Is Your Business Broker Greedy?

Boss Talk: Selling & Buying Businesses with Jim & Carey

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WEBSITE: https://bossgi.com

RELEASE DATE: July 4, 2024

SHOW NOTES:

Boss Talk: Selling Businesses with Jim Parker and Carey Sobel | EP 10: Is Your Business Broker Greedy?

Welcome to another episode of Boss Talk: Selling Businesses with Jim Parker and Carey Sobel! In this episode, they tackle the provocative question, 'Is Your Business Broker Greedy?' The discussion delves into the concept of co-brokering in business sales, comparing it to real estate practices where buying and selling agents collaborate. Co-brokering is particularly emphasized within the Business Brokers of Florida (BBF), where it's been practiced for over 40 years. Jim and Carey uncover why co-brokering helps sell businesses more effectively, the challenges some brokers face with co-brokering, and why they believe overcoming these hurdles can significantly benefit sellers and buyers alike.

Tune in to learn about the power of collaboration in the business brokerage industry and how it can maximize your sale's potential!

Business owners, if this content resonated with you, feel free to contact Boss Group for any inquiries or to get started with a Broker’s Opinion of Value. We're here to serve you and ensure your business goals are met with excellence.

For more information on selling your business, visit https://www.bossgi.com

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00:00 Introduction to Boss Talk

00:21 Understanding Co-Brokering

01:16 The Importance of Co-Brokering in Florida

02:17 Challenges and Misconceptions of Co-Brokering

03:28 The Role of Business Brokers in Co-Brokering

06:19 The Power of Multiple Listing Services (MLS)

09:09 Nationwide and International Co-Brokering

12:14 Overcoming Co-Brokering Obstacles

16:39 The Benefits of Co-Brokering

29:10 Keys to Successful Co-Brokering

36:22 Conclusion and Final Thoughts

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Understanding Co-Brokering in Business Sales: Is Your Business Broker Greedy?

When it comes to selling your business, the right broker can make all the difference. But is your business broker really acting in your best interest, or are they driven by greed? In this episode of Boss Talk, Jim Parker, a seasoned business broker, and his business partner Carey Sobel dive into the concept of co-brokering and its significant impact on the success of business sales.

What is Co-Brokering?

Co-brokering is essentially the collaboration between a selling agent and a buying agent to facilitate the sale of a business, reminiscent of how real estate transactions often work. This concept, though prevalent in real estate, is not widely embraced across the country in business brokerage.

Pioneering Co-Brokering in Florida

In Florida, the Business Brokers of Florida (BBF) have been co-brokering for over 40 years. This practice has contributed significantly to the success of business sales in the state. Jim Parker, a three-time state chairman of the BBF, emphasizes the importance of co-brokering and addresses the misconceptions and resistance faced by brokers.

The Resistance to Co-Brokering

One of the main reasons brokers resist co-brokering is the reluctance to share commission. This hesitance is often perceived as greed, since co-brokering involves splitting the commission between brokers. However, there are other concerns as well, such as maintaining control over the transaction and preserving confidentiality.

Advantages of Co-Brokering

Despite the resistance, co-brokering offers numerous benefits:

1. Increased Marketing Power: Co-brokering expands the reach of the business listing, tapping into multiple brokers' networks.
2. Larger Buyer Pool: It provides access to a wider pool of potential buyers, maximizing the chances of finding the right buyer quickly.
3. Faster Sale Process: More exposure leads to faster sales, which benefits both the seller and the buyer.
4. Higher Sale Price: With more buyers competing, the likelihood of achieving a higher sale price increases.
5. Learning and Improvement: Brokers learn from each other, improving their practices and the overall industry standards.

Debunking the Myths

1. Control Over Transaction: Some brokers fear losing control over the transaction. However, experienced co-brokers understand the process and work collaboratively to ensure the transaction proceeds smoothly.
2. Confidentiality: Protecting the confidentiality of the business sale is crucial. Experienced co-brokers ensure that confidentiality agreements are upheld, maintaining the trust and integrity of the transaction.
3. Reputation Risk: Building a reputation as a cooperative and trustworthy broker can actually enhance your standing in the industry, rather than tarnish it.

Keys to Successful Co-Brokering

1. Qualification of Candidates: Ensure that buyers are well-qualified before presenting them to another broker. This maintains credibility and trust.
2. Clear Communication: Establish clear communication and processes between brokers to avoid misunderstandings and ensure a seamless transaction.
3. Collaboration Over Competition: View the co-brokering relationship as a partnership rather than a competition. Working together towards a common goal benefits everyone involved.

Conclusion

At the end of the day, co-brokering is not about sharing or losing commission. It’s about providing the best service to your clients, ensuring maximum exposure and the highest chances of a successful sale. If you’re considering selling your business, ask your broker if they are willing to co-broke. It could make all the difference in achieving a successful transaction. By embracing co-brokering, brokers can improve their practices, foster better relationships in the industry, and ultimately provide better outcomes for their clients. It’s time to shift the focus from individual gain to collective success.

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