18 Nov Factoring in Client Needs and Psychology
Business Brokerage Press held a recent “Business Advisory Reboot” webinar with Robbinex® founder Doug Robbins. Robbinex® moved from being a mainstream brokerage to a lower middle market advisory firm. During this webinar, which can be accessed here, Robbins outlines what you need to know to achieve success in what can be a demanding industry.
Robbins points out that only 10% of business brokers actually say in the industry for longer than 3 months. As Robbins stated, “if you’ve got a broker that’s been in the business for five years or ten years, then you’ve got yourself a winner.” The bottom line is that a lot is involved in being a business broker. It is a demanding profession that can yield great rewards while simultaneously helping countless people. But at the same time, you need to be aware of the challenges that you will face when entering the profession.
As anyone who ventures into the realm of being a business broker or M&A professional quickly learns that it means wearing many different hats. Robbins has concluded that in order to be a successful business broker, it is necessary to not only wear many different hats, but it is also important to surround oneself with good people and delegate as well. Or as he phrased it “mergers and acquisitions is like a team sport…you’ve got to play as part of a team.”
The psychological aspect of being in the industry simply can’t be overlooked. In particular, Robbins focuses on client psychology. During his webinar, Robbins focused on the psychology involved in successfully working with a client. A key part of this message is that you have to remember that for most of your clients, buying or selling a business is a major, and potentially life changing, event.
Robbins tells the remarkable story of a client who attended one of his workshops and then began working with him. Robbins impressively helped the client take his company from a hundred thousand dollar a month loss to a successful deal worth $7 million dollars. And yet, this impressive success story took a shocking turn. Just 3 months later, Robbins received a phone call telling him that the man had attempted suicide. As the facts unfolded, the picture came into focus. The business was, to a large extent, the client’s entire life. His social life even revolved around his employees, customer relationships and more. Once his business was removed from the equation, the client’s social life dramatically contracted. He became depressed and he began drinking.
This unfortunate story illustrates Robbins’ point that it is essential that business brokers help their clients prepare for life in the aftermath. Selling a business is a complex process, and the emotional aspect of doing so shouldn’t be overlooked. Being a business broker or M&A advisor means confronting a range of challenges. Many of those challenges are not necessarily obvious to the outside observer.