Why Knowledge, Experience, & Skill Matter in Selecting a Business Broker?

Aug 24, 2021

A person can learn an enormous amount from the experiences and knowledge of others.  How many people can say they learned to tie their shoes on their own? Very few.  Almost universally shoe tying is a mentorship taught skill. Firsthand experiences can be a fantastic learning environment, but they can also include turbulence and disaster.  The sale of a business is commonly a once in a lifetime activity.  It is an activity with significant financial implications and frequently mentally & emotionally taxing as it involves for most entrepreneurs the conveyance of their life work with the future of long-term relationships with employees, customers, and suppliers in the basket.

When as a nearly thirty-year professional mergers & acquisitions intermediary who has successfully facilitated over 300 deals personally I am asked to describe my role in a transaction to a potential client, I traditionally say, my job is to be your trusted guide through the sale process allowing you to make intelligent decisions from a foundation of knowledge in route to achieving the best possible outcome available in the marketplace.  This comprehensive answer says an enormous amount in a few words.

There are few professions that require the spectrum of knowledge, experience, and skill necessary to be successful as that of a business broker.

The knowledge needed by a business broker to practice the trade at a high level is encyclopediac touching on at least seven high education/skill professions on a limited basis.  The knowledge needed to be a top tier mergers & acquisitions intermediary includes the ability to value privately held companies (Expertise possessed by accountants and appraisers); the capacity to create a marketplace for the business (Talent usually possessed by marketing and advertising professionals); the skill to persuasively present a sophisticated, nuanced product to a buyer and get parties to “Yes” in a big ticket transaction that is likely bigger than either party has been involved in previously (Ability held by top salespeople worth their weight in gold to organizations); the capability to communicate, understand, and explain legal concepts against a backdrop of what is standard and common (Commonly the domain of attorneys); source funds for the buyer (Banking profession expertise); value and facilitate real estate transactions involving owner occupied property (Realtor activities); and facilitate due diligence, contract assignments, licensing, and the large number of administrative activities required for completion before a transfer of ownership of a privately held company or family business.

Knowledge available to an individual business broker to provide a client can either be possessed by them personally or through collaboration/consultation with firm colleagues. The best firms have depth in their team, longevity in their staff, and systems in place for continuing education.  In addition to the knowledge associated with general transaction facilitation outlined in the last paragraph, another important area of knowledge relates to specific industries.

IBA, as the oldest and largest business brokerage firm in the Pacific Northwest, is commonly regarded as a market leader in the region in terms of institutional knowledge across a wide spectrum of areas and industries.  Our team of intermediaries includes successful entrepreneurs, top performers at large corporations in the technology, pharmaceutical, and construction industries, MBA’s, and an attorney.  There are few industries that we are not able to discuss intelligently and reference a prior achievement putting deals together.  Information on the verticals we serve as a firm are outlined on this page of our website:    https://ibainc.com/industries-served/

The first step in being a trusted professional advisor is to understand information relevant to making an intelligent decision. The next step is to convey the information to a client and apply it in a dynamic environment where results are dependent on execution.  The best metrics available to assess the achievement of a business broker or firm are to look at the number of transactions completed (IBA is at 4200+ successful business sales), testimonials published in the public domain on the firm website and sites like Google, and whether references can be contacted for accounts of performance.

Experience can be gained through positive and negative outcomes.  A MLB pitcher who wins two of five games they go to the mound, can tally up ten wins in a season while losing fifteen.  This may be serviceable as a fourth pitching option, but likely will not result in them being a fan favorite, a playoff starting role, or long tenure with a team.  The same can be true with business brokers.  A business broker can successfully complete transactions, but not have the skill to be a long term successful business broker.  Achievement as a business broker requires the ability to educate, analyze, problem solve, and persuade.  Strong listening skills, empathy, and the ability to build collaborative environments where attorneys, accountants, and bankers can work productively together is also necessary.   Every year multiple people inquire about joining IBA’s 100% commission compensated professional business sales team.  Few make it through our interview process with an offer to join the firm.  The ones who join IBA traditionally stay long term and experience significant success often becoming “go to” resources in organizations like Northwest Family Business Advisors, the Master Builders, the Center for Advanced Manufacturing Puget Sound, and the Washington Hospitality Association for members wanting to sell their privately held companies and family businesses.

Does knowledge, experience, and skill matter when selecting a business broker?  I will let a family story provide the answer, my father sold his veterinary hospital and the associated real estate using IBA in the 1980’s.  He told me in 1994 when I returned to the Pacific Northwest, that if I wanted to be a business broker in this region, the best place to go to learn how to do main street & middle market M&A right was at the firm that achieved results for him.
If you are interested in selling your business, our team would welcome the opportunity to interview for the position.  With confidence and ability similar to the Beatles, I am confident that no matter which member of our team you interview they will be able to leave the stage with a wink and smile saying, “I’d like to say thank you on behalf of the group and ourselves and I hope we’ve passed the audition”.  https://www.youtube.com/watch?v=Xwy-CPaXgOc

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned 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”.