Welcome back to Becoming a Better Business Broker in 30 Days!
This concise series title describes exactly what we hope you get out it - becoming a broker that can close more deals with less work.
If you missed yesterday, check out How To Build a Strong Business Broker Referral Network.
Today, we will explore the world of business valuation. But don't worry, we're leaving the spreadsheets at home for this article, instead focusing on Being Effective At Deal Communications.
The Art of Listening
"People have 2 ears and 1 mouth, keep that ratio intact" is a common phrase at our brokerage. After working across the table of many deal professionals, one thing is true, man oh man do some people love the sound of their own voice.
Especially, when it comes to advising a client when they don't have comparable skin in the game. Yes, an accountant or lawyer may have a fiduciary responsibility to a client when assessing a deal - but they get paid the same amount regardless of the outcome.
To be fair, a great deal of professionals don't operate this way. What makes them different? Well, for starters they obtain a deep understanding of their clients’ goals & concerns.
For example, if their client's primary goal is to buy a business they realize it's their responsibility to point out the deal upside as well as the potential risks and challenges. After this initial assessment - it is now their turn to stop speaking and listen to their client's response. If the client is comfortable with the risk (important: they also understand the risk) - that is the client's decision. If the client is asking for strategies to overcome a perceived deal risk - now it is time to offer strategies to overcome a deal hurdle or risk.
Woah there business brokers, you're not off the hook, that means you too. To become a trusted advisor you cannot speak for your seller any more than you can speak for the buyer. Instead, you need to listen to what they are both saying and present that information coherently to the other party (avoiding a game of 'telephone' while you do it). As such, we like to think of Business Brokers as Deal Translators.
Business Brokers are Deal Translators
Our standard should be that as a facilitator of facts - presenting all relevant information to a buyer + seller so they can make informed decisions. Unfortunately, bad actors can prevent us from doing this perfectly, but we should try our best.
We bring this up as we've heard many business brokers talk about 'selling' businesses. Yes, that is what we do, but it's not like we're selling Encyclopedias over here, you can't (ethically in most cases) "sell" someone into buying a business.
So how do you become a facilitator of facts? Here are some prompts to ensure you don't skip over important details:
- Always ask, "If I were [buying/selling] this business, how would I feel at this moment?"some text
- For example, if you receive an LOI and there is no clause about training + transition, ask for clarification from the buyer before presenting it to your client.
- If you catch yourself feeling any of the following - you need to ask more questions:some text
- "This feels too good to be true"
- "That doesn't seem to add up"
- "Why do they want to pay in all Bitcoin?"
- Are all parties up-to-date on the most recent deal updates?some text
- We're guilty of this on occasion - you're in an email chain with the seller's lawyer, buyer's lawyer, buyer... and you forgot to include the seller and now they're hearing things for the first time about the deal from the buyer and not you - it's a bad look.
- We're guilty of this on occasion - you're in an email chain with the seller's lawyer, buyer's lawyer, buyer... and you forgot to include the seller and now they're hearing things for the first time about the deal from the buyer and not you - it's a bad look.
Being a great translator starts with clear & concise communication. In our digital age, most of this communication now occurs on email & text. The great part of the email? You can communicate to multiple people, with the same information, instantaneously. The bad part? Sending the wrong email gets etched into digital stone - holding you more accountable for slip-ups.
But don't worry, we've developed the following email framework to fool-proof your correspondence.
Crystal Clear Communication - Broker Email Template
Okay, I'm sure this has never happened to you, but we've heard a rumour that sometimes people say the wrong thing over email (could you imagine? 😅).
Just kidding - we've all been there. Which is why we built this email template specifically for deal correspondence:
SUBJECT LINE: [Attention Statement: Context]
- INTRO TEXT (pleasantries, how's the weather, etc.)
- DISCUSSION POINT #1some text
- Action item: PERSON NAME - responsibility/deliverable
- DISCUSSION POINT #2some text
- Action item: PERSON NAME - their responsibility/deliverable
- SUMMARY - reiterate the deadline for when deliverables are due.
As you can see, it's a super simple structure - but you probably need an example. Here's an example email:
You may ask - wouldn't that all have been faster with an email? And you're correct. But you know what phone calls are bad for? Holding your client accountable as it is hard to say, "hey remember when you agreed to 4 weeks of training?" but it is very easy to forward an email.
But keep in mind - we work in an industry where there is A LOT of nuance. So you'll need to use your intuition and keep the following principles in mind:
Tailor Your Approach By Client
Keeping the above in mind - you also need to understand the preferences and expectations of each party involved in a deal is key to effective communication. Some clients may prefer detailed emails, while others might appreciate quick, to-the-point phone calls (but always follow up these phone calls with a recap email logged to your CRM).
Tailoring your communication approach can enhance understanding and rapport, leading to smoother transactions.
Recognize Difficult Conversations
Deals are highly emotional - with a lot of ups and downs. Meaning, not all deal communications will be straightforward. Navigating difficult conversations, whether it's delivering bad news or addressing concerns, requires tact and empathy. Always aim to be honest and transparent, providing solutions or alternatives whenever possible.
Also, make sure you have a good peer group of fellow professionals you can bounce ideas off of or simply rant/vent (or join our Business Broker Community - coming soon 👀).
Follow-Up and Feedback
Effective communication doesn't end once a deal is closed and the commission check is in the bank. Instead of driving off in your Lambo, make sure to follow-up with all the individuals involved and seek feedback on the process to help you on future deals. This not only helps in refining your approach but also strengthens relationships with clients and partners.
Wrapping-Up: Becoming a Better Deal Communicator
We didn't write a conclusion for this one, because we should have communicated our point so effectively already 😉
But for real, the biggest takeaway we have for being a better communicator is that it takes consistent hard work. It's very hard to over-communicate but painfully easy to under-communicate. Keep this in mind on your next deal, try our email communication template, and let us know how it goes!
Next, stay tuned for our next article (surprise! It's due tomorrow 😭) on Negotiation Tactics For Business Brokers - this one is going to be a big one!
If you want to learn more about automating your business brokerage with DealBuilder, please visit our site or book a demo here.
