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CIEX BLOG :: Proactivity for Corporate Finance Teams – Becoming a buyer for your clients.

Finding Deal Opportunities

Published Date: 7-Jan-2020
#AccountantSeries

Deals opportunities are initiated in two ways:

  1. Your client approaches you to sell or buy a business on their behalf
  2. You see a deal and recognise that it may be of interest to a client

The first is the obvious model, it is a reactive form of service which sits well with traditional firms willing to extend their range of service. The second is a fully proactive model where the firm is engaged in building its service levels and fee income utilising a growth model. Due to simple mathematics the difference between these two deal initiation services in terms of building Corporate Finance scale is enormous. Why, because if at any time only X% of your clients engage with you to discuss an exit or acquisition that is the maximum activity level to which your Corporate Finance team has scope to grow. However, if you look to the scale of possibilities where you engage with the deal offers available from other Corporate Finance Teams and have in place a simple review system to look for matches across your client base your deal growth possibility is exponentially greater.

Q. Where do you start this part of the transition from reactive to proactive?
A. With a few questions:

  1. Do we* really know our clients?
  2. Are we willing to suggest deal opportunities to clients?
  3. Do we have a referral system between our service areas which recognises the value of the referral?

*Note that “we” is the term used, the success of any change initiative depends entirely on the level of acceptance by the team

1. Do we really know our clients?
INDIVIDUALS within the firm will have different professional relationships with clients and know different facets of their business and ambitions. The problem is that the FIRM may not have that information. Managing your conversations with clients at key times like annual reviews to include areas like plans, stresses and ambitions, will build a picture of their appetite or the presence of a nascent strategy. Centralising or sharing this data provides a basis for proactive service development firm wide. Any simple relationship management tool will allow this knowledge to be filtered and exploited by all service areas.

2. Are we willing to suggest deal opportunities to clients?
For firms making the transition to proactive activity this is a legitimate and vital question. If a team member’s professional experience to date has been to report and react to historic events that is a safe place. Discussing the responsibilities as well as the benefits of introducing deals to clients in open forums will build confidence within the firm to reach out to clients. Not everyone within the firm will be suited to this work, that is not a problem, the aim is to instil confidence in the process for those who can.

3. Do we have a referral system between our service areas which recognises the value of the referral?
Every growth oriented business loves referrals, they remove the need for resource burning research, cold calls, and the whole lengthy introduction process; but within your firm what is the recognition given for a referral? Referrals are made by individuals, individuals think in terms of job security, advancement and recognition. Taking the time to publicly acknowledge a good referral or privately explain the issue with a poor referral (while acknowledging that the action is welcome) will develop the Firm as a whole. If there is no obvious benefit for someone in compliance, who is working all hours to complete EOY work, to make note of a lead why would they do it? We would like to think that professionality would lead them to do it but how many are missed? In diverse teams of very skilled professionals like a large accountancy practice the natural progression is towards a silo mentality. Activities like inter speciality working groups developed to facilitate the mutual recognition of the value of shared data can be used to open up the trove of additional fee income possibilities currently locked within the silo.

Turning proactivity into productivity

The purpose of proactivity is to increase transaction and Fee levels. This is delivered by identifying the most likely sources of business and concentrating on them. For Corporate Finance teams lead production is the key to increased transaction levels; so how do you maximise the number of leads you produce? The easiest source of leads are your existing clients. When you come in contact with your firms clients do you maximise that opportunity?, do you have solid processes in place to help your teams identify and pass on leads?

In business development terms is your firm a single team or a group of teams?

CIEX BLOG :: Proactivity for Corporate Finance Teams – Becoming a buyer for your clients

 

TAGS: 

CIEX, #AccountantSeries, M&A, Corporate Finance, Deal Teams

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