Business Sales Blogger

The life and times of a business broker

Friday, February 17, 2017

It's an interesting career being a business broker, the things I have heard, been called to my face and behind my back means you develop a very thick skin.

I suppose that it'll always be the way of things that the broker needs to be the "bad cop" in any transaction. I have no real problem with that because if I've done my job right, the buyer and seller should have a good relationship, because the tough parts of the negotiation have been channelled through me. Thus I can mitigate either of the parties taking offence from said negations.

There are so many moving parts in any transaction. There are lawyers, accountants, bankers, spouses, consultants, coaches etc., (one for each side) and all need to be committed to stay the course. A good broker ensures that everything keeps moving, parties that need information get it, meetings are organised and follow ups are followed up.
But when the deal is done there isn't a broker I know that doesn't worry about whether he/she has to fight to get paid. You negotiate and agree on a fee up front, usually a percentage of the agreed value, but when push comes to shove even though you have a contract there is often a little argy-bargy when it comes to paying the fee.

Not sure why this is the case, but I think it has a little to do with how stressful a business sale transaction can be on a Business Owner. No matter how well it's planned or how well the business is positioned for sale, every transaction has its stress points. Normally this is in the Due Diligence phase and this, under normal New Zealand practice, is an exclusive investigation by one buyer, so all of the power is with him/her. When someone is digging through your business history it can be difficult not to take personally, what the buyer and their advisors might find and ask for clarification on. And then there's the fact that the buyer can pull out at any moment, that's very stressful because the process would then have to start again with another buyer.
So maybe it's just the fact that the seller is a little punch drunk at settlement? All I know is I continually improve on my expectation management up front, continue to improve my paperwork and try to improve my ability not to take the difficult times personally. It's all you can do because no matter what happens it is always the Brokers fault :)