Small Business M&A: The Role of Buy-Side Advisors

In the world of small business M&A (Mergers and Acquisitions), several important third parties work alongside the primary buyer and seller. These usually include accountants and attorneys representing both sides, as well as a lending party if the transaction involves financing. Additionally, business brokerages often participate, representing either the selling or buying parties.

Sell-Side Brokerages: The Familiar Faces

Sell-side business brokerages are the brokerages that most people are familiar with. These firms specialize in representing individuals or entities that want to sell their businesses. Their roles typically include confidentially marketing businesses, mediating communications, vetting potential buyers, and streamlining the selling process for their clients. Sell-side brokerages drive a significant portion of the supply of active businesses for sale, particularly in the main street and lower middle market segments. Despite the plethora of sell-side brokerages available to assist business owners, there’s a notable lack of representation for potential buyers on the other side of transactions.

The Buy-Side Advisor: A Critical Resource for Buyers

This is where buy-side advisors come into play. The primary role of a buy-side advisor is to simplify the complex process of business transactions from the buyer’s perspective. Buy-side advisors help their clients search for companies, both on and off-market, that match their criteria, assess those companies, and ultimately complete a purchase. They guide buyers through financial analysis, maintain ongoing communication with potential sellers, and conduct due diligence on attractive targets. Generally, the role of a buy-side advisor is more niche and involved than that of their sell-side counterparts. This is because the buying party must carefully assess all aspects of target companies and potential deals, and they often carry nearly all the forward-looking risks associated with an acquisition.

Bridging the Gap

In a market where most potential buyers have limited experience with small business M&A and sellers have abundant access to representation, our firm serves as a bridge. For over 20 years, we have been exclusively assisting individuals, private equity groups, and strategic buyers in acquiring both listed and proprietary opportunities across various industries. Our expertise, cultivated through decades of real-world experience, brings immense value to our clients. Alongside our comprehensive buyer services, we’re committed to broadening public knowledge about the small business M&A landscape as well.

We believe that potential business buyers should have access to the same level of resources and support that sellers currently enjoy. To fulfill this vision, we will continue to offer top-notch buy-side advisory services while routinely publishing content that demystifies the world of small business M&A. By doing so, we hope to make the dream of buying a business attainable for more people than ever before.

Brandon Smith

Partner, Business Transfers & Strategies, LLC