Business Brokers: The Value of Networking
Business brokers… what’s the value of networking?
It’s pretty hard to overstate what networking is worth to us.
Our Course, Learn How to Value and Successfully Sell Businesses, has an entire lecture devoted to networking for business brokers. And networking through the right groups is what will jump start your business brokering.
There are three time-tested expressions to remember about brokering businesses:
- Every business that doesn’t fail will eventually be sold.
- People will do business with people they know long before they’ll do business with someone through an ad.
- Business brokers need to be where the business owners are.
For business brokers, networking can be compared to “preparing the soil” in a field we plan to cultivate. Networking gives us professional connections, establishes trust, leads to new opportunities and provides the most valuable advertising of all; referrals and word-of-mouth.
My Networking Experience
I’ve always been apprehensive about networking.
Like a lot of people, I was fearful of public speaking and suffered from “imposter syndrome”, a psychological condition in which someone doubts their own skills, talents, or accomplishments and has a persistent internalized fear of being exposed as a “fraud”. This was a problem for me from my school days through my early business career.
But after a few opportunities to speak about the subject matter I was invited to discuss, I started to feel a bit more confident that I probably had something to contribute to whatever group of people I was speaking to.
Though that confidence continued to grow over the years, when I started Worldwide Business Brokers back in 2001, I felt like I was back at square one again. But once I earned my CBI designation (Certified Business Intermediary), I realized that, unless I was in front of an audience of fellow CBIs, I knew more than anybody else in the room about the subject of valuing and selling businesses.
But I also found it difficult to justify the amount of time I needed to invest to effectively network.
However, in the course of my social interaction I found that my “accidental” networking – casual discussions over a beer or lunch – eventually led to a number of referrals and the value of networking as a business broker became enormously apparent.
Our course, “Learn How to Value and SUCCESSFULLY Sell Businesses“, teaches you how to value and sell businesses.
Become a Professional Business Broker…
Subsequently, I started networking with a vengeance and over the past decade or so have found a number of groups that are very fertile ground for business broker networking. And though we do a deep dive on this topic in our Course, I want to describe a few of the groups we recommend and why.
Like realtors, business brokers almost always “work local”; that is they work their local market. That market might be Los Angeles or Lisbon or Guatamala City – or smaller suburbs such as La Jolla, Amadora or Chimaltenango – but it is unlikely that a business broker will be working the Los Angeles market and the Portland market at the same time.
So, from a networking standpoint, a business broker needs to be in front of the business owners in their market. Here are some of the groups we’ve used over the years that have kept us in front of the business owners that were in the markets we served
We’ve launched a coaching program specifically tailored to Realtors that want to sell businesses, business owners and to anyone that wants to become a business broker.
If you’d like to learn more, email me at jo*@Wo*******************.com
Business Networking International. BNI is the world’s largest networking group, and one I highly recommend. BNI operates on the philosophy of “giver’s gain,” in which the more referrals you give to fellow members, the more referrals will be given back to you.
There is a BNI in almost any city – and many towns – in the world. You probably know one or more members of your local group. Find out when they meet and go. I suspect you’ll see the benefits early on.
LeTip. LeTip is smaller than BNI, but works off the same principle: referrals instead of leads. How do they differ? A referral happens when someone you know gives you the name of someone they know who is already interested in buying from you. The customer already trusts you, because their friend recommended you. Leads come from ads and the people that respond to your ads don’t yet have the trust in you.
Convention and Visitors Bureau. Your local CVB is tasked with catering to tourism, so as a business broker that doesn’t serve tourists you might not be a member. Join anyway, and become active. You’ll meet local business owners that cater to the tourist industry and other business owners that support them.
Women in Business Networking. If you’re a woman, don’t pass up an opportunity to join WIB. Women In Business allows you to work with others to achieve your goals. Given that I am of the wrong gender, I don’t have any personal experience with WIB, but many women swear by it.
Many groups and associations welcome “associate” members. I don’t know if WIB chapters welcome male associates, but it’s certainly worth asking.
Local Merchant Associations. Be on the lookout for local trade, merchant and industry-specific associations you can join. The Wisconsin Restaurant Association in Milwaukee or the Tidewater Builders Association in Chesapeake, VA, are a couple of excellent examples. Members are business owners.
The American Society of Heating Refrigeration and Air Conditioning Engineers (ASHRAE) has chapters in 152 countries. It’s members are companies that specialize in the design and installation of HVAC systems and the vendor companies that supply those members.
Chamber of Commerce. I assume you’re a member of your local Chamber but how active are you in it? Do you attend meetings, volunteer for committees or otherwise play a role as an active member of the group? If not, you’re missing a ton of local opportunities and connections that can supercharge your business.
Not in the United States? There are U.S. Chamber of Commerce chapters throughout much of the world with representation in pretty much all major cities. Joining will give you access to a wealth of networking possibilities not only to U.S. business owners and representatives but also to local business owners that do business with them.
Rotary International. Rotary International is a service organization, but look at the membership list of your local chapter and you’ll see it’s packed with the names of business owners of all types and sizes. Local chapters are usually pretty small but that allows you to have an outsized impact. It also allows you to join more than one chapter. (There are three chapters within 20 minutes of my office!)
These groups are all made up of business owners. Join them. Go to the meetings and listen to the speakers. In fact, after a while, you’ll be asked to speak to the members. And while that’s all well and good, the true value of membership is realized over beers after the monthly meetings.
The Bottom Line
For business brokers, the value of networking is really impossible to measure.
We need to be in front of business owners and the surest way to accomplish that is to be in the groups they join. Business owners associate with other business owners. They talk over issues that impact them all and they do so regularly.
Most of the groups I mention in this post have modest or zero membership costs. But any costs they do impose will be dwarfed by the benefit you’ll receive.
Our local chamber has an annual membership fee of $150.00 for an individual business owner. If we sell one Main Street business as a result of our membership, our fee can be anywhere between $30,000 and $90,000. In my book that’s one hell of a return on our investment.
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.