You will find the sale process to be time-consuming, emotional, and frustrating, making it more difficult to stay focused on the most important thing—managing current performance.

Do I know what my 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 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 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 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 know who the buyers are?

  • Do I know who to contact?
  • Do I know how to approach them?
  • Do I know how to get their attention?
  • Do I 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 own company through the buyer’s eyes so that you understand their hot buttons and can position your 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 you receive 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 you will have to give are an extremely important part of the transaction. You may own a building personally that is leased to the company. A buyer will likely want non-compete agreements from you as well as 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 you got is the one you actually got.

Almost all of the good potential buyers for your 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 company fairly and objectively?

Will a buyer trust me to be completely objective about my company?

Do I really think I can maximize value if I’m the point person on the negotiation as opposed to utilizing a third party to represent me?

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 you are 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 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 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 continue to have the time and mental energy to run your company 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 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. 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, 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 a trusted advisor who is looking out for your 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. You live the middle market.  So do we.
  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 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, you want the best combination of the highest price possible given the level of risk you are 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 investment banking firm (that’s what we’re called), 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. 

You live the middle market. So do we. 

We are not just advisors or “deal makers”.  Our principals have been business owners, business executives for companies up to the size of 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 you face as a business owner.  We have been there, and we know what you are 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 43 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.  Hear what our clients have to say…

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 you.

With Heritage, you get the benefit of this experience because our senior advisors work with you 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 you aren’t prepared, you’re probably going to leave money on the table and end up with a much riskier transaction.

And you can’t start too early.  A good exit plan will be flexible and lay out the path to sell your 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 you can go through.  There are only three steps, but they’re all critical:

Step One: Prepare a Plan

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

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

Step Two: Execution of the Plan

You have developed your 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 you identified in step one to increase the value of the company.  Examples of these are:

  • Making sure you have capable management who can manage the company after you’ve sold
  • Expanding your product or service line to increase revenue and profitability
  • Improving your processes to make operations run more smoothly and increase profitability
  • Analyze your inventory to make sure you’re not missing an opportunity to reduce your investment in it without hurting sales, and
  • Many, many others

Step Three:  Selling Your Company

Selling your 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 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 you made changes such as removing personal assets (boats, condominiums, airplanes) from the company?  Do you have 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 continue.  For example, if you have your 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 you’re in, your growth rate, general economic conditions, and how well a transaction is negotiated on your 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 an 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 $5.0 million in adjusted EBITDA could sell for a range of values of $17.5 million to $30.0 million, or more.

Also, EBITDA multiples estimate what is called “enterprise value.”  The number you’re ultimately interested in is “equity value,” or the value of your equity ownership interest in the company.  Enterprise value is the total value of your company before subtracting the amount of interest bearing debt you have, and equity value is the value after subtracting interest bearing debt.  Equity value is the amount you would receive if you sell your company.

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 $600 k.  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 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 you operate it currently, what it could be worth if you 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, or buy raw materials more cheaply that you can. All of these factors, and many others, can make your company worth more to a buyer than it is to you currently.  We calculate the possible value to a buyer, so that you will be in a stronger negotiating position.  This is a hidden value in your business, and we use this information when we’re negotiating on your behalf with buyers to achieve a better price for you.

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 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 you’ve 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 you look at your company objectively as buyers will.  We can determine what your business is worth to you, 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 you is identifying a large number of qualified buyers.  Even if you have 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 industry and are looking for acquisitions.  Private equity buyers are funds that have raised capital to invest in companies like yours.  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 many or any, private equity buyers.  There’s a myth that strategic buyers pay higher prices, but that simply is not universally true.  You should consider both types of buyers, and preparing lets you identify a much larger pool of potential buyers.  That increases the competition, and the price, of your company.


Preparing also lets you identify and gather the information you will need to be ready to respond to the extensive requests for information you will inevitably get.  This speeds the sale process, because you can respond quickly to requests, saving time and effort during the process.


Being prepared also lets you make changes and adjustments that will make your company more attractive.  Even if you decide to not sell, this will increase the profitability of your company, and the value to you.


In summary, the sale process can be chaotic and hectic, or it can run smoothly.  Like all of the actions your 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 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 there’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 and your 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.  But the better and more thorough your plan is, the more likely you are 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 have to know how to execute an acquisition, but, more importantly, you have to identify the right companies to target.  It doesn’t matter if you execute the acquisition flawlessly if you’ve selected the wrong target.  There’s no substitute for developing a comprehensive, rational strategy to determine the ideal characteristics you’re looking for in an acquisition candidate.
  2. Search:  Now you’ve 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 you’ve identified, where are the targets?  Some are going to be your competitors, some are going to be companies you’ve known for years, and some are going to be companies you’ve never heard of.  Potential sources of candidates are:

 a. You and your personnel who are in the market every day, and who know competitors and other industry players;

b. Industry trade associations, commercial databases, or similar sources ; and

c. The networks of your advisors, such as Heritage, or any other contacts you 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.

