hat do you do under these circumstances? Should you reduce your fees in order to secure the client? We as business brokers are faced with such a dilemma on a very regular basis. I know that I cannot compete with brokers who just want to take a listing without any great consideration to actually selling and will say whatever the client wants to hear in order to secure the listing. Personally, I will not list a business unless I believe that I’m able to sell it. With the backing of ABS Business Sales, we offer a full service, including my 24/7 availability, all marketing/advertising, creating the ad and advertising in the maximum number of websites, print media as required, email campaigns, etc. to find the elusive buyer. We also prepare the Information Memorandum.
We organize Confidentiality Agreements, vet the potential buyers prior to providing them with any information about the business. We ensure complete confidentiality. We organize inspections, meetings with the vendors. We are smack in the middle of the negotiation process between the seller and the buyer. Negotiating is a skill, mastered by very few. As we work for the seller, it is critical to obtain the best possible price and conditions for the seller without losing control of the negotiation and allowing the deal to go down the drain. It is critical not to forget that the offer on the table might be the only one you will receive.
My philosophy is very clear, when negotiating, success is a win win result. We also prepare the sale contract. You have to ask yourself, are you able to provide a first class service if you cut corners, because you want to do things at a lower price? From my point of view, it is impossible. I personally cannot and will not compete on price alone. I will not cut corners and offer a second class service to my clients in order to secure a listing. I am only prepared to offer a first class service with the objection being obtaining the best possible outcome for my seller and making the complete process as smooth as possible at a competitive price.
Brokers who offer heavily discounted fees cannot afford to offer the same service and in most cases will not achieve a satisfactory result for a seller. I have had several sellers approach me after another broker was not able to sell their business and provide the service that he promised. So far, possibly with some luck involved, I have been able to successfully sell all of those businesses, including one that was with two different brokers for a period of over a year. I sold that business in less than six weeks. A seller should always engage a reputable broker. In conclusion all you can offer a seller is the very best service you are able to provide at a competitive price. Recently a colleague asked me: “What do you offer a client that other brokers don’t?” My answer was: “Me!”
The seller wanted to just give up and honestly I didn’t blame her, but I managed to convince her to keep going and eventually at 3:30pm we had a deal that both parties agreed to, an unconditional contract. The buyer wanted the contract ready to sign on Monday as he was pushing for a very quick settlement. With the fantastic assistance of our incredible contracts manager Jodie-Lee Phillips the contract was ready before lunch. That’s when it all started again, every day, sometimes several times a day, the buyer would raise questions, would request more information, appearing to just delay the signing of the contract. This continued every day. The seller became increasingly frustrated. Ten days after the contract was meant to be signed, I was contacted by another potential buyer, who I had been talking to a few weeks earlier and thought was very genuine, but seemed to have just dropped off the face of the earth.
Unfortunately she had a death in the family. I told her that we were meant to have a contract signed, but the buyer was dragging his feet. As I always do, I told her that until we actually have a settlement, the business is still for sale, but once the other buyer signed the contract, the only way for her to buy the business was if settlement did not occur. She was very interested, I organised a meeting with the seller the next morning. The new buyer, wanted to make an offer, I recommended that if she wanted it accepted, she should make it the best she could, as I had no intention of turning this into an auction. She made an offer which was acceptable, but she wanted another discussion with the seller. Two weeks after the original contract was meant to be signed, it still wasn’t. I really tried to convince the buyer to sign the contract every day, but he just came up with excuses and a different question. Anyway the good news is, I now have a new unconditional contract signed by the new buyer within three days after the inspection of the business. We now have an ecstatic seller, an extremely pleased buyer and one very disappointed buyer who couldn’t stop dragging his feet. What do they say “You snooze, you lose”?
