Unfair Expectations of Searchers from a Service Provider!!

Hello Searchfunder Community,

I have been quite active on this platform, speaking to hundreds of searchers and working with several of them. I've observed a common scenario where service providers are expected to operate on a success-fee-only basis, taking on significant risk without upfront compensation.

Firstly, I feel it is a poor business mindset. A true business mindset acknowledges the presence of risk from the moment one starts thinking of running or acquiring a business. Risk is inevitable as the owner or key equity holder of the business.

Expecting a service provider to absorb part of the risks without any upfront compensation is not only unfair but also unsustainable.

Here's why this model can be challenging and my thoughts on a fairer approach:

Upfront Investments: Services like building a system to generate proprietary deal flow require substantial upfront resources such as building lists, doing tech setups, tool integrations, campaign strategy, email copy and messaging, campaign management, etc. These tasks demand both time and financial investment from our team.

Operational Costs: This system takes several months to produce good results. Executing a campaign over six months involves ongoing expenses, from team salaries to technology costs. Expecting service providers to cover these without any upfront payment undermines the sustainability of the service.

Limited Control Over Outcomes: Our role typically concludes once we set up meetings with potential sellers; the deal's closure is out of our control yet our compensation hinges on it. This puts us at a high risk of not being compensated for our efforts.

Risk of Non-Closure: Despite our best efforts, there are numerous external factors that could prevent a deal from closing. This further amplifies the risk when working on a success-fee-only basis.

Experience and Quality: Generally, only less experienced providers or those looking to build a portfolio might agree to high-risk, success-fee-only terms. Experienced professionals expect to be compensated for their expertise and upfront work.

To me, if you are looking for service providers to take risks on their plate and invest their time and money just like a business owner does, why not offer them equity to compensate for taking the risk?

Doesn't make sense, right?

EXACTLY!!!!

Keeping all the risk on our plate Doesn't make sense either..!!


To address these concerns, we propose a balanced compensation model. For instance, a modest upfront fee combined with a success-based component ensures commitment on both sides and helps cover the fundamental costs of the services provided.

And if you are not willing to go for that, why not take the help of ESCROW?



I understand that every searcher's situation is unique and am open to discussions. If you have a preference for success-only deals, I invite you to share your perspective on why it makes sense based on the pointers shared above.

Feel free to share your thoughts, I would completely respect your disagreement thoughts and I might find to better structure to deal with the clients.

On a sidenote, if you are a searcher looking to build a system of proprietary deal flow, where you retain the ownership of everything that is done for you and isn't hesitant to spend money to find a business to acquire, let's talk.

Send me an email at redacted and let's find you a business to acquire.