Is hiring a buy side advisor worth it?

July 05, 2023
by a searcher from University of Utah in Salt Lake City, UT, USA
Been searching full time for a month now I have contacted about 12 business brokers in Utah that have listings. I found 2-3 listings of interest: one of them I had an owner call and am no longer interested in the business due to customer concentration, another one went under contract, another one the industry seems too volatile for me.
I am eager to buy a business and I am wondering if hiring a buy side advisor/business broker is worth it or if I should just keep on scanning brokers websites and hit a deal once it becomes available.
1- Has anyone used a buy side advisor to help them buy a business? How did it go? How much did it cost fees etc?
2-Does anyone know of any good buy side advisors in Utah?
from The University of Chicago in Chicago, IL, USA
I engaged a buyside advisor to help me search as am still full time W2. My calculus was that the economics made more sense to keep my job and leverage someone else to help with the proprietary search. I had a tightly defined criteria which still yielded potential targets in the thousands due to being in a major metro area. Despite paying a retainer for the better part of the year, I do not own a business. It is not guaranteed that hiring a buyside advisor will net you a quality business. This is not a knock on the advisor I hired - they are great and did what they were paid to do. Instead, it taught me that proprietary is really hard and any search has a large component of luck and fortunate timing to it. I spoke with a fair amount of potential targets, but nothing ended up being actionable.
One under appreciated benefit of using an advisor is it legitimizes you to certain sellers and their reps in a way that reaching out on your own behalf does not. It signals that you have legitimized yourself to the advisor or they would not have taken on the engagement so therefore the sellers and their bankers should also take you seriously.
from Howard University in Denver, CO, USA