Suppose it were possible to simplify what we do as business intermediaries. In that case, we would be best described as trusted advisors or confidential facilitators between the buyers and sellers of a business deal. One of our many objectives is to help business owners sell their businesses for the best possible price while ensuring buyers get a good deal. In some cases, however, a single intermediary may find it challenging to provide their clients with the best possible service. This is where co-brokering comes in.
To Co-Broke or Not to Co-Broke, Which Will It Be?
I understand that co-brokering is not a popular idea for many intermediaries throughout the world. However, for the Business Brokers of Florida® (BBF) is not only a governing rule of our association; it is a proven fact that co-brokering completes more deals for buyers and sellers. Additionally, this is confirmed in the numbers where almost thirty percent of the deals completed in the BBF in 2022 were co-brokered between our members.
For the unknowing public, co-brokering is a process where two or more intermediaries work together to facilitate the sale of a business. The benefits of co-brokering are numerous, and they can help both intermediaries and their principals. One of the main benefits of co-brokering is that it allows intermediaries to pool their resources and knowledge to provide better service to their buyers or sellers. For example, if one broker has more experience in a particular industry, they can share their expertise with their co-broker, allowing them to provide better advice to their principals.
Another benefit of co-brokering is that it will allow intermediaries to reach a wider audience. However, this mindset could be overlooked by an intermediary who is more concerned about splitting the deal. By working with another intermediary, they can tap into a larger network of contacts and potentially reach more potential buyers. This could be particularly useful for an intermediary who may not have a strong presence in a particular geographic area or industry. This is also an added benefit when an intermediary doesn’t have a specific type of business for a buyer in their inventory, allowing options of co-brokering other firms listings.
Co-brokering can also help intermediaries manage their workload. As many of us have experienced, selling a business can be time-consuming, and it can be challenging for a single intermediary to manage all aspects of the transaction. By working with another intermediary, they can share the workload, allowing each intermediary to focus on their strengths and provide better service to their buyers and sellers.
Additionally, co-brokering can help brokers mitigate risk. Selling a business involves a significant amount of money and many legal and financial factors that are to be considered. By working with another broker, brokers can ensure that they follow all necessary procedures and that their principals and the firms, are protected throughout the process.
Co-brokering can help brokers build stronger relationships with buyers and sellers. By working with another intermediary to sell their business, buyers and sellers may feel they are getting more attention and support. It can help build trust between the principals and intermediaries, leