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There are two kinds of advisors: the relationship-based and the transaction-based. It is recommended that you choose the former over the later in order to ensure a smooth exit process that would yield the most possible benefits for you. But before you post your business for sale by owner and choose an advisor, let us define what relationship-based and transaction-based advisors are.

Relationship-based vs. Transaction-based

By definition, relationship-based advisors work with you on consistently for years. These are the people who have seen you grow your business and have been there in every step of the way. Therefore, they know (and maybe even helped shape) your business goals. Examples of relationship-based advisors are accountant and wealth planners that perform ongoing wealth planning. Sometimes, insurance and risk management consultants and attorneys also fill this task. You call on these people whenever you need help and you don’t have to introduce yourself and your business every time.

Meanwhile, transaction-based advisors only address a client’s specific concern. Usually, this concern is non-recurring; therefore, the work is project-based. Examples of these types of advisors are real estate brokers, as well as acquisition and merger advisors.

Why Go for Relationship-Based Financial Advisors?

The process of exiting your business is a lengthy and complex one. You, as the owner, have to think about all the implications of the decision; especially on how the business would run without you, and how you would live without the business.

Exit planning requires a lot of thinking and understanding before critical decisions can be made. Hence, it is something that requires time and self-reflection; two things that will not sit well with transaction-based advisors.

However, you need not dismiss the transaction-based planners right away because they will prove to be invaluable in completing the sale of your business. This is because the transaction is the project at the other end of the financial spectrum. It is output of the series of consultations with the relationship-based advisors, and not necessarily the reason for the engagement. The transaction-based advisor can utilize the learnings from the exit planning process in order to seal the sale.

In conclusion, go for relationship-based advisers if you decide to advertise your business for sale by owner. These are the people who will treat you as a lifetime client, and will be there to conduct a multi-year planning process to guide you.