Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

May 13, 2018

Not A Penny More!

By Jeremy Albelda


“Not a penny more” or “this is the percentage commission I’m willing to pay out, and not a point more!”- familiar words every business owner has heard in the past from one of the business’ customers. What do you do?

Whereas this negotiation approach might be viable in an ongoing business that generates a consistent product or service flow for its revenue, with new customers coming through the door every day, it’s a devastating approach in the deal making world where the business transfer process consists of only one single deal.

“Business owners need to recognize that deal making is a negotiation, a give-and-take,” says Achim Neumann President, A Neumann & Associates, LLC, a New Jersey based Mergers & Acquisitions Advisory firm,, “an overly firm – or sometimes stubborn approach – or one-upmanship will ultimately kill what could be a good deal for both sides. A lack to engage, or strongarm, will not result in a closed deal.”

At times, some business owners set very negative, early telltale signs to an M&A advisor: the sell-side owner is completely insistent on a certain percentage for the M&A advisor’s success fee, not intending to bend under any means – even though various value propositions have been established.

However, if for example we were to assume that there is a delta of three percentage points in the success fee between what the business owner is willing to pay versus what the M&A advisor expects for a certain sized deal, then the immediate impact is only 50% – in light of Uncle Sam typically absorbing such; in other words, a three percentage point fee difference translates into a 1.5 percent after-tax net receipt difference.

Moreover, a 1.5 percent after-tax net differential is so minute versus the overall deal negotiations – often fluctuating 10% to 15% in deal size and structure – that insisting on preserving such reduction is simply not in any relevant relationship to the final deal negotiations.

This behavior becomes even more questionable if one wonders why a business owner would not hire the best M&A advisor obtainable for selling his business – a one-time (final) event to maximize income before retiring.

To take the example above, namely, to engage into a debate about a success fees being 1.5% apart versus ultimate deal negotiations fluctuating 10% to 15%, lacks any kind of economic reasoning. The qualifications of the M&A advisor should be the relevant determination, not a 1.5% fee differential.

Indeed, most often it’s the owner’s lack of true motivation to sell the business, generating numerous hurdles in the process early on. A non-agreement on fees provides an excellent excuse for the business owner not (having) to proceed with the sale.

However, history has shown that the very same business owners often find himself/herself still in the very same situation five years later, unfortunately, most often though the business or market environment has declined resulting in a lower Fair Market Value for the business.

Thus, a debate about success fees most often has some very different underlying reasons than the business owner’s focus on maximizing post transaction net earnings.

M&A advisors are well advised to recognize such situations well before expending a significant amount of time and resources in preparing a business for sale, as the lack of motivation and willingness to negotiate will ultimately render any deal impossible.

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About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or

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Client Testimonials

“ I appreciate your diligent approach to screening buyers and sellers as well as the high quality CIM that you produce.”

Andrey O, Investor

“Finally enjoying retirement after recently selling my business using the services of A Neumann & Associates. Joe Oddo provided the conduit to a successful transaction. Joe knew when to inject input and when to simply listen and allow the buyers to vent, step back and regroup. The outcome met our expectations and got us to the finish line, which included my staying with the company six months in order for the buyers to get their footing and keep our workforce in the loop. He helped at every step by providing his expert guidance & resources. Thank you!”

Emily Parker Myers, Co-Owner - Myers McRae

“I had been in touch with Karin and Gary from A Neumann & Associates regarding some opportunities and was looking forward to meeting with them. Hence, when they organized a seminar in Princeton, NJ, I was quick to sign up. The seminar was very informative as the team walked the attendees through various scenarios and referenced real life buying/selling situations they had been through. The sessions by Gary, Karin and Achim were crisp and focused and brought clarity to potential seller and buyers. I strongly recommend the team and look forward to continue working with them.”

Gaurav Tyagi

“Thank you for your Event on "How to value, Sell, and Buy A Business for Maximum Profit" and the insight into ANA’s approach on what is involved in the Business Exit for sellers. Garys Hervieiou's "Business Valuation", Achim's "Deal structure" presentation and Karin’s "Preparing the Package" are real street knowledge shared. They answered attendees questions which makes it more interesting for learning from others. Great for small businesses like us. The presentations were totally worth our time and travel for the event to Princeton, NJ from Rockville MD. Ravi Bhutani, President, CIPS”

Ravi Bhutani

“Gary, this is to thank you for an excellent job done in selling our business. We could never have done it without your professional expertise, dedication and time put in without reservation to make it happen. We will gladly and highly recommend you to anybody in our position.  It was a pleasure to work with you.”

Pat Iammatteo, Owner

“Your vetting is simply outstanding, among the best I've seen from a broker.”

Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi
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If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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