29 Mar Advice from Veteran Brokers (Part 3 of 3)
“The following question was asked some years ago of quite a few successful business brokers – here are their responses. They were originally published in The Business Broker when it was a print publication. Subsequently, it was included in Wit & Wisdom of Business Brokerage edited by Connie Womack, an well-known industry veteran, now retired. The book is published by Business Brokerage Press (BBP). For information visit BBP online.
Have at least six months of working capital saved for the initial dry spell. Keep your overhead low.
Go to work for a successful business brokerage company to learn from the experts.
Have the discipline to make a firm commitment to put in full time and to take the time to learn the trade. Find a mentor if possible – be prepared to go back to basics constantly and persevere; realize it is a difficult but rewarding profession.
Get in the business only under a mentor, coach or franchisor.
Realize that if you do a great job for your clients, your rewards will be great.
The most important advice I have for anyone entering the business is that they gain knowledge of the business. Business brokers are counselors, salespersons, accountants, tax advisors, and friends to our clients. The most important word a business broker must always remember in a transaction is Control. Control comes from knowledge. Control starts at the signing of the listing agreement and ends when the broker gets paid. Knowledge comes from experience (this is the most expensive of all the business broker education alternatives as we usually learn after a transaction goes bad), books, periodicals, association conferences and courses, and from talking and networking with other business brokers. If you are knowledgeable about the entire process of a business sale you can control the transaction, close the sale, and provide a valuable service to your client.
Learn as much as you can, as quickly as you can, from as many sources as you can find. Be 100 percent honest with all clients and customers.
Patience – In this business you can’t push the buyer, seller, or the professional people who represent their varied interests; i.e. banker, lawyer, accountant. Things will get done when they get done. This does not mean you just sit back and wait. You can call for a status report, but be patient.
Have eight to ten months’ living expenses available and $2,500 to do what we call a “jump-start” mailing.
Listings are the name of the game! You have to learn and remember the basics, continue to grow, be passionate about the industry, have fun along the way, but if you can’t list you won’t be successful.
Find a “good” mentor. Attach to him and learn the business with him plus attending all the seminars you can.
Despite the advanced technologies, you must like being with people, and you must know your craft well.
Specialize in a specific industry or field and stay focused. Join trade groups, study industry publications to keep current, write articles and participate in seminars – SBA, continuing education, etc. Promote your services to attorneys and accountants. Pay your dues and you will be perceived as the “industry” expert in your market.
Patient, Persistent, Practical. Patient: Starting out can be very frustrating . . . many times, a buyer or seller will ask you what you know, what you’ve done or sold . . . In the beginning what are you going to tell them? Think about this and be prepared to lose listings to more experienced brokers until you develop . . . completed transactions. Persistent: This persistence may take the form of several visits, over several months and even years. You must be prepared to weather the storm of no business/closings for some time and be able to handle rejection, as you will be rejected by all sides, frequently in the beginning of your career. Practical: . . . do you have the desire to be in this business? Do you have the financial staying power to be in this business? Are you willing to learn and accept suggestions from fellow business broker?
