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How to generate GIANT fees and new clients with M&A
Can learning M&A skills create $5,000 & $10,000 or even $100,000 engagements?
Nervous about buying a business?
Then help your clients or grade “A” prospects buy their competitors in a roll up and earn healthy fees that can lead to long term revenue streams.
This year the valuations we’re seeing in small business transfers are at an all-time low. Most research points to the ongoing recession that has forced many owners to seriously question their future. Add to that, the number of baby boomers flooding the market with business for sale listings and we have a perfect storm.
But what if you’re uncomfortable running out and buying a company as a second or third income stream. Well here is a way for accountants, business coaches, bookkeeping services and even law firms to tap into the M&A boom without taking much risk. Help clients at a flat service fee.
First we need to understand a little known fact.
It is generally cheaper to buy customers and employees then it is to grow them organically. That makes buying your competitors’ one of the easiest ways to grow a business imaginable. You get ‘off balance sheet’ assets thrown in on the deal.
If you are an accountant or business coach consider using M&A as a prospecting tool for getting into new grade “A” clients. From our experience over the past few years we know the easiest way to grow a business is to ‘roll up’ struggling competitors. Your clients and prospects know this, but have no idea how to start the project.
Writing a letter to your clients (email me if you would like our letter at firstname.lastname@example.org) offering to help them grow by acquisition is the best place to start. Then you can use the same letter campaign to target prospective clients that you would like to work with but have no way in the door.
Your letter will be specific. For example if you have a client in the home health care business in Pima County you’ll say “There are 133 home health care companies in Pima County. In any given year 20% of them are struggling and sometimes failing. You can probably pick their clients and best employees for less than it cost to grow organically.” We specialize in finding out who is thinking of selling or closing and then analyzing the ‘deal’ to make sure it fits into your growth plans.”
The letter coming from YOU adds gravitas to the inquiry and will get a higher response then a letter or call directly from your client.
Your service should price between $4,995 and $9,995 for the following steps.
- Build a list of all your competitors in the county
- Send out a series of two first class letters under my letterhead announcing our interest.
- Developing a financial model for you to determine which acquisitions make sense.
- Our office will make a follow up phone call to everyone on the list to determine if we have a prospective acquisition and set a meeting with up to 10 of the best prospective sellers.
- Gather pertinent information about the business to determine if we should move forward.
- Determine if the business fits your pre-set guidelines.
- Focus our energy on those firms that are distressed and offer the biggest potential ROI.
- Review those ‘deals’ that make sense with the client – so that you can tell us to move forward to a meeting between the client and the seller.
- Review of financial records to determine the viability of the acquisition.
- Create a rough draft evaluation of the business for the clients review.
- Assist in structuring an offer for the client to present to the seller.
In the event that an offer is accepted in general terms we will then move forward to the next steps, upon your acceptance of our engagement letter. Some of these steps may require the help of outside professionals such as a business lawyer. We will negotiate professional fees upon your behalf and with your approval. The next steps are…
- Creating the supporting confidential memorandums and offers for a sale.
- In depth due diligence following our 109 step process.
- Support and assistance in the clients’ negotiation of the acquisition.
- Assistance in finding capital if needed.
- Review the tax structure and cash flow implications of the ‘deal.’
- Assistance in developing an asset protection plan so your current holdings are not at risk.
- Creating and managing the documents and compliance filings.
- Post-acquisition support including cost cutting advice on areas of overhead that can be reduced by combining companies.
This is an easy way to learn more about M&A while helping your clients grow their business. We have rolled up 3 firms into our Home Health Care business in the past year – it is the fastest way to grow the customer base and cherry pick the best employees we know of, for the lowest cost.
Your clients and prospects will love the outcome of this project – even if they never buy a company.