Introduction

Jason: Hi, everyone. I’m Jason Bolara, and this is the Know Your Why podcast. Today I’m here with Gregory Kovsky. Gregory is the president and CEO of International Business Associates, the Pacific Northwest’s oldest and largest business brokerage firm, and he has over 30 years of experience. Gregory, I’ll stop there, because I want to let you tell your story. We’ve already discussed that your father was a veterinarian, so we have some common ground. Thank you so much for being here. I’m looking forward to the conversation and appreciate your time.

Greg: My pleasure. It’s an honor to be here.

A Veterinarian’s Son Finds Business Brokerage

Greg: You’re correct. My introduction to business brokerage was as a child. My father, in his 40s, went through a midlife crisis and decided he didn’t want to be a practicing veterinarian anymore.

The tipping point, and Jason, you might relate to this, involved a breeder with a large group of wirehaired dachshunds that they showed. My father was going out of town with my mom to the Oregon coast for their anniversary. He had two other veterinarians on staff, but he couldn’t get either of them to come in and do an emergency C-section on a wirehaired dachshund. So, very frustrated, he had to go in and do the surgery himself and change his weekend plans. That was the tipping point. He decided, “I have no control in my life, and I’m going to sell my hospital and the real estate.”

So he sold his veterinary practice in Portland, Oregon, and used his degree in a new way. He went to work for Hill’s Pet Products, teaching pet nutrition to veterinarians across the United States before it was a thing, in the ’90s. That was my family’s first exposure to business brokerage.

I didn’t think much of it at the time. I just learned I no longer had to clean runs and cages and feed the dogs on weekends, which is what the oldest son often got to do. I went away and earned my degree in investment finance and accounting at the University of Texas, graduated, and pursued my first career, which took me to Kansas City. Being a Northwest boy, I missed the mountains and the ocean. The job was fine, but I decided to come back, and I didn’t know what my next career step would be.

I was talking to my father, and he said, “You’re a salesman by personality, and you have an academic background in accounting and finance. I think you’d be good at selling businesses.” So he introduced me to the founder of IBA, Bill Osavski, in 1994. I joined the firm, and as they say, the rest is history. It’s 2025, and I’m still here.

Jason: That’s great. It’s funny, on the topic of veterinary medicine, I think the children of veterinarians either run toward it or run away from it. There tends to be no middle ground. You either end up working at your parents’ practice or go in the total opposite direction, which sounds like what you did. Business brokerage is relevant to veterinary medicine, but it’s a very different skill set, background, and training from what your father experienced as a student and in his early career.

Greg: I’m not a big fan of blood, and I had one of those fathers who used to take pictures of his surgeries and share them at the dinner table. I fondly remember one where he removed a racquetball from a dog’s stomach, and that’s what we got to see while we were enjoying spaghetti.

Jason: Well, I guess that explains why you either run toward it or away from it. At the time he went through that sale, you were too young to really be involved, and it was more of an early introduction. Am I understanding that correctly?

Greg: In terms of timing, correct. I think I was in middle or high school when that happened, and I didn’t think much of it. But my father’s testimonial, that they did a good job and that he would feel good about placing his eldest son with that company, made a positive impact, and it became an option. Who’s better at giving a testimonial than a happy customer? So that was a positive for me. And he left the experience seeing it as a challenging, financially rewarding career for those who perform, which it is.

Jason: That’s probably about the best endorsement you can get: a former customer who is happy enough to recommend the firm to their son, regardless of the industry.

What a Business Broker Does

Jason: Tell us a little about what you do. I understand business brokerage, because we acquire businesses, but I probably don’t understand it from the broker side. So that listeners can understand, tell us what you do, whether you have a specific niche, and what your day-to-day looks like.

Greg: Sure. As you shared, IBA is the largest business brokerage firm in the Pacific Northwest. We’ve been in business since 1975. I’ve been with the company since 1994, and I’ve been president, CEO, and owner since 2000.

We’re a sell-side representation company. Our most common client is someone who wants to retire. The second most common is someone who enjoys creation more than management and decides to exit once the business reaches a certain stage. The third is what I call distress situations: health, divorce, a partnership breakup, and so on.

At IBA, we serve as a trusted guide, paid 100% on performance. We don’t charge our clients a penny until we complete the transaction. We start with a valuation of the business and give you an honest opinion of its market value. We do this full time and are paid 100% on performance, so we have a vested interest in being honest with you about value. We want the business to sell at the highest possible price, but we want it to sell. We don’t want a product just sitting on our shelf. So that’s where the process always starts.

