Finweek English Edition - - MONEY -

be very ex­pen­sive trans­ac­tions. They take time away from you to run the busi­ness and also cost money be­cause you need to em­ploy the ser­vices of spe­cial­ist ad­vis­ers who are there to make money by guid­ing you through a process, and you’ll also have to pay other trans­ac­tion fees as money ac­tu­ally changes hands. The ad­vis­ers will cost more money if you are un­pre­pared sim­ply be­cause there is more work for them to do. You will also not know enough when be­ing taken ad­van­tage of.

The more prepa­ra­tion you can do in ad­vance, the lower your trans­ac­tion costs will be both in terms of dis­trac­tions and ad­vi­sory fees paid. From an ad­vi­sory per­spec­tive, the amount of work done to con­clude a deal in the $1m range is not very dif­fer­ent to that of a $100m deal, so ad­vis­ers will charge a much higher per­cent­age fee for smaller deals. Re­search I’ve seen sug­gests that smaller busi­nesses pay to­tal trans­ac­tion costs of up to 25% of t he deal for deals un­der $500 000, whereas to­tal costs on a $100m

deal are more likely 2%.

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