Sunday, May 11, 2014

You Can Earn Fat Finder's Fees In The M&A Industry!


Did you know that there are big paydays in the Mergers & Acquisitions industry (M&A) for the astute professional finder? Don't put all of your eggs in one basket when considering branching out to other areas. 

There is lots of money to be made working in Commodities, Precious Stones, Distressed Merchandise, Real Estate & Financing, but smart professional finders will also include M&A which is short for Mergers & Acquisitions.

But what is Merger & Acquisitions? 

This is a general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed.

The M&A business for many years was predominantly limited to ‘insiders' who had connections with each other (it was called, the ‘old boys' network). These ‘insiders' made millions of dollars by sharing information between themselves as to which companies were for sale and who wanted to buy them. As mergers and acquisitions "matchmakers" (also called "finders''), they brought the "seller" and "buyer" together and made their huge finder's fees. 

This 'old boy's network' is old school and with the advent of the Internet, the game has changed dramatically.  You see - the Internet makes it possible for anyone using a computer to research and access business information that was previously hard to find and often available only to the 'old boy insiders'. And you can earn a finder or referral fee for introducing business buyers and sellers that result in a closed transaction. That's right!

Can anyone really make big paydays with the Mergers and Acquisitions business?

Do you think??? Of course you can, that is - if you do it right and smart! And being a professional finder for M&A deals can be a very lucrative home-based profession. Look at this business as you would look at being a real estate broker, for example.  The only difference is that you are matching buyers and sellers of businesses, instead of homes. As a real estate broker you can sell a house for $150,000 or you can sell a house for $2 million. The more expensive the house, the more commission you earn. M&A finder or referral fees can be a lot more, since businesses transactions can be quite larger than a residential real-estate transaction.

M&A Deal Finders businesses that have at least $1-$3 million in sales and go all the way up to $150 million in sales. With these numbers, applying your skills matchmaking in acquisitions and mergers is a far more profitable business than being a real estate broker.

There are many people working in the M&A matchmaker business that earn between $500,000 to over $2 million dollars per year doing this. This does not mean that you will earn this much, or anything at all, since it all depends on your motivation, work habits and follow-up. This is not a "get rich quick" business. This business as with all business start-ups takes time and effort on your part. The business takes research on your part to find the right sellers and buyers, contacting them to see if they are interested, for the business to be presented to buyers the seller matches to, for the lawyers to prepare the 'buy-sell agreements' and for escrow to close before you get your check. The efforts may be strong but the rewards are fantastic!  

What about education and licensing requirements? Don't I need these?

You must consider as with Real Estate & Financing and as well with Mergers & Acquisitions, having specialized learning, education or training will be of great help to you as in any business, but you do not have to be a lawyer, CPA or have an MBA in order to be a successful Finder.

LISTEN UP!:  Being a Finder does not mean you are a broker. As a Finder you do not take on any fiduciary role or act as an agent on behalf of the buyer or seller; you are merely a matchmaker bringing the two parties together and for that you can earn a finder or referral fee. You must have enough horse sense to get the two parties together and then back off and let them work out all the details of the agreement together with their own attorneys, accountants and/or licensed brokers. A great way to get started is to get involved with Investors or Investor Groups that specialize in Mergers & Acquisitions.  

You can choose to work as a finder for these groups as a 1099 contractor (and getting a finder's or referral fee for transactions).  You then need to make sure that that your investor or investment group gives you an annual 1099 as your tax-paying document when you file your taxes on April 15th. The reason being is that this will unofficially put you under their "payroll" as an unofficial employee of their company and disallow you from needing any type of licensing to find deals for your "employer since you will be working in the capacity of a bird-dog and/or finder.

How do you get started in this business?

The best way to get started in this business is to go to your Google search engine and type in the words "Business Buyers" and then looking to see what the buyers have posted online for businesses wanted. This is an important step to take first because you want to start your "seller searches" with the buyer in mind. Once you find an active buyer, create a document in your word processing program such as MS-Word that details what the buyer is looking for. That becomes the buyers "profile" for you to use when searching for businesses and sellers for them. Things to consider when putting together your profile:


1.     Industry: Type of business they looking to buy or invest in.

2.     Industry Size: Does the buyer need the business to meet a minimum revenue or sales level before they would consider buying or investing in them?

3.     Profitability Level: Does the buyer need the business to meet a minimum earnings or net income level before they would consider buying or investing in them)?

4.     Location(s) Required: What location(s) is the buyer interested in? Are they looking everywhere or just in a specific city/state/region)?

Finding business owners and sellers is very easy. For example, go to your Google search engine and type in the words "business for sale". You will find thousands of web sites that list different businesses for sale. When you find the business you think will be of interest to a specific buyer, you contact the seller or business owner to see if they are interested to work with you and are willing to pay you a finder or referral fee to be introduced to buyer prospects.

When they reply with interest, you get your fee agreement in place with them and then fill-out a simple form describing the business for sale that shows the business matches what the buyer says they are looking for. In "Striking Gold in the Finder's FessBusiness", there are several fee agreement forms that you can use. You then forward that information to the buyer. This will be in a the form of a ‘blind profile' whereby the buyer cannot contact the seller without getting back in touch with you first. If the buyer isn't interested in that particular deal, send him another business for sale that matches their requirements / criteria until they find what they are looking for.

When the buyer and seller each finds what they want, the typical scenario would be that the deal goes into escrow. Before escrow closes the buyer would most likely make an inspection trip to see the business. The buyer would be doing this and not you. The buyer would meet with the management group and inspect the business and facility.  If everything is acceptable, they present their offer, their professionals (Attorneys, Bankers, Brokers) prepare the paperwork, set a closing date for the transaction and the buyer and seller tell the escrow company to proceed with the closing. An excellent website to review is:

 www.businessbroker.net

Your Finder's Fee check is either mailed to you or your fee is wired directly into your bank account to you at the time of the closing of their transaction. Remember while all this is going on, all you did was get the two parties together and then back off and let them work out all the details of the agreement together with their own attorneys, accountants and/or licensed brokers. Under NO circumstances, are you to get involved with any part of the transaction.   

Finding business owners and sellers is very easy. For example, go to your Google search engine and type in the words "business for sale". You will find thousands of web sites that list different businesses for sale. When you find the business you think will be of interest to a specific buyer, you contact the seller or business owner to see if they are interested to work with you and are willing to pay you a finder or referral fee to be introduced to buyer prospects. 

To Your Wealth, 

Remington J. Penman  
www.GlobalConnectionResources.Net


Check Out Our Other Blogs:  

http://find4fees.blogspot.com/   
http://biggunscartel.blogspot.com/  
http://theratraceends.blogspot.com/
http://professionalfinders.blogspot.com/
"Failure is the key to success; each mistake teaches us something"










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