7 October 2024: Business Brokers – Finding Sellers
Before I founded Worldwide Business Brokers back in 2001, I had, over the years, owned several other businesses. I remember throughout the 1990s receiving regular, unsolicited faxes from so-called business brokers.
Some of these faxes – particularly with those with the salutation, “Dear Business Owner” – were outright insulting. None gave me the impression that the sender or the brokerage they worked for were professional in the least.
WHAT WE’RE LOOKING FOR: Commercial Landscaping Businesses: Revenue: $5M; EBITDA $500k. Location: South and Southeast U.S.
in**@Wo**********************.com
With the advent of email later in that decade, these solicitations began to fill my inbox – and, to my dismay, became more frequent. Even now we receive unsolicited emails from business brokers – often addressed to “Dear Business Owner” – asking if we’d be interested in selling and touting the professionalism of the business brokers and the number of buyers they have – apparently without even glancing at the name of our business: Worldwide Business Brokers!
This rant was prompted by an email I recently received trying to sell an online program styled “Prospecting for Sellers” – which is exactly what those faxes and emails asking me – “Dear Business Owner” – if I’d be willing to sell were.
Prospecting
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The activity of searching for something, especially prospective or likely customers, clients, etc.:
Calling expired listings, knocking on doors to introduce yourself, and placing cold calls from lists of names all come under the umbrella of prospecting.
Let me state up front that I don’t know the content of that online program but I’ve been in this business for nearly a quarter century at this point and I can state that “prospecting for clients” has always been a distasteful concept and considered such by many business owners. I acknowledge that the program may be extremely useful and structured in a way that its adherents are perceived as top of the line, highly trained and experienced professionals. But if that prospecting bears even the faintest relationship to the prospecting I experienced as a business owner, that’s not likely to be the case.
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Are you a business owner? A Realtor? A business broker? Are you looking for a business to buy? Do you have questions about the selling or buying process, the valuation, marketing the business, deal structure, financing or some other business issue?
You can find the answers in The Brokers Roundtable℠. Join seasoned business brokers, commercial real estate experts, valuation specialists, financing professionals, attorneys, accountants and all the other talent associated with what we do.
Sign up for a 90-day test drive at The Brokers Roundtable℠. Access the talent – or just see what’s going on in our industry!
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Most – though admittedly not all – business owners look at such prospecting emails, letters and cold calls as someone simply casting as wide a net as possible. The sender rarely knows anything about the dozens of businesses they blanket with these solicitations much less about the owner’s history, plans or intentions.
“Prospecting” suggest throwing a wide-enough net in the hope of catching some fish. But selling a business, especially one that the owner built and hopes to leave as their legacy, is highly personal. While this may not be the case with the smallest of businesses, in our experience it is universally what we’ve encountered with larger ones.
So, how does a business broker find selling clients and be perceived as highly professional, having an appreciation for the deep personal bond the owner has with not only the business but with the employees, customers and clients?
What follows is a truncated, “bullet-point” abstract taken from one of the lectures in Module 2 of our flagship course, “Learn How to Value and SUCCESSFULLY Sell Businesses“.
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Courses! Courses! Courses!
Many of you have asked if our Flagship Course, “Learn How to Value and SUCCESSFULLY Sell Businesses“, could be made available on a module-by-module basis. We’re happy to report that this is now possible.
We’ve broken our Flagship into six separate modules (or module groups) to give you all the flexibility you need to learn only what you want to learn – and we’ve moved them all over to the new Brokers Academy in The Brokers Roundtable℠ . The Flagship is still available but the modules are now available individually.
You don’t need to be a Member of The Brokers Roundtable℠ to access any of these courses but if you are, you’ll receive a 20% discount on the cost of any course you enroll in. If you’re not yet a member of The Brokers Roundtable℠, you can learn more – and get access to all the talent and resources – here.
Build Your Brand:
You’ve got to be perceived as highly professional. From your website, business cards and appearance to the professional education you have and the car you drive, looking like you know what you’re doing is step Number One. If your email address is
Th*******@Up*****.com
, you’re out of luck. If you show up at a meeting in shorts, flip flops and a T shirt from a 1983 Motley Crue concert, you’re going nowhere.
