30 Mar Sellers Must Understand the Numerous Variables Involved in Selling
In our previous article, “Establishing Your Value in the Eyes of Clients,” we discussed the webinar “Accepting Offers Instead of Selling Businesses Part 2”, which covered some of the basics for business brokers looking to establish their value, trust and competency in the eyes of their clients. In this article we will continue building on the thoughts raised by our guest and business broker legend, Doug Robbins.
Establishing trust and competency is key to helping win over clients and, in turn, helping them get their businesses sold. From Robbins’ perspective, it’s not truly possible to start finding buyers until you know what a given business is worth. In order to know a business’ value, a complete analysis must be performed.
Next, of course, you must understand the opportunities as they relate to the market as well as many other factors such as client’s family situation, the business situation, the current state of the economy, supply disruption problems, the state of the employees, and any geopolitical situations that could impact the business and a good deal more.
The state of the management team is another area that must be evaluated. Robbins pointed out, “Often we’ll bring a psychologist in to look at the management team. In part, we do this to see how they’re going to fit with the client.”
Likewise, a seller must realize that work must be done on their advisory board so that the right kind of competent people are assembled to help the business prepare to be sold. It is pivotal that you work to educate the client as to the number of variables involved in buying and selling a business. The process of buying or selling businesses is not a one-dimensional, but instead involves many different and often interlinked parts.
Of course, finding the right buyer is another part of the process. Demonstrating to sellers that you understand what is involved in the process is another critical point. Sellers all too often enter the selling process not realizing that it is common for 250 buyers on average to look at a business before a sale takes place. Finding qualified serious buyers couldn’t be any more important.
In the end, every business has areas for improvement. Finding those areas of improvement can help make a business more appealing to prospective buyers. Throughout his career, Robbins has learned that there are typically eight fundamentals that a business needs to have in order to be successful.
“Most business owners are really good at two or three of these things, but I’ve never met a single business owner who was good at all eight,” he said. “The key point for business brokers is to identify these deficiencies.”
Your job is to guide your clients through the process while simultaneously providing actionable education. This will prompt your client to realize the true benefits that brokerage professionals bring the table.