This is a very sophisticated, nuanced business where you actually need professional-level knowledge in about six areas. We need to understand accounting, tax, finance, law, real estate, and business. And then we need to understand psychology, because in many cases, the owner is selling their child.

Yes, the value you get is very important. But at the same time, you’re concerned about your employees. They’re your extended family. How will they do in a transition? You’re concerned about your customers. They’ve been loyal to you, and you’re known in the community for serving them. Say you’re the community veterinarian. How many people have brought their animals to you over the years? You don’t want to hear when you go out to dinner that the new veterinarian doesn’t have a good bedside manner and raised prices. That’s not what you want to experience.

And there are vendors. Maybe you own a roofing or construction company and golf with the owner of the local lumber yard, who counts on your business. If that business goes away, theirs is affected too. So I’m always aware of the ecosystem that spreads out from every business, from its employees to its customers.

Why Selling a Business Isn’t Like Selling a House

Jason: There’s a lot that goes into those transactions. It’s funny you said it’s like selling a child. I’ve used that exact analogy when explaining why it took me two years to close my first business acquisition. I had other deals lined up, and the sellers just decided they didn’t want to go through with it. It seemed very much like a father walking his daughter down the aisle. It’s a big transition point for something these owners have often grown for 20, 30, or 40 years. As you mentioned, they’re worried about their team, their legacy, and the financial impact on them from all those angles. I thought it would be a lot like a real estate transaction, and it’s not. There may be real estate involved, but buying someone’s 30-year business is not the same as buying a house. It didn’t have that feel to me.

Greg: That’s 100% true. You can buy the most beautiful waterfront house for millions of dollars and never meet the former owner. It’s more of a commodity sale. Whereas down the street, there may be a diner everyone loves, known for its pumpkin pancakes or whatever it may be. If you change the recipes, that business may fail. It’s not a guaranteed transition.

So even though we represent sellers, we work really hard to set buyers up for success. We want to create an environment of full disclosure and transparency and use best practices, because our reputation is tied to the sale as the architect of the transition. And the last thing our seller wants is to see their life’s work go out of business three years later, or to run into a former employee at a restaurant who says, “My family’s in turmoil. I got laid off. My daughter worked so hard to get into her school, and she had to come home and go to community college because I couldn’t support her anymore. I assumed I could, because I’d been with your company 15 years and knew what my salary was.”

Jason: It’s like buying that waterfront home with the family still living in it, to carry the analogy further.

The Broker’s Role in the Transaction

Jason: As a broker, you mentioned there are legal and financial implications. How involved do you get? I’m assuming you counsel your sellers quite a bit. Do you guide them through the whole transaction? Do you help with the transition? I don’t know where your role starts and ends.

Greg: IBA is different. We hold ourselves to the standard of a top-tier professional, whether that’s an attorney, a CPA, a wealth advisor, or anyone else. The advantage we bring is experience. Personally, I’ve done over 300 transactions, and the firm has done over 4,400 in its history.

We’re not attorneys, but I have read hundreds of purchase and sale agreements. I’ve been in negotiations over reps, warranties, indemnification, and non-competes, and I know where the middle of the fairway is. My value as a trusted guide is keeping the parties talking to find a yes that works for both of them, because counsel on both sides will sell fear. They share their experience, and attorneys’ experience tends to be negative. They share the lawsuits they’ve known. Out of our 4,400 transactions, a very small percentage has ended up in litigation. So we’re speaking from a high success rate. It’s just a different perspective.

It’s also knowing financing. Again, we represent the seller, but the seller needs the money to close. We often find the financing for the acquisition, because we know that a specific bank focuses on a certain sector or geographic area, or has a looser lending policy than another. For example, big national banks like Bank of America and Wells Fargo tend to be more bureaucratic, and it’s harder to get financing from them than from proactive SBA lenders like First Internet Bank, Live Oak, or Huntington Bank. Those lenders focus on financing entrepreneurship and probably have a better credit box for an entrepreneur than your neighborhood national bank.

Jason: That’s a great point.

After Closing: Getting Them to the Chapel

Jason: As you walk through these transactions, there’s a lot that has to happen in the first few weeks to a month of the transition of ownership. Do you see that as part of your role as a broker, or do you walk away at the closing table? How involved are you after the transaction has taken place?

Greg: We’re not involved. That’s not what we do. We get them to the chapel and get them married, but we’re not business consultants. We’re professional intermediaries, and we make sure all the pieces are in place for a positive transaction. That’s where we step aside. Maybe the buyer brings in their CPA, or hires a new CFO or an outsourced CFO, however they want to run the company. That’s the buyer’s choice. They’re buying the keys to the car. They drive it off the lot, and they get to do with it what they want.