  1. Acquire:  As mentioned above, the acquisition process is difficult, but, if you’ve 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 you’ve 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 fee descriptions 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 than the amount of our fees.  We are, in fact, a profit center, not a cost center.  Please view our client testimonial videos for examples. 

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 million (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 million.  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 and situation.

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 

The first difference between investment bankers and business brokers is the range of services each offers.  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.

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

Transaction Size

Another difference in 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 $1 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-$150 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 and work with both public and private companies.  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), which used to be called the National Association of Securities Dealers (NASD).  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 rescission 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 difference 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.

Our strategic consulting services improve the value of the companies we serve. Our goal is to become your trusted advisor. We know that trust is earned. We want to earn your trust by demonstrating the value we can provide through strategic consulting. 

You created your business to deliver a service or product to your customers. As your business developed, you and your 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 and your team’s time and focus. As a result, less time and attention are given to strategic management.

Seeing the Forest for the Trees 

As an owner, you have expectations for the performance of your business. For a variety of reasons, these expectations aren’t always met.

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

Not meeting expectations requires analysis to determine why. However, the day-to-day demands on you and your management teams allow little time for this 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 concern, you will meet with the Heritage team to talk about your personal and business goals and what you are seeing in the performance of your company. We will ask questions to improve our understanding of your business and the situations you are facing.

Often, our clients are surprised at the insight we have into their business and experiences. While your business is unique to you, some company, somewhere, shares experiences similar to yours. 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, in most cases the answer is, “Yes!” And in the rare instances when we don’t believe we are qualified to help, we can draw on our extensive network to find someone who can.

Strategic Consulting – The Process 

Once we’ve agreed to work to help you realize the business you’ve envisioned, we will begin to work directly with you and your team to quickly and efficiently get to the ultimate causes of the issues you are experiencing with your company. We will constantly review our findings with you 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 organization’s structure, including 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 you require, 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 and your needs.

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 become your trusted advisor, and we know that trust is earned. We want to earn your trust by demonstrating the value and results we can provide through strategic consulting.

The process of selling your 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 you and your advisor, or investment banker, in place.  This agreement will outline the elements between you and your advisor, 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, you, your internal personnel, and your advisors will have time to put the information together in good form without being under the pressure of the sale 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 you know will be requested already assembled allows more time during the process for the new information requests.  This means you are more prepared, and this gives buyers comfort that you and your 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 business.  It’s critical to have a thorough financial and operational analysis of your business prepared before you go to market.  In this step, your investment banker will identify valid adjustments to your financial statements that will increase the value of your company in a buyer’s eyes.  For example, if you have 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 company.  Also, you may have too much inventory on hand.  The financial analysis will identify this so you can reduce inventory without affecting operations.  This has the double advantage of allowing you to free up cash from the inventory reduction and appearing to be more efficient to a buyer. 

The valuation should also analyze what your 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 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 business to them, again making you 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 you to identify potential buyers that you know as well as conduct a search to identify other candidates that you may not know.  There could be many good potential buyers, both strategic companies already in your industry, or private equity groups (financial buyers) that you 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.  In this stage, or earlier, discussions should begin on deal structure, such as whether the transaction is going to be an asset sale or stock sale and what the key terms will be.  These issues have major tax, economic, and risk implications, and it’s better to discuss them earlier rather than later.  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.

If you as the seller are going to keep an ownership position in your business or the acquiring company going forward (commonly called a “carried interest,” or “carry,” your advisors will conduct due diligence on the buyer as well.  This is important in establishing what ownership percentage of the operations you will have after the transaction is closed, as well as other major transaction, management, and operational issues.

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 your plan; and (4)  be patient when it’s required and aggressive when it’s required.

Raising capital either by borrowing using debt or by selling additional equity in your business can be a difficult task.  However, you can do it if it’s the right situation, and it can be a great way to grow your business under the right circumstances.  Here are some of issues you should address 

What you should know before you start 

Know Why You Want to Raise Capital –  What is your driving need, and what is the risk profile of your business before, and after, you raise the capital you need?  Have you laid out different budget scenarios that give a range for the amount you may need?  Have you done everything possible to generate the capital internally before going to the markets?

Know Your Business –  You should have a clear understanding of the daily metrics that drive your business beyond simply the reported financial numbers.  Operating factors, such as production, costs, marketing effectiveness, drive these numbers and create value, and you must be able to demonstrate the cause-and-effect chain of how these factors drive value.  The financial statements are always the after-the-fact validation of operating decisions made months before.  You should be able to show the trends and developments in your operating metrics to potential lenders and investors as they happened, that later became your financial results.

