18 Nov Preparing for the Complexities of the Brokerage Industry
In our recent webinar with renowned Canadian business intermediary and business broker Doug Robbins, a good deal of important ground was covered. One topic that played a key role in Robbins’ webinar was the complexity of the business brokerage industry. Let’s explore some of Robbins’ key thoughts on what you need to know to successfully navigate the industry. The webinar is also available online here.
Robbins explains that getting involved in mid markets is shockingly complex. The fact is that most new business brokers are ill prepared for the tremendous complexity that they will face once they enter the industry. For example, Robbins points out that there are literally tens of thousands of different kinds of businesses that can be bought and sold. The ramifications of this fact should be obvious. Yet, this situation only serves to underscore the true complexity involved in being a business broker or M&A advisor.
Next on Robbins complexity list is having to deal with lawyers. While there is no doubt that lawyers are necessary in order to ensure a smooth transition, that is not the entire picture. During his decades in the business, Robbins has concluded that roughly 40% of lawyers who do business deals are simply not qualified. Not too surprisingly, this can cause many nightmares and a good deal of chaos.
A third complicating factor that business brokers should keep in mind is that of valuation experts, or as Robbins calls them the “so-called valuation experts.” Robbins points out that a great many people believe themselves to be experts in the field Yet, at the end of the day, don’t truly understand how to properly valuate a business. The ramifications of an inaccurate valuation are indeed immense. A client who has a completely inaccurate idea about what their business is worth is likely to be a difficult client. Simply stated, inaccurate valuations can do more than harm the client-business broker relationship. Inaccurate valuations can also derail a businessowner’s chances of successfully selling his or her business.
Thanks to his long and very productive career, Robbins realizes that there are many overlooked obstacles that can cause chaos for business brokers and M&A advisors. Oftentimes, people new to the industry are simply not ready for the array of information and complicating factors that may be thrown their way. If you are looking to achieve true and lasting success, you will be well served to remember that achieving success means surmounting a surprisingly wide-array of obstacles.