Industries and Deal Size

Jason: Do you have a size range of business you tend to advise, or do you take anyone who comes in? It sounds like you do a lot of transactions, so I’m not sure whether that means a wide range of sizes or a niche.

Greg: Excellent question, Jason. Starting with industries, we represent companies in about 20 different industries, from medical practices to education, manufacturing, retail, hospitality, and construction. We’re fairly comprehensive. I have 18 intermediaries on my team with different areas of specialty.

As for size, we like to start where people are working on a business, not in it. On the low end, we like about a quarter million in EBITDA as a starting point. We believe people at that level have succeeded in American society. It could be a community auto repair shop, another niche we’re well known in, with five mechanics, where the owner earns $350,000 a year. We want to help that person sell. Maybe they own their real estate, and we’re licensed in Oregon and Washington to sell real estate, so we can handle both asset classes for a client under one umbrella. On the high end, we go up to about $5 million in EBITDA, or $25 million to $30 million transactions.

Veterinary Medicine Consolidation

Greg: As we were discussing before we went on the air, since you’re a veterinarian, we did a lot of transactions when corporate veterinary hospital chains were rolling up independent veterinarians. One of my favorites to work with was VCA. I still love their ticker symbol on Wall Street. If you recall, it was WOOF.

Jason: Yes. Who knows how it worked out for them, but after they were bought by Mars and were no longer publicly traded, you couldn’t buy WOOF stock anymore. That was a funny thing for them to have.

I have a lot of friends in the veterinary world, your father was a veterinarian, and you’ve been involved in these transactions. It’s been an interesting time from 2020 to now. When COVID happened, we all thought veterinary medicine would slow down, and it did quite the opposite. For those who aren’t aware, caseloads basically doubled in the span of maybe six months. It was a wild ride. A lot of people sold practices around 2020 and 2021, and I think they got great multiples. Things have shifted a bit since then, and the pace has come back toward what it was before COVID. What have you seen in that space transactionally over the last few years?

Greg: A couple of things. Metro areas have been heavily bought up, so it’s not necessarily an easy space to compete in, and occupancy costs are a factor.

It’s also interesting, and you’re likely aware of this, that veterinary medicine has become predominantly female, and female practitioners often want work-life balance. They’re in it for the medicine and the care, not necessarily for the entrepreneurship, so they’ve frequently settled into the corporate model. We represent many great female entrepreneurs. But I do think testosterone drives entrepreneurship in men. There’s a reason the number of male entrepreneurs exceeds the number of female entrepreneurs. I think it’s the hunter in us, the desire to climb to the top of the mountain and compete. So I do think that happens.

But to get back to your question, I think there are great opportunities outside the cities, in concentric circles, where you can build a practice while the market is limited and then, as population growth continues, exit to one of the corporate players once it has become a substantial market. So we see good activity in some rural locations, plus the opportunity to own your dirt and control your occupancy costs.

The other thing we see is specialization in veterinary medicine. Maybe you’re the emergency clinic or the avian clinic. Those can still be quite lucrative business models, finding places where the corporate players may not be playing at the same level. I’ve even seen mobile veterinary hospitals that come and provide service at your home. Customer service is king in many business models, so those kinds of things can be very positive.

We’re also very active in the pet space in general. We’ve frequently sold boarding facilities and training facilities, and we just completed the sale of a pet treat manufacturer, Catman Doo, which sells its products online through sites like Chewy.

Jason: Veterinary-adjacent businesses do seem very popular among other people I know in the business acquisition world.

I’d say perspective on ownership in the veterinary world may differ from inside and outside, but I know a number of female practice owners, managers, and veterinarians who are fantastic entrepreneurs. You’re right that it’s a female-dominated industry now, but I don’t know that I share the same perspective on the entrepreneurship side.

I do think there’s a generational shift overall in interest in practice ownership. As I said, a number of my friends sold their practices at just the right time and made a nice exit. At that time, private equity groups, VCA, and the larger corporations were buying up practices like crazy. I’ve seen a few of them have to sell. They got a bit over their skis and had to sell off some of what they acquired.

And this isn’t good for the near-retirement generation, but I’ve seen that one- and two-doctor practices don’t draw the same interest from a sale perspective. I think that will be the challenge now: people who want to buy a veterinary practice want a two-, three-, four-, or five-doctor practice. They want something bigger. As you mentioned earlier, you want to buy a business where you can work on the business, not in it. If you buy a solo veterinary practice, that doctor represents a lot of key-person risk. So from the inside, I’ve seen a bit of a pullback in that space, and perhaps more interest in veterinary-adjacent businesses like the treats and pet supplies you mentioned, grooming, and doggy daycare.

