Buy-side help: advisors who search for you

The short version

• A buy-side advisor works for you, the buyer. Their role is to find businesses, help you evaluate them and guide you through the purchase.
• A business broker usually works for the seller. A buy-side advisor sits on your side of the table.
• Buy-side help is worth considering, especially for first-time buyers. Every deal is different, and having someone experienced to consult at each step makes a real difference.
• It costs money. Know how they are paid, and what you get, before you sign.
• Many buyers search on their own and use advisors only for specific parts of the process. That works too.

What a buy-side advisor does

Depending on the advisor and the agreement, they may:

• Search for businesses that fit your buy box, including ones that are not publicly listed.
• Approach owners on your behalf, often before the owner has thought about selling.
• Screen opportunities, so you spend time only on the serious ones.
• Help you read the numbers and spot problems early.
• Help structure and negotiate your offer.
• Keep the deal moving through due diligence, financing and closing.

They do not replace your M&A attorney, your CPA or your lender. They work alongside them.

Who they work for

A broker hired by a seller works for the seller, even when they are helpful to you. Lesson B4.6 covers this. A buy-side advisor you hire works for you. Ask any advisor, in writing, who they represent and whether they could ever be paid by the seller.

How they are paid

Common structures include:

• A retainer, paid monthly or up front while they search.
• A success fee, paid when you close a purchase.
• A combination of both.
• Hourly or project fees for a specific task, such as reviewing one business.

Ask what happens if no deal closes, how long the agreement lasts and whether you owe a fee for a business you found yourself.

When it is most worth it

• You are buying for the first time.
• You have limited time to search while working elsewhere.
• You want access to owners who are not publicly selling.
• You are buying in an industry you do not know well.

When buyers go without

Some buyers search on their own, using listings, brokers and direct outreach. Step 4, Find businesses for sale, covers how. They may still hire an advisor by the hour to review a specific business or offer. That is a reasonable middle path.