Seth Rudin and I recently went to watch our IBA colleague, Jeff Bryan’s son, Colton, play for the 4A KingCo Championship. The game was a battle between two heavyweights where the Eastlake Wolves scored a go-ahead touchdown and two-point conversion with 31 seconds left to take a late lead.  However, Colton’s Bothell Cougars, showing the heart and ability of champions, were not going to be denied their first conference championship that day in five years as they marched down the field beating the clock to kick a game winning field goal as time expired (https://www.si.com/high-school/washington/3-games-you-should-not-have-missed-in-week-8-of-washington-high-school-football-01jb5g7azk6j). It is one thing to talk about winning when stress levels are high and little margin for error exists for the players on the field, it is another to execute and perform in those conditions.   I tip my hat to the Bothell Head Coach, Tom Bainter, his staff, and team for their achievement.   The benefits of the day and being on that team will likely impact the players for the rest of their lives.  Few venues teach the concepts of teamwork, competition, hard work, preparation, and the reality that even when you do everything right you can lose better than competitive sports.

IBA, similar to an athletic team, is judged almost exclusively on our performance in the field as a business brokerage firm.  Our team of knowledgeable, experienced, highly skilled M&A intermediaries are hired by their “sell side” clients to facilitate business sales for strong market values in confidential environments employing best practices with the minimum amount of turbulence possible for employees, customers, and vendors.  If a sale is not completed, due to our 100% paid on performance compensation business model, IBA will not be compensated for our time, effort, and resources spent unless we perform to the satisfaction of our clients.  Few of our peer competitors in the M&A world have this level of confidence in their abilities. IBA is happy to work in this demanding, high expectation environment. It is a world in which IBA business brokers thrive in as professionals. The firm has sold more businesses than any other business brokerage firm in Washington & Oregon since 1975.  It is a marketplace where IBA has sold more businesses than any other business brokerage company in the Pacific Northwest each and every year this decade.  This elite level of performance was recently documented in the Puget Sound Business Journal when IBA was rated the 21st fastest growing company in Washington (https://www.bizjournals.com/seattle/subscriber-only/2024/10/25/fastest-growing-private-companies-in-washington-state.html).

In the selection of a business broker, although important, it is not in the pricing or marketing of a business that the champions are separated from the pack. The place where the quality and skill level of a business brokerage professional is demonstrated is from the time parties get to “YES” on a Letter of Intent until the deal successfully closes escrow with the seller getting paid and the buyer getting the keys to the company.  In this time period, there are numerous areas where a broker with knowledge, experience, and skill can successfully move the chains forward toward the endzone and a less talented intermediary fumble the ball putting victory in jeopardy.  The following are four of them:

Due Diligence – The objective of due diligence is to create an environment of full disclosure, so the buyer can enter ownership with “open eyes” and the seller can mitigate post transaction liability.   Most deals have multiple tiers of due diligence including financial, legal, insurance, equipment, and facility.  An experienced business broker has the ability to guide this process so the relevant information is shared and the buyer does not get “paralysis by analysis” failing to move forward through this stage. Nothing is worse than a transaction where the wrong buyer is selected and the deal is lost in due diligence because the party balks at transitioning from the dream of entrepreneurship to assuming the responsibilities of the captain’s chair.

Legal –   Attorneys make money through confrontation. A negotiation that takes fifty hours earns a lawyer more than one that takes ten.  A business broker who is compensated for successful completion of a sale is not looking for confrontation. They are looking to problem solve based on knowledge of “market standard” terms used by attorneys in prior similar successfully facilitated industry transactions that appropriately protect both parties from unknowns.  Few things are worse as an intermediation outcome than having a willing buyer and seller who want to complete a transaction in a “good faith” negotiation and having the deal fail because attorneys overly invest their egos in verbiage or sell an inappropriate level of fear. A knowledgeable, experienced, highly skilled mergers & acquisitions broker has the ability to communicate directly with both parties and get parties to conceptually agree on business concepts that are real world solutions to possible issues rather than legal theoreteicals based on worst case scenarios that are unlikely to ever occur.  It is a commonly known truism that if entrepreneurs listened to their attorneys all the time that company growth and profitability would be diminished.

Finance –   If a buyer does not have the capital to complete a transaction, nothing else matters.   Many times a transaction will succeed or fail based on the business broker’s ability to find the money necessary to complete the sale.  It is prudent to always engage a business broker with a large Rolodex of bankers.  Credit underwriting and loan appetites vary greatly between lending institutions. The ability to address credit approval concerns and keep banks performing on an established timeline varies greatly between business brokers.  Insider Tip:  Bankers are often compensated based on the number of loans and dollar value of loans they generate annually. They will often work harder to deliver loans for the business brokers who send them a higher volume of loans than low performing business brokers.  It is often prudent to work with business brokers who are VIP’s escorted to the front of the line than ones who rarely engage with a banker. If a business broker only introduces a buyer to one bank, the buyer should ask why. Banks often compensate business brokers for loan generation.  This can result in higher interest rates and fees for the borrower.  It is always prudent to shop for a loan as a consumer.

Landlords – In most states a real estate license is required to negotiate and facilitate new leases and assignments for other parties.  100% of IBA business brokers hold real estate licenses in one or more states.  It is best practice for a business broker to also be a credentialed real estate broker.  If your business broker does not have an active real estate license they should not be providing advice related to facility lease negotiations.  Navigating the assignment of an existing lease or negotiating a new lease that will satisfy a buyer and/or lender can potentially have catastrophic implications for a transaction if not done correctly.  It should not be overlooked that a landlord generally does not care if a transaction happens or not.  They are primarily concerned with protecting their own best interests as the property owner.  Factors ranging from relevant experience to signature power can determine whether future occupancy is offered to a potential buyer of a business.  Persuasive, professional messaging by an experienced, knowledgeable, highly skilled commercial real estate broker can be the difference between obtaining a satisfactory lease and completing a transaction and deal failure.  It is prudent for a seller before ever reaching an agreement on a LOI to vet a buyer’s personal financial statement or signature power (https://ibainc.com/blog/gregory-kovsky/why-a-business-owner-should-review-the-buyers-personal-financial-statement-or-balance-sheet-before-starting-negotiations/). There is no reason to start a process that cannot be successfully finished.

Two common quotes heard from IBA business brokers are “Businesses do not sell themselves” and “There is no dumb money”.  Most business owners will only be involved in a business sale once.  The question to ponder is do you want Andy Reid & Patrick Mahomes calling and executing the plays with your personal Super Bowl on the line (https://youtu.be/arUk2qurfNI?si=By7ewJb0wH69MJR4) or Russell Wilson and Pete Carroll (https://youtu.be/U7rPIg7ZNQ8?si=EZ5dsmN2s42QQEtA). Knowledge, experience, and skill matter in selling a business.

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, legal, accounting, banking, and wealth management 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”.