Successfully solving a Rubik’s Cube requires an individual to match the color of nine separate components on each of the six sides of the cube. If one of the sides is not uniform in color the puzzle has not been triumphantly completed. Successfully facilitating the sale of a privately held company or family business similarly requires a professional intermediary to get six different domains to a level of completion/disclosure so that the seller and buyer involved in the transaction view them as satisfactory.
The six domains that need to be addressed to a level of satisfaction of the parties in a business purchase and sale transaction are value, legal, due diligence, real estate, finance/investment, and business model continuity.
As the President & CEO of the largest & oldest business brokerage firm in the Pacific Northwest, I am frequently brought “Rubik’s Cubes” by my large team of intermediaries in situations where despite their best efforts to solve the puzzle they have red squares in a dominantly blue field and white squares where the objective is to get a green face. I welcome and enjoy this collaborative opportunity as do many of IBA’s past Broker of the Year winners (https://ibainc.com/about-iba/broker-of-the-year/) and senior M&A intermediaries in wanting to help their colleagues maintain IBA’s market leading level of product quality and achievement. It often takes a village to do something right. Broker Note: When selecting a business broker to sell your business, it is prudent to inquire about the size and level of experience supporting the professional at the firm. Having a sounding board is valuable whether it is a head coach consulting with their assistants before selecting a late game play, an engineer wanting a second look at component integration before building a new prototype, or a computer programmer wanting to see if their code is at peak efficiency. Many business brokerage firms only have a couple of people on their team and limited resources. IBA with its over 4300 successfully completed transactions is uniquely positioned across of spectrum of industries, geographic areas, and enterprise values to possess confidential information related to priorly employed solutions.
A Grand Master looking at a chessboard can commonly see a pathway to victory. A business broker with years in the profession (I am at 31) and a large body of successful achievement negotiating/facilitating business sales (I have over 300 closed transactions with my signature on them) can often identify a way to get the parties to “YES”. Why are both of these people consistently successful? I believe it is because of four common attributes.
Knowledge – The best decisions are made from a foundation of knowledge. A top tier business broker should possess accounting, investment, finance, market, tax, insurance, legal, real estate, business management, marketing, human dynamic, and psychological knowledge. It is equally important that they have insatiable curiosity, as what was true today (e.g., interest rates, tax policy, legal precedent, etc.) could be different tomorrow. I personally embrace the wisdom of Albert Einstein who said, “I have no special talent, I am only passionately curious.” Broker Note: The classic television game show, Who Wants to Be a Millionaire, offered contestants a lifeline in the ability to call a friend for help. No one knows everything. Smart people surround themselves with intelligent, experienced people. A valued attribute of any business broker is the size of the their network of professionals they can tap into as resources. An easy way to assess a person’s network is to look them up on LinkedIn. How many connections do they have? People do business with people they know, like, and trust. It takes time and effort to grow a professional network on LinkedIn. IBA’s VP of Business Development, Curt Maier, coined the phrase your Net Worth is your Network. From the oldie, but goodie category here is an article he wrote multiple years ago for our blog, which still rings true today. https://ibainc.com/blog/curt-maier/net-worth-network-the-foundation-of-a-successful-professional-personal-life/ I challenge anyone to find someone in the business brokerage world with a larger professional network than Curt Maier (https://www.linkedin.com/in/curtmmaier/).
Experience – Knowledge is the foundation, applied knowledge creates experience. It is one thing to theoretically know how to perform and act, it is another to do it in the real world. As Helen Keller famously said, “Life is a succession of lessons which must be lived to be understood.” I would much rather be guided down a new path in an alien environment by someone who has traveled the road before than someone who is on the journey with me for the first time themselves.