Know What Type of Capital is Appropriate – Investment comes in many shapes, sizes, and structures beyond the simplistic categories of “debt” or “equity.”  Today’s markets can provide an array of capital structures between these two compass points, such as mezzanine debt, uni-tranche facilities, trade finance, and structured contracts, may fill a distinct need perfectly, or be combined with senior debt or equity to provide a capital structure that allows the business and the shareholders to reach their objectives.   You and the company raising the capital for you should reach understanding of these structures to have a clear understanding of the business needs to find the right partnership.

Know How the Capital Will Change Your Business – Further, you should understand and demonstrate the effect that new capital will have on your daily operating metrics – how quickly will they respond, improve, and flow into the financial statements, justifying the investment.  You should understand, communicate, and validate how the capital will change the business after a transaction, long before it shows up in the financial statements.

Know Your Competition –  When it comes to attracting capital, you are in the most competitive market you have ever entered.  It is not just the players in your industry who are your competition here, but the companies in EVERY industry.  Your company need is one of thousands of opportunities that arise daily for institutional capital to consider.  You must present a compelling story for your capital need to rise to the top of the pile.  Like any good sales process, you should be prepared for plenty of rejection and remain undeterred, knowing that the market feedback from those situations might be some of the most valuable drivers of your future development. 

Before You Get Started, Get Ready 

Develop Your Data – While your financial data is the foundation of the story, no one moves into a building simply for the foundation.   The operational details, such as production numbers, cost trends, human resource issues, gathered in near real time, drive and forecast what the financial statements will say.  Being able to measure, track, and trend this data is critical to give capital providers an understanding of your business that may be second nature to you.  You have to quickly get strangers up a learning curve that you have developed over years of experience, analysis, battle scars, and intuitive feel.  Telling them helps – but SHOWING them helps it ‘stick.’ 

Develop Your Story –  The data tells how, the story tells WHY.  Why did you make the decisions you did?  What are the judgment calls that can’t be quantified with data?  Institutional capital does not invest in companies, products, stories or markets.  It invests in MANAGEMENT, MANAGEMENT, MANAGEMENT. 

Develop Your People – To that point, large placements of capital can never rest on one person.  There has to be a deep team of talented managers, with a cohesive understanding of capital allocation decisions, to make an institutional investor feel comfortable that an investment will be well protected, not just at the closing table, but years after the transaction. 

The Right Partner Requires the Right Process – Look everywhere.  Chances are that you are going to need to look well beyond local lenders and investors to find your ideal capital partners.  You should be prepared for a regional, national, and even global search, and pick an advisor that has the resources in place to manage a search that broad

Systemically Approach a Wide Range of Parties – The capital markets change daily, with new entrants and structures adding to ever-changing risk appetites.  To ensure the highest chance of success, your search should span the risk spectrum above and below your business’ specific risk level.  This should provide you a range of opportunities, allow you to have market competition work in your favor, and is most likely to uncover that “outlier,” the capital and partner that uniquely fits your opportunity.

Capital is a commodity: good partners are a rarity – The ideal partner will bring far more than just capital to the table.  Industry experience, contacts, management resources, growth opportunities, and a similar approach to managing a growing organization, all of these should be on your wish list along with capital.

You Control the Process – You have a business to run, so you shouldn’t also be running a thorough capital markets search that spans multiple time zones.  While Heritage can formulate and execute the strategy, you have control at every step of the way: determining who is approached, who is provided information, and who is precluded from that effort.  A search needs to be thorough but discreet, and information should be informative, yet controlled.  Heritage executes under your direction, every step of the way. 

How We Charge for Capital Raising 

As the steps outlined here take months of preparation, we typically charge a small monthly retainer for the first few months of an engagement.  Once we have approached the market and find a capital transaction to be feasible, the bulk of our compensation comes from a success fee upon the close of the transaction.  The nature and structure of that fee is flexible.  It can be based on the total amount of capital, the pricing and structure of that capital, or even the amount of capital replaced in a corporate restructuring or reorganization.  We will structure a fee agreement that absolutely aligns our interest with those of the shareholders, and ensures that every dollar of compensation provides a multiple of benefits to the company at, and long after, closing the transaction. 

Heritage Capital’s Goal 

Capital raising transactions can be transformative events for a business, allowing our clients to aggressively deploy new resources into new markets.   While the resulting increase in size, scope, and shareholder value is expected and easy to quantify, transactions can also change the nature of a company, forcing new and unexpected challenges on people, systems, management, and governance.  Heritage principals have been operating executives and lived through these transformations firsthand.  We’ll not only develop and manage the transaction, but we can also prepare your people and your systems for “life after the deal.”   Just like personal relationships, good capital partnerships require self-awareness and maturity.  You want to ensure that capital satisfies it your real need along with that rare partnership where both parties, you and the investor, win.