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A Brokered Deal – Not a Broken Deal

There has been a cascade of online chatter in the past few months ignited by the April 2012 article in Inc. Magazine by noted entrepreneur Norm Brodsky. His contention is that most business brokers are generalists and even insinuates that the profession is often quite shady.

In Brodsky’s words “Most brokers can be counted on to represent themselves. A broker’s livelihood depends, after all, on 1. Making sure the deal gets done and 2. Doing it for as much money as possible.”

Now call me naïve and perhaps a bit stuck in my ways, but doesn’t that description fit almost any business sales transaction? Especially if it is a one -time event with a limited probability of additional revenue from the parties involved.

Exiting a business is a complex transaction that requires a skill set not shared by most business owners. A professional and competant busines broker, mergers and acquisition advisor or investment banker will provide expertise, guidance and save a business owner thousands tens of thousands of dollars during the course of the exit deal. This topic was recently addressed in a podcast conversation titled “A Brokered Deal” with Barbara Taylor of Synergy Business Services.

These professionals are all what could be termed ‘transactional’ advisors. That is, they are hired to complete a transaction. Of course they want to get it done as quickly and profitably as possible. Why wouldn’t they.  They want to broker a deal, not create a broken deal.

The real key though to a successful business exit is to come prepared. Don’t expect a business broker to ‘fix’ your business or even help you prepare it for sale.  Understand what a business broker is tasked with doing. Know what their motivations are upfront.

Growing and preparing a business for sale is a process that takes time. It is advisable to begin the process at least two or three years in advance. Working with a certified exit planning advisor or someone with the expertise and breadth of knowledge to ‘quarterback’ your exit strategy is time and money well spent.  This advance planning will provide you the springboard to extracting your business wealth in an optimum fashion.

 

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About the Host

Joel Goobich is a big-picture guy with sharp insight into how individual parts make a strong whole. He has 30+ years of entrepreneurial endeavors; starting, building and exiting businesses. He is tireless in the pursuit of solutions to boost your business and put you on a track to a profitable transition and exit to your next act.