In almost every initial meeting with potential clients, one question always comes up, either as the first or second inquiry: “How do you get paid?” As I explain the fee structure, I often notice a sense of apprehension among clients. Let’s dive into this topic further and explore the reasons behind their concerns.
Where Does the Apprehension Come From?
I completely understand why clients might feel apprehensive when they see the fees presented. It can be challenging to convey the true value we provide in the early stages of our partnership. While finding buyers is undoubtedly important, what’s even more crucial is everything that happens after we connect with them.
The best way for clients to truly grasp the value we provide is by going through the process themselves. It’s only at the end, when they successfully sell their business, that they see the tangible results and understand the worth of our fee. In all our experiences, clients have never had an issue paying our fee once they realize the benefits. However, some buyers may initially hesitate when they learn that involving an advisor may incur additional costs. Let’s discuss those specific concerns about fees.
Beyond the Initial Search: Comprehensive Services and Expertise
A significant portion of our service extends beyond the initial search for prospective buyers. Our team offers a variety of multifaceted services that contribute to the success of the transaction. Our capabilities include developing comprehensive financial analysis, crafting compelling sale memorandums, and optimizing the structure of the transaction to ensure maximum value.
We navigate through complex negotiations, balancing both parties’ interests while maintaining a focus on the end goal. We also help manage the due diligence process, ensuring that all necessary documentation is in order and that every question raised by the buyer is addressed promptly and accurately.
Perhaps most importantly, because of our experience, we can anticipate potential problems and mitigate any risks that could derail the transaction. Our proactive approach often proves invaluable in maintaining the momentum of the negotiation and ensuring a smooth sale process.
So, to sum it up, our work transcends finding potential buyers – we guide and support our clients through every single step of the process, providing a holistic service that truly justifies the investment in our fee.
When you take a step back and consider the bigger picture, it becomes clear that the buyer recognizes they will need to pay a higher price for our clients because of our involvement. There are some estimates that have been made by my competitors that show that the value of a business is increased by 30% as a result of hiring a qualified advisor. I am not sure that is totally quantifiable, but I can tell you the price will be higher for sure. Buyers understand that; some buyers have put together teams of people that try to contact potential sellers directly and encourage sellers NOT to hire advisors! Our goal for any client that we represent is that they receive the correct value for their company. There have been times when we needed to let our clients know that the value they placed on their business was not realistic. The most important thing an advisor does is to give their clients the correct expectations on the Value of the Business. The goal for the advisor is to meet or exceed that expectation. Furthermore, as we delve into their financials, we often discover opportunities to enhance their projected financial statements (pro forma). This allows us to further demonstrate the value we bring to the table.
The Buyers’ Perception
I recently had an amusing experience with a buyer. They approached me and asked if the client would consider working with them if they covered our fee. For some reason, buyers mistakenly believe that the client paying us a fee discourages them from doing business together! I am not sure I understood the buyers’ question because they sure understood that they were going to pay more for the business because I was involved!
Regardless of how the math is calculated, the fact remains that a buyer ends up paying more for the business when we are involved, and some of that money gets paid to us. The truth is people are willing to pay us because, statistically speaking, when a client or potential client in the insurance agency industry hires us, positive outcomes are consistently observed, as verified by various articles and research studies.
The Bottom Line
We have not encountered a single client who has objected to paying our fee at the conclusion of an engagement. This is due to the fact that, by the end of the process, clients truly understand the value we provide and are willing to compensate accordingly. Sukay and Associates have one founding principle, and we will not deviate – We will always do what is in the best interest of our clients no matter how it affects our fee.
In conclusion, the fees associated with our services are not a hindrance but an investment that yields considerable returns for our clients. They facilitate a smooth transaction process and receive better offers from buyers, which ultimately leads to a more successful partnership. Buyers, as well as our clients, come to understand that our expertise and involvement enhance the value of the transaction and are worth the investment. We take immense pride in the work we do and are proud of the consistently positive outcomes we achieve for our clients. The most important measure for us is that 95% of our new business comes from referrals not only from our past clients but also from buyers and attorneys who have worked with us in the past. This is a testament to the value we bring to the table. We look forward to continuing to serve our clients with dedication and professionalism, ensuring they achieve the best possible results from their transactions.