Skill – Most people have swung a baseball bat and tried to hit a ball in their life. Almost 17 million did it in the United States in 2023 alone, https://www.mlb.com/news/youth-baseball-participation-high-2023. Even given this large number of people doing the activity, Ted Williams, a former Red Sox great, is quoted as saying “The hardest thing to do in all of sports, without question, is to hit a baseball.” Is this true? Last year, the average major league baseball player hit .243 (https://www.baseball-reference.com/leagues/majors/bat.shtml). That means they were successful in their effort less than 1 in 4 times. The top batter in MLB in 2024, Bobby Witt, Jr. hit .332 (https://www.espn.com/mlb/stats) or got a hit approximately 1 in 3 times he faced a pitcher. Ted Williams had a career batting average of .344 after over 7000 at bats against pitchers. In 1941, he hit .406, the last player in Major League baseball history to hit successfully at least 2 out of 5 times for a season (https://www.baseball-almanac.com/hitting/hi400c.shtml). What did Ted Williams have 84 years ago that no professional baseball player has equaled, SKILL. What is achieved in a pressure situation under scrutiny is the difference between mediocre, average, and exceptional performance in any profession. Skill matters in achieving success. Business sale dealmaking whether it is on Main Street as a business broker or involving publicly traded companies by an investment banker requires knowledge, experience, and skill to do at a high level with consistent success. Businesses do not sell themselves. Many can sell a business to an all cash buyer who is highly motivated if the seller is eager to retire. A significantly lesser number get the deal done when the attorneys are in confrontational posture, a bank is doubting they want to finance the transaction, and one or both parties are getting cold feet on doing the deal. Expect the best, but prepare for the worst is a proper mindset for business sales. Broker Note: Two undervalued skills possessed by top tier mergers & acquisitions intermediaries are the ability to actively listen and have empathy. The founder of IBA, Bill Ososke, told me in my first training session with the firm in 1994 that I had two ears and one mouth, I should always listen twice as much as I talk. The lesson has never vacated my mind since that day. The second skill is empathy. A strong negotiator has the ability to assume the mindset of the parties. Can they achieve a positive outcome for a sale side client that has cancer and knows they are dying? Can they get a buyer to reconcile their lifelong dream of becoming an entrepreneur with their fear, enhanced by their spouse, that a significant amount of their savings will be lost and the college education of their children could be put in jeopardy. These situations exist everyday in the business brokerage world.
Resilience – All chess players know that their queen is the most powerful piece they possess. Losing a queen early in a match can be a significant psychological blow to many players. How they respond to that loss, in terms of reformatting and executing future strategy, is the difference between a good and great chess player. The same is true for a business broker. The sale of a business will have periods where progress is smoothly made and others where it will be a slog through deep mud. The ability to employ knowledge, experience, and skill with a positive attitude and resilience even during periods of confrontation and/or analytical criticism as a problem solver is a separation point between poor, average, and master negotiators.
Emotions often impact the ability to successfully negotiate desired outcomes. Negotiating directly on your own behalf is rarely the best posture whether it involves diplomacy, legal agreements, or mergers & acquisitions. It is frequently prudent to put a deal in the hands of the professionals with appropriate knowledge, experience, and skill.
I believe Christopher Cross set the tone correctly for professional negotiators experiencing deal turbulence in his song, All Right, in its opening stanzas.
I know, I know what’s on your mind
And I know it gets tough sometimes
But you can give it one more try to find a reason why
You should pick it up, ooh, and try it again
‘Cause it’s all right I think we’re gonna make it
I think it might just work out this time
It’s all right, I think we’re gonna make it
I think it might work out fine this time
The next time you are in a challenging negotiation, I encourage you to have an appropriate professional on your team and listen to this song before going back into the fray in pursuit of a desired outcome. https://youtu.be/yGKeY0NfT84?si=8VKb21F-NTu1VTiF
If you want to add a knowledgeable, experienced, skilled, resilient business broker to your team for the sale of a business in Washington or Oregon, IBA would welcome the opportunity to interview for the position. All conversations with IBA are held in strict confidence.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.