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Skills Necessary for a Successful Business Intermediary
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If you're considering engaging a business intermediary to sell your business (or if you are contemplating becoming a intermediary), it is useful to know the requisite skills. Since 1979 and through selling 67,500 businesses, we've developed a very detailed profile of what it takes to be successful in this business.
It's not an accident 85% of intermediaries fail in their first year, and that the average age of business brokers nationwide is 54 years old. Business brokerage requires an extraordinarily diverse set of skills. The table below lists the skills we believe are essential, and a brief indication of why they are important.
| Skill |
Why Important |
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| Sales |
- Top 20% of sales people generate 80% of the results
- The purchase of a business is one of the largest and riskiest investments most people will ever make
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| Deep level of general business knowledge |
- Must understand and be able to explain to buyers every aspect of the business being sold
- To maximize value, should be able to advice clients on strategies for improving their business or one being considered for acquisition
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| Accounting, tax and financial knowledge |
- Must understand tax returns, income statements, balance sheets, etc. to value a business, justify the investment to buyers and lenders, understand tax implications, etc.
- To understand and estimate value of potential synergies in a merger or acquisition requires highly advanced financial analysis skills
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| Verbal and written communications |
- Must be able to write extremely persuasively, as an advertising copywriter might, to maximize buyer interest, and to accurately describe a client’s complex business operations, technology, marketing strategies in a way that can be readily understood
- Talks with scores of sellers, buyers, attorneys, CPAs, landlords, and other professionals daily in the process of advocating for clients
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| Marketing |
- Must be versatile in all the effective ways to market a business, including seminars, the Internet, direct mail, telemarketing, presentations, digital video, etc.
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| Legal knowledge |
- Must be able to understand a wide variety of legal documents and their impact on the business and transaction (e.g., purchase agreements, confidentiality agreements, leases, contracts, promissory notes, letters of intent, etc.)
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| Negotiations |
- The sale of a business is an incredibly complex negotiation; there are dozens of issues to be negotiated beyond just the price
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| Empathy, Counseling, Diplomacy |
- The sale of a business is on part with divorce on the scale of life event stressors. Clients are making huge financial decisions, changing careers, disrupting personal and business relationships, often moving thousand of miles, disclosing confidential information, etc. all at the same time. The enormous stress can cause clients to make bad decisions, or have trouble moving forward with a transaction. The broker must be able to elegantly and tactfully empathize with clients, provide useful counsel, negotiate compromises, etc.
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| Optimism & Persistence |
- A business intermediary must be relentlessly optimistic and persistent to overcome the challenges of this profession
- 85% of intermediaries fail their first year
- 95% of prospective buyers a business intermediaries talks to never buy anything; 95% of prospective sellers aren’t ready to sell
- Only 18% of businesses listed for sale nationwide sell (we do much better)
- Almost every deal will seem beyond hope of salvation at least a few times during negotiations or due diligence
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| Experience running ones own business |
- While not absolutely necessary, there is no better way to understand the product being sold, and to empathize with the buyer and seller
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Merging with a competitor or other company in your industry, rather than selling, entails risks but may offer substantial advantages.
Learn More...
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Thinking of Becoming a Business Intermediary? |
A career as a business intermediary is fascinating and extremely challenging. But the failure rates is high.
Learn More...
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