10 Nov Understanding Human Psychology
In our previous article, we covered Doug Robbins’ thoughts on the tremendous power of education. This topic was discussed by Robbins in our last BBP webinar. As he noted, it is through educating sellers and their supporting professionals that Business Brokers and M&A Advisors are able to clearly showcase how they can help sellers achieve optimal results. In this article, we will explore more of Robbins’ key thoughts on how Business Brokers should interact with their clients.
Robbins notes that “most people don’t realize that you can easily spend 600 or 800 hours on the sale of a midsize company.” A very commonly held belief, he points out, is that selling a business is as easy as “placing some ads.” However, of course, the truth is much different.
From Mr. Robbins’s perspective, psychology and personality traits plays a critical role in the Broker’s process of selling a business. In particular, he notes that client psychology must be addressed in detail. Not every business owner is good at every aspect of running their business. Some business owners may be excellent at day-to-day operations, while others excel at the making of the product or the delivery of their service. In short, personality type always plays a role in the functionality of a business.
Or as Robbins notes, “People have different skills and attitudes.” It is his view that “people affect virtually everything…psychology becomes a very important factor.”
Robbinex® has been using psychological assessments for over thirty years. “We use psychological assessment forms regularly. We use them for our employees and we use them for our clients, their partnerships, and more.”
In using psychological assessments, it is possible to do what Robbins calls “the identification and facilitation of expertise.” This is when problems are identified, and it is decided who has the right personality type to run a given business.
He cites a specific situation where a business owner wanted to sell his business out of a fear of dying. Many of the owners’ relatives died at a young age and he was afraid that his time was up. Through his work with the psychologist, the problem was identified and that problem was his diet, which was very heavy on alcohol and meat. The business owner changed his diet and is alive fifteen years later. Robbins states, “The power of seller psychology is really important. Understanding the problem and then working to fix it is key.”
A great Business Broker or M&A Advisor is one who not only understands that buying or selling a business is a very complex process, but also who can effectively communicate this fact to sellers and their advisory team. Fear can play a large role for both buyers and sellers alike. Buying or selling a business is an absolutely huge decision. You should never overlook the powerful role of human psychology in this process.