Exhibiting anything less than the highest level of professionalism will be insulting to the owner of a $3 million business. You might be the smartest and most highly trained broker in your region but if you aren’t perceived as professional, you’ll be wasting your time.
Teaching:
Develop and deliver a range of workshops and seminars. Hosting educational workshops can position you as an expert while simultaneously attracting potential sellers. Offer sessions on preparing a business for sale, understanding valuation, and navigating the selling process. Promote these events through local business networks and social media.
Though this approach helps establish your brand and professionalism, it has a major drawback. That is that, even if the workshop or seminar is focused on business owners and attendance is tightly controlled, many business owners are reluctant to attend for fear of telegraphing their intent to sell – a fact that one or more of the other attendees are very likely to mention to their spouse over dinner that night which will almost always end up making the rounds locally to the detriment of the business owner(s).
Networking:
This, ladies and gentlemen, is where the rubber meets the road.
Let me state the obvious: In order to find business owners – ANY business owners (most of whom are not, in fact, yet ready to sell) – you need to go where business owners congregate. DUH!
Attend trade shows, chamber of commerce meetings, and industry conferences. These events are great for meeting business owners all of whom will, at some point, consider selling.
Establish relationships with professionals such as accountants, attorneys, and financial advisors who often have clients contemplating the sale of their businesses. Offer incentives for referrals. Becoming a member of local business groups or associations can provide you access to a network of business owners.
Direct Outreach:
Essentially, this is the “prospecting” discussed at the top of this missive and something we discourage; except in one type of situation.
We use direct outreach when we are engaged as “buyer’s brokers”; that is when we’re hired by the buyer to find a specific type/size business and generally located in a defined geographical area. Under such circumstances we have a very powerful incentive to offer sellers: our client is paying our fee.
When we’re engaged by a buyer, our outreach to specific business owners is tailored to that owner. We can speak knowledgeably about the industry and many times about the owner’s business. We come off not only as professionals but having “chosen” them specifically as a worthy target of our client. You may be able to imagine how this makes a business owner feel as opposed to receiving the Big Net solicitation that starts with “Dear Business Owner…”
The Bottom Line
What is outlined above is not universal – it doesn’t pertain to all brokers, all situations and most specifically, all businesses. If you’re a volume broker, moving a dozen or so businesses every year, you’re probably dealing with smaller, “Mom and Pop” businesses; the Main Street Market. In our experience, both buyers and sellers of “Mom and Pops” are generally somewhat less sophisticated than those in the lower Middle Market – businesses with transaction values of several million dollars and more.
That is not to say that such small businesses and their buyers and sellers are not deserving of the highest level of professionalism; they are. But they generally have a somewhat different mindset about what we do or what they need when the time comes to sell. We’ve found that they often equate business brokers with real estate agents and, in fact, many will list their business will their favorite real estate agent (usually to their ultimate regret).
Prospecting for sellers using the methods described at the top of this post have, in the past, been perceived by many business owners as unprofessional, unfocused and impersonal. It may work is certain market segments but even if it does, it does not confer the term “professional” on the practitioner.
I’d like to hear from you. What topics would you like me to cover? How can we tailor these posts to be more useful to you and your business. Let me know in the comments box, below, or email me at
jo*@Wo*******************.com
.
If you have any questions or comments on this topic – or any topic related to business – I’d like to hear from you. Put them in the comments box below. Start the conversation and I’ll get back to you with answers or my own comments. If I get enough on one topic, I’ll address them in a future post or podcast.
I’ll be back with you again next Monday. In the meantime, I hope you have a safe and profitable week.
Joe
Searching For…
NOTE TO READERS: Our “Searching For…” feature has been moved to our online community, The Brokers Roundtable℠. It will appear there exclusively.
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The author is the founder, in 2001, of Worldwide Business Brokers and holds a certification from the International Business Brokers Association (IBBA) as a Certified Business Intermediary (CBI) of which there are fewer than 600 in the world. He can be reached at
jo*@Wo*******************.com