When businesses become successful (in the several million dollar range) or you inherit a business from a family member, traditional financial planning services may not provide the impact that you need. Buying and selling cars and houses are one thing. When you are buying, selling or expanding businesses the expertise of an investment banker are needed. How will you know the best time to sell, when to bring in investors, or what portion of the business to sell? Since you are dealing with millions of dollars, both in terms of revenues and debts, it is not the time to trust your gut or rely on the advice of persons who are not familiar with the procedure of dealing with millions of dollars on a routine basis. This is not the time for insurance brokers or real estate brokers. The benefits are beyond what they are experienced with and so are the risks.

Although Goldman Sachs and Morgan Stanley broker deals for Fortune 500 companies, which may be more than you need, you may need an investment banker familiar with the business needs of such an enterprise.

People who have rarely dealt with the banking industry often have misconceptions and confusion. Not every banker looks like the character out of the Monopoly board game (The character's name is Mr. Monopoly). There are times when people need a banker to arrange loans for business growth. People who have inherited small businesses or who want to take their small business to another level often use investment bankers.

About 70 percent of an investment bankers business tends to be where a family or an entrepreneur has started a business and they are looking at their current options. The family may have inherited the business from their father or grandfather, and they’ve grown the company to somewhere between $20 and maybe 100, 150 million of revenue and they’ve decided for family reasons or personal reasons to exit the business and sell it, and reap the financial rewards of a lot of years of hard work.

When you or your family have worked to grow a business this large, significant skill is needed in the planning of each step you take. Dealing with amounts like these seems enormous to some small businesses. With larger numbers, greater skill and expertise is needed in conducting business. Although your business buddies could help you when you were starting out, skill and experience is needed in successfully navigating your way through financial challenges.

The investment banking industry covers a wide spectrum. It goes from the very small deals, where the alternative is to use business brokers. An example of this is common place with business brokers handling the local mom-and-pop type stores or restaurants. When businesses grow, there comes a time that companies need to consider options and ways of obtaining capital. That is where you get into the true investment banking, where you’re creating Offering Memorandums. The bankers actively seek out private investors for your company. Deals in this part of the industry tend to be in the $20 to $100 million in value range.

Sometimes companies are not attempting to raise capital, but are considering either a merger or acquisition of another company. Transactions like these involve not only the financial aspect, but also an awareness of legal liabilities and ways of further developing the business. There are also some companies that seek ways of pleasing their investors by taking steps to maximize shareholder value through the sale of the company. Knowing the strategies and planning associated with each of these types of needs are the skill sets of investment bankers.

In the event that the business owner wants to sell, investment bankers locate the potential purchasers and maintain the economic value that the initial investors sought when they invested in the company.

Investment bankers help companies raise capital, improve the securities offered and advise on business transactions regarding mergers or purchasing another company. In order to perform these functions, investment bankers need to be well versed in the business environment their clients are dealing with.