As the end of our first financial year in business approaches, Paul and I continue to get referrals from people we have dealt with in the past. In the last month or so, with the weather getting warmer, it has increased dramatically. It got us wondering, do business owners wishing to sell their business want to be referred to a company or person within a company?

I have been asked to write a post on what business owners should expect from a broker/brokerage and I think that this is a good place to start. It is very difficult for a referee to, with a clear conscious, refer any party to a company. A company by its nature can often be very inconsistent as the famous saying ‘a chain is only as strong as its weakest link’ illustrates.

Most brokerages operate with the bums on seats mentality and in a lot of cases the 80/20 rule is pushed out to 90/10. So if you are recommended to a company it is entirely possible for you to be allocated to one of the 90% rather than the 10%. The choice often isn’t yours because their internal allocation policies will dictate who gets the lead rather than the most suitable person for the job.

The business sales arena is a people game not really like any other business. You need to be a person who understands the machinations of the businesses you look at, a good understanding of the numbers side of the business, where it sits in the market it operates, the ability to accurately gauge its prospects, an ability to market the opportunity, offer leadership to the process, but most importantly you have to be able to manage all the personalities that are involved in the transaction.

It is difficult to find an individual that can offer the necessary experience and qualities required let alone try to have 20 or 30 of them together in an office at any one time. This is where Switch Business offers real value to our clients because Paul and I work on all our transactions together and ours skill-sets are complimentary. Paul is exceptional at the details side of any transaction whereas myself I am more of a big picture person.

There is only one fee to be paid but you get the both of us working on your business exit.

This is a very important decision for a business owner to have to make. Oftentimes the business in question is that owner and his/her family’s greatest asset and to be asked to entrust it to someone who you have been allocated too, is a very risky proposition indeed.

If you are looking to sell your business then I would look for an individual you can trust, hopefully that has been recommended by someone that you know/trust. If he/she works for one of the bigger companies that is fine, at least you made to choice.

Too often in our industry the brokerages make it difficult for business owners to find out anything about the brokers that they employ. In a lot of cases the brokers aren’t mentioned on web-sites or any marketing material because these companies are concerned that the broker might leave if they make a good name for themselves. A little short sighted and paranoid probably because we have found in our experience that calls come in to either Paul or I based on the experience we have listed on our website. The classic example would be any owner of a Plastics business would call Paul because he has owned one and also sold several.

Sounds logical I suppose but logic is not always apparent in our industry.

You only get one opportunity to exit your business efficiently and effectively. There are a lot of things that can go wrong if the process is not run by someone that knows what they are doing. If you are looking around for a broker then I would recommend to you to look for an individual rather than a company. Find somebody who you like, you think understands what is important to you and your business and you think can effectively represent your business to the market. It is too important a decision to let it be allocated to a broker that you may or may not suit the transaction.