29 Mar Tools of the Trade with Robbinex® Founder Doug Robbins
In our last Business Brokerage Press Tools of the Trade webinar, we were joined by regular guest and contributor, Doug Robbins. Robbins, who founded Robbinex® in 1974, is a legend in the intermediary and business broker world. With over 50 years of proven experience, Robbins has done wonders to support the M&A profession and knows exactly what it takes to sell a business. In this webinar he shared insights on some of the 25 proven success tools that he has developed since 1974.
Optimal Communication
Robbins pointed out that communication is vital to success. He noted, “Most people don’t do a good job of communicating…You need to be able to communicate your success, you need to be trustworthy and honest and communicate effectively.” Communicating to prospective clients that you have value comes in many forms.
Essential aspects include:
- Being part of organizations
- Having licenses
- Demonstrating that you are educated in the field
Robbins notes that he joined the IBBA in 1988. Over the past 5 decades, he has completed 500 transactions and over 2000 assignments. Being able to point to key facts serves to boost the credibility of any business broker.
Properly Allocate Your Time
Throughout his many webinars, Robbins has outlined the importance of using one’s time as well as possible. It is important for business brokers to realize that potential sellers will unintentionally waste their time, as sellers are frequently too engaged in the day-to-day operations of their businesses to stop and properly think about selling.
A seller may take years before they are truly ready to sell. Robbins uses an experienced sales team that has two parts. He has sales people that just sell businesses and salespeople who are focused specifically on services. This division of labor and expertise helps to focus the sales process.
For Robbins, the single largest problem that business brokers face is having to work with lawyers that are not competent to sell a business. He comments, “Only 1 lawyer in 20 is competent to sell a business.” Robbins has developed a range of strategies for dealing with the problems that lawyers represent.
Protect Your Best Interests
In a critically important point, Robbins pointed out that the average business owner will own a business for 25 to 35 years, which means that only a mere 4% of business owners are ready to sell at a given time. “So, suddenly there’s not that many potential clients, and most people who do come out to sell, about 60% to 75% are sold directly through an accounting firm or their golfing buddy. They transfer to the next generation or a key employee, so at the end of the day there’s only about 1% available to brokers,” Robbins concluded.
His point illuminates the challenges that business brokers and M&A advisors face when securing clients who are actually ready to sell. Robbins also notes that often sellers will pull out of a deal altogether even after a business broker has spent hundreds of hours preparing for a deal. In short, finding not just clients but the right kind of clients is imperative. For this reason, it is vital that business brokers follow Robbins’ lead and take steps to qualify their clients.
There are many steps that business brokers and M&A advisors can take to protect their own self-interest. In our next article, we will continue to explore Robbins’ insights that business brokers need to know.
