Buying a Business

3. Professional Advisers

3.1 Choose advisers with appropriate experience. You may need experts in several different areas, at different stages.

For example, specialists in:

• Market research, accounting, tax and legal due diligence.
• Financing the purchase.
• Employee terms, for example, pension fund provisions.
• Negotiating the deal.

3.2 Draw up specific remits for your advisers.

• Explain in writing what your advisers should (and should not) do. For example, you could ask a financial adviser to analyse projected margins for orders over £5,000.
• Co-ordinating more than one adviser can become complicated. Agree to use planning documents, such as a 'completion checklist'. Give advisers a timetable for the work.

3.3 Agree fee levels as clearly as possible.

• Advisers normally charge by the hour.Agree a target number of hours for each stage of work, and a system for keeping you regularly informed of costs. Negotiate a limit on the maximum fee.
• Advisers may charge by the job.
• Fees may be on a contingency basis, dependent upon the deal completing, or on the price.For example, you might pay an adviser a percentage of any reduction achieved in the price.