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My Favorite Thing About Small Business Brokerage

My Favorite Thing About Small Business Brokerage
Will Pouncey

The Reward of Making a Great Deal

Working on small business deals with buyers and sellers is one of the most rewarding activities I've had the opportunity to experience. I don't love Excel spreadsheets or P&L's or contracts, but I do love getting to work on these transactions. Reason being, when someone is buying or selling a company, there are extremely important goals for the individuals involved. In fact, it's likely the most important thing they have going on. The buyer is making a big commitment in terms of time and money. The buyer is committing to a direction for themselves or for their portfolio - and it's not easy to revert. The seller is parting with a major piece of their life and liquidating what is likely one of their most valuable cash flowing assets. There are families involved, employees involved, people's retirements involved... so we have to get the deal done right. I love working on small business transactions because of the critical thinking and creativity they require to accomplish. However, what does that mean for you as a potential business buyer or seller?

It Starts With Preparing the Right Approach

With so many moving parts and so much riding on a deal, it is of utmost importance that buyers and sellers both have the right approach before starting a transaction. That means having a qualified team, establishing realistic expectations, and getting prepared for the more painful parts of a deal (financing, due diligence, transition). This isn’t something where a buyer or seller should try to get off cheap. The right advisor will get a seller a higher purchase price, get a deal across the finish line quickly, and actually do the legwork alongside the seller (ask your advisor/broker about that last one before you sign their agreement). The right advisor will keep a buyer out of trouble by spotting non-obvious red flags, help them properly structure and finance a deal, and ensure they have a plan to execute a smooth transition. So, who is the right advisor for you?

The right advisor is someone who understands the business model of the company and is an expert in a few key areas: deal structuring, valuation, relationship building, and answering the phone (and/or responding to emails).

Deal Structures

Deal structures can sometimes be straightforward, but often require creativity in order to work for both sides (and lending partners). Understanding which levers can be pulled, where one can give and take, and how to analyze and communicate various structuring options to everyone involved is crucial in an advisor’s role.


Having a solid, defensible valuation is the foundation of a good deal on either side. Without knowing what the company is worth and why, there is no stable ground on which to build a deal. It can’t be a shot in the dark or simply the number that the seller wants to get, the advisor must be able to determine the value of the company using proven methodology. This is important on the buy-side as well, as a good advisor will know if the price is unfair and will be able to clearly communicate why.

Building Relationships

Relationships are everything in deals like this. A sale doesn’t occur instantly, it takes time and lots of work with both parties relying on each other at various points within the deal. An advisor must be able to establish and nourish good relationships throughout this process, despite the fact that both parties have directly opposite incentives. Being a good sales person isn’t enough.

Represent Your Business

From the early going when fielding tons of inquiries from interested potential buyers, to the very end coordinating details with all involved parties, the advisor/broker is the first person to get the call, text, or email whenever there is a question, a problem, an update etc. At the very least, make sure that your advisor is one that will answer the phone.

My favorite thing about buying and selling small businesses is how important it is to the people involved. No matter where you are, what you do, or how big your company / target is, your advisor should understand how important that deal is to you.

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