Consultant Vs. Investment Banker
Business consultants often call themselves investment bankers and investment bankers perform many of the services provided by business consultants, so it is sometimes difficult to know whether you need a consultant or an investment banker. The main difference is the firm where the person works. An investment banker works for a firm that specializes in investment banking. It may be a small regional boutique or a large globally known investment banking house, but it offers services that include mergers and acquisitions, corporate finance and supportive consulting. Many consultants are sole proprietors but there is also a large consulting industry made up of regional and global firms. Consultants tend to work in broader specializations, including turn-around, restructuring, strategic planning and internal process development.
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Investment Bankers
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You need an investment banker for transactions such as private investment of equity in your company, merger or acquisition activity such as the sale of your company or the purchase of another company. The investment banker maintains a book of indications by other clients regarding their merger and acquisition plans or their interest in investing in a promising company. Part of the investment banker's service is to perform extensive due diligence on your company operations and finances, and to offer advice on how to improve your chances of achieving the transaction you desire.
Business Consultants
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Although business consultants often assist in the search for investment capital and financing, as well as strategic partnerships and potential merger and acquisition candidates, a business consultant tends to be more of an internal adviser. The consultant may assist you in finding an investment banker or preparing your company's records and processes for due diligence. A consultant works for you, but an investment banker may be representing the interests of his firm.
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Services
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Choose a business consultant to assist you in deciding what to do about a given problem you have identified in your company. A consultant can work with you to perform a strategic planning process and manage the change indicated. Research is another function of a business consultant, which is why you can use a business consultant to do the footwork necessary in deciding which investment bankers to interview and how their various proposals will benefit your company.
Considerations
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Unless you have a clear plan that calls for the work of an investment banker to arrange and conclude a transaction, you should use a business consultant. Most companies need advisory services to analyze their enterprise and arrive at a plan before undertaking a course of action regarding investment, financing, merger or acquisition. One of the main causes of company failure is ill-advised transactions. The investment banker will work to help you achieve what you think you need, but the consultant will help you figure out what you actually need.
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References
- Photo Credit Three colleagues working at a computer. image by Vladimir Melnik from Fotolia.com