But perspective is everything. I’m a veterinary surgeon, so I walk down the street and see dogs limping everywhere I go and don’t understand why their owners don’t see it. Or maybe they do. Your perspective shapes what you see in the world. Have you seen any of that pullback in the veterinary space? I think there’s certainly still opportunity there, but it’s interesting to see the ups and downs of the last four or five years.

Creativity in the Pet Space

Greg: And I don’t discount female entrepreneurship. I have four very talented female M&A brokers on my team, and they frequently represent female entrepreneurs. We’ve found that female entrepreneurs often like to take gender out of the room and work with a female CPA, a female attorney, and a female broker. Not all of them, of course. I’ve represented many women over my career.

In fact, speaking of creativity and opportunity, one of my past clients in the pet space manufactured raw pet food. Randi went into it because traditional diets weren’t resolving skin and other issues her own beloved pet had. She took the holistic, naturopathic approach she uses for her own diet and applied it to animals.

We have two Weimaraners at home, and they eat an exclusively raw diet. I can tell you their health is amazing. We lost one a couple of years ago who lived to 16. You are what you eat, and I bought into the concept. I don’t think wild wolves and foxes eat much kibble.

Jason: True, they don’t. I think one of the biggest entrepreneurial angles in veterinary medicine is people extrapolating from their own experience, or from human medicine, and bringing it into the veterinary world. That happens a lot, and there have been some great advances as a result. Physical therapy and acupuncture, for example, have become a big part of the veterinary world over the last 10 or 20 years, when they didn’t used to be. The diets too. I think it’s a great space for people to apply their creativity. Of course, I’m biased. I’m a veterinarian, and the space is important to me.

Gregory’s Why: Education

Jason: Let me switch gears. I want to make sure I ask the question I ask every guest. Based on the name of the show, Know Your Why: Gregory, what is your why? You’ve had a lot of success. At this point in your career, what keeps you excited?

Greg: I love teaching and mentoring. It’s one reason I do podcasts like yours. We have a huge population of baby boomers who are going to transition ownership of their businesses, and I want to make sure they do it from a foundation of knowledge.

There are a lot of misconceptions out there, and a lot of blunt instruments being used. For example, if part of the price is designated as payment for a non-competition agreement, it’s taxed at personal income tax rates. It’s essentially wages for not working. If it’s allocated to the goodwill of the business, it’s taxed at long-term capital gains rates. So there could be a spread of 10% or more depending on what you call the elements of the sale.

Of course, a buyer wants the seller to sign a non-compete. But from a legal and tax standpoint, do it in a way where you’re not sending more money to Washington, D.C., or the state of California than you need to. This was your life’s work, and it always troubles me when a third or more of the sale proceeds go to the government. My view is that as an entrepreneur, you’re creating jobs, paying local taxes, funding Social Security, and more. Taxing the sale on top of that is like an estate tax on your business. I work hard to help people mitigate that, and it’s one place where knowledge can make a big difference.

Jason: I agree 100%. You touched on all the different hats you have to wear as a broker, because there’s so much involved in a business acquisition. The tax implications for both the seller and the buyer can be dramatically different depending on how you structure things. It’s really important for people looking to sell or buy a business to think about it on the front end. Having someone with your level of experience and knowledge as a guide and coach through that process is tremendously important.

Where to Find Gregory

Jason: When people hear this and want to connect with you, what’s the best way to reach out?

Greg: I would start with our website, ibainc.com. If people want to learn more about buying and selling businesses, I’d direct them to our blog. We’ve had over 200 authors in its history, and we publish content at least twice a week from members of my firm, CPAs, attorneys, and bankers. It’s a good source of information. You can also always call me at our corporate headquarters at 425-454-3052.

Jason: Great. We’ll have that in the show notes, and I’ll definitely check out the blog. Gregory, this has been a fantastic conversation. Thank you so much for coming on the show and for everything you shared. As I said, there’s so much value in having someone like you guide people through what is a very difficult and often personal transaction, especially on the seller side. We’ll make sure everyone can find your contact information in the show notes.

Greg: Thank you, Jason. I enjoyed the interview.

Jason: Absolutely. Folks, make sure you connect with Gregory. Please like, rate, and review the show so we can keep bringing on great guests. And as always, thank you so much for listening.