If you want to sell your company, you probably want to know what types of fees an M&A firm might charge. There are different M&A fee structures:
1. Some M&A Companies charge a fee upfront before they begin work.
2. Other M&A firms will charge you a monthly fee.
3. Almost all M&A advisors charge a success-based fee, typically a percentage of the sale price when the company is sold.
Some M&A Advisory firms only charge a success-based fee, and others charge all the various fees. Understandably an M&A firm would want to charge an upfront fee. They will tell you that they have marketing fees to pay, and this is true. But as a business owner, do you want to pay a fee before the M&A firm has done any work for you? There are several disadvantages to paying an upfront fee. The most obvious reason is that if they don’t sell your company, you will have already paid them a fee of $10,000 to $80,000 upfront with nothing to show for it.
However, there are other reasons as well. If you hire someone that you will only pay if your company is sold, then you can be more confident that they are only taking your assignment because they are confident that they will be able to sell your company. They will be paying marketing fees and spending considerable time on your assignment, and they can only recoup these costs if they are successful.
This brings me to another reason why you can benefit from hiring a company that only gets paid if they are successful. Successful M&A firms like Synergy Business Brokers average several deals closed per month. So successful firms like us should be able to easily afford to pay marketing costs and invest time because commissions are always coming in.
If you are talking to an M&A Company that is worried about collecting upfront fees, you have to wonder if they have enough successful closings. At Synergy Business Brokers, our typical commission at closing ranges from $100,000 to $1.5 million, so we’re not focused on a smaller fee. We would rather work with our clients and celebrate mutual success and payment than concern ourselves with a relatively small upfront fee. We feel that we should only be paid when we are successful in selling our client’s company.
You want to check what other people say about an M&A firm, such as their Google reviews, Linkedin reviews, and reviews from third parties that evaluate the best M&A firms in the country. Synergy Business Brokers has been recognized by numerous third parties as one of the top M&A firms in the country. But we’re not the right M&A firm for everyone.
So, what other criteria should you use to find the best M&A firm to sell your company without an upfront fee? The answer to that question depends somewhat on your company.
It would be best to hire an M&A firm that has experience selling companies in your industry and sector. This would benefit you in several ways. First off, they would be familiar with the terminology in your industry, which would help them talk with potential buyers. Secondly, they will have a list of potential buyers in the industry to reach out to. They will also have knowledge of many of these buyers to separate the pretenders from the buyers most likely to purchase your company. Lastly, they can effectively write up documents highlighting your company’s benefits, targeting both industry buyers and buyers from outside the industry.
Also, the size of your company matters because most buyers are interested in buying companies with a certain price range and size. So, you will want to select an M&A firm with experience selling companies of your size in revenue and net income. With this experience, the M&A firm will have relationships with companies and private equity firms that are interested in buying companies of the size of your business. They will also have experience developing a marketing program focused on your firm.
You want to hire an M&A firm that has sold companies in your geography, and that hopefully has an international and national presence. This will give you the largest number of potential buyers to draw from.
You want to work with an M&A Advisor that you have a good rapport with. A typical sales process takes 6 to 12 months, so having someone you can communicate effectively with is essential.
We specialize in selling profitable companies in the lower middle market with annual revenue of $700,000 to $70 Million in construction, manufacturing, healthcare, services, technology, distribution, and transportation. If you own a company that fits these criteria, we offer a free confidential consultation to understand your business and provide you with a potential selling price. If we’re on the same page and you are ready to start the process, then you won’t need to pay us anything unless we successfully sell your company.
You can call us at (888) 750-5950 or fill out our form and one of our Senior M&A Brokers will follow up with you to discuss your goals.
Best M&A Advisors for selling your company with no upfront fee
