A business broker is an intermediary that connects a buyer and a seller and guides both parties towards reaching a favourable deal for everyone involved.
It can be an exciting and rewarding career path for those who possess the right attitude and skill set. There is no doubt that there aren’t many careers that allow you as much control over your own time and work environment as that of a business broker. Add to that no limitations on your earning capacity and working as a business broker becomes a very attractive career path.
Before you dive in and start ordering your new business cards, you need to learn what it takes to succeed as a business broker. Because, while there certainly are many selling points for this type of job, there are also some cons to be aware of. To be a successful broker, you need to be able to sell and sell well. The flip side of not being able to sell and sell well is having no income and, ultimately, no career.
So, how do you succeed as a business broker? First, learn the basics. Many brokers fail or walk away from a potentially rewarding career because they become disengaged from the basics. This includes focusing on four key areas: listings; customers; selling and negotiating and; professionalism.
1 | Listings
You need something to sell – a listing. This is the bread and butter of being a broker. Without listings your earning capacity is zero. There’s no secret to how to get listings – you have two options. First is face-to-face. Get out there in front of sellers and pitch yourself and convince a business owner to choose you over another business broker. Visit them more than once, be persistent but respectful and show them you will have their best interests at heart if they list with you.
Second, there is cold calling. Do not under estimate picking up the phone and talking to 10, 20, 50, 100 business owners – whatever it takes to secure that listing that will bring in the rewards. You don’t need all of them to say yes, you need a few quality listings that you know you can sell and sell well.
Quality v Quantity
The difference between a good broker who makes an average income and a great broker whose earnings are above average is quality listings. A good broker has 50 listings which are over-priced and lacking quality business information which a buyer looks for when assessing a business to purchase. These listings will sit idle for months with little to no activity because the broker has over promised the seller when it comes to the sale price and also the information that a buyer will ask for during the sales process, such as up to date financial information, a business forecast plan and documented processes is missing from the listing because the broker has not taken the time to gather it.
On the other end of the spectrum there are the great brokers. They have between 10 to 20 listings which have a realistic price tag and comprehensive information on a business’ systems, processes and financial records. These listings have a shorter shelf life because buyers will be lining up with offers. The end result for this broker is a greater income than the broker with the 50 average listings.
2 | Customers
A successful broker focuses on customers and building positive and productive business relationships with them. One way to do this goes back to the previous point regarding listings. Well managed listings that sell well equal satisfied customers. A satisfied customer is more likely to become a repeat customer and hence a broker will build a client base that will continue to bring in income well beyond the first deal that was done.
You also need to ensure that your interactions with your customer are always positive. This means being honest and up front with them, even when you may not always have good news. Ensuring that the communication between the two of you is always open and you keep your customer up to date every step of the way.
It is important here to remember that the seller is not your only customer. While you may be representing the seller in a deal, the buyer is someone that you should view as a potential future client. If you treat a buyer right during the sales process, and that includes being fair, honest and open in your communication with them also, then they may just keep in you mind when they one day decide to sell the business they just bought from you. And just like that, you’ve secured more income for yourself down the track.
3 | Selling and Negotiating
You’ve probably heard the term, ‘he could sell ice to an eskimo!’. This is the ultimate compliment you can pay to a business broker. While extreme, this saying lies at the core of what it means to be able to sell well. If you want to succeed as a business broker, you must have the skill and ability to convince people to buy what you have to offer.
Possessing sales skill involves making the potential buyer see what he or she stands to gain by buying your product and finally transforming the potential buyer into a keen buyer who is ready to sign a contract and make an immediate purchase. Part of selling is negotiating. While it would be nice and easy to have a buyer pay the listing price every time, it isn’t what happens in real life. You need to be ready to counter what a buyer offers by negotiating well but fairly and ultimately reaching a point where the buyer and seller agrees to terms that are favourable and acceptable to both parties.
4 | Professionalism
This may seem obvious, but many brokers fail because they lack professionalism when they are managing deals. Being professional in business includes acting with integrity, displaying fairness and being honest, ethical and up front. Having these values at the core of how you operate your business will ensure you gain the trust and respect of your customers, it will help your customers to succeed which ultimately means that you too will succeed.
In your career as a business broker you will be faced with many different types of deals, each of which will come with its own set of challenges and obstacles to overcome. If you are self-motivated to succeed and have a passion for sales you will thrive in such an environment and by focusing on the above four key areas – listings, customers, sales and negotiation skills and professionalism, you’ll be well placed to enjoy a long-term successful career.