There’s a common yet unfair assumption about business brokers that looms throughout the business buying ecosystem.
More often than not, business brokers are seen as acquisition professionals with a reputation of breeding hostile environments. Yes—in every environment bad seeds exist; however, when it comes to business brokers, let’s not forget that the good ones routinely outweigh the bad.
In the world of business acquisition, well-practiced brokers are often competing against the narrative that all brokers are problematic intermediaries with self-serving ambitions. It’s a narrative that exists because of the cracks in the buying and selling system—brokers are the one intermediary around to provide both sellers and buyers with business buying information. Because the system, first and foremost, encourages and incentivizes brokers to represent business sellers over buyers, it’s buyers—the tickets to acquisitions—who are left to feel underrepresented and unsupported.
At Village Wellth, we know that the average relationship between a business broker and buyer needs improvement and reformation. As we’ve continuously worked to explore the business buying ecosystem, we’ve come to recognize that many first-time buyers have doubts about brokers and many proficient brokers have frustrations with buyers.
One of our missions at Village Wellth is to enrich the business acquisition industry by helping it become more efficient. Misconceptions, miscommunication and misunderstandings between brokers and buyers deters the efficiency of acquisitions—these misapprehensions are often the cause for why acquisitions take a long time to finalize, consequently fall through or never materialize in the first place.
Through our research at Village Wellth, we’ve found that an overwhelming number of buyers who initiate the search for a business to buy end up abandoning their search due to frustrations with the initial buying process. Here are some pain points for buyers that cause them to feel doubtful and frustrated when it comes to forming relationships with brokers.
From the Buyer’s Perspective
- Buyers feel underrepresented throughout the buying process.
- Buyers feel that brokers don’t respond to their inquiries and don’t take them seriously.
- Buyers are unsure of how to reach out to brokers or conduct active searches.
- Buyers feel that broker-listed businesses are overvalued and unattainable.
On the other hand, there are reasons why brokers aren’t always able or willing to foster favourable relationships with buyers. These are some of the pain points brokers feel about buyers that make a broker’s pursuit more challenging.
From the Broker’s Perspective
- Countless buyers who are unfamiliar with the acquisition process approach brokers.
- Many buyers have no proof of credibility and brokers don’t have the time to verify buyers.
- Brokers come in contact with passive buyers who are unaware of how to show their motivation to acquire.
- Buyers with unrealistic expectations and low financial ability solicit advice from brokers about unattainable acquisition opportunities.
- Buyers frequently approach the wrong brokers due to a lack of network and connections.
Why Do Buyers and Brokers Feel this Way?
According to small business strategy expert Richard Parker, the main reason why over 90% of buyers fail to acquire is because “the vast majority of prospective small business buyers are first timers. They have never gone through the process.”
Cracks in the business buying system unveil the fact that there isn’t a great deal of meaningful representation for buyers. Many first-time buyers aren’t versed in the acquisition process; this makes misconception and miscommunication between brokers and buyers all the more profuse.
A few main underlying conditions generate these points of contention between buyers and brokers.
- Buyers don’t know how to refine their criteria.
- Buyers are not equipped with skills to actively search for what they want or need out of a business opportunity.
- Buyers don’t have a representative to help them through the process, develop credibility or find the right connections.
In a sea of 100 buyers, business brokers are usually approached by 5 who have the wherewithal, experience and credibility to pursue acquisitions. Of course, brokers want to work with that handful of experienced and motivated buyers, yet this reality leaves those other 95 buyers, who may very well be credible and ready to acquire, in the dark. With that, business brokers simply don’t have the time or resources to educate that 95% of the buyer pool.
This is where Village Wellth comes in. We aim to provide support to the first-time buyers who face these challenges, which often prohibit them from finding meaningful relationships with brokers and successfully striding through the motions of acquisition: lack of knowledge, uncertainty about search criteria, undeveloped skills and so on.
With a focus on equipping buyers to become better educated, prepared and financially verified, Village Wellth acts as a guiding representative for buyers. We help buyers become prepared to search, pursue acquisition and connect with professionals in a handful of ways:
- Through familiarizing buyers about the entire acquisition process from specificities to generalizations.
- By helping buyers craft purposeful, attainable and affordable search criteria.
- By connecting buyers with financial advisors, lawyers and other professionals to conduct preliminary due diligence and financial analyses.
- By providing buyers with education through access to purpose driven tools, seminars and consultations; giving buyers the confidence to make informed and motivated decisions.
- By digitally financially verifying buyers through confirmation of available funds.
Beyond being a resource for buyer education, Village Wellth’s digital platform is also accessible to business brokers, consultants and clients in the acquisition ecosystem. Sellers, lawyers, valuation specialists and more are encouraged to join the community.
Through Village Wellth’s broker-focused subscription, experienced brokers are put into contact with our crowd of verified buyers. Further, Village Wellth does the tedious work of verifying buyer credibility. Saving brokers’ time, we screen your potential clients, those from your network and those from ours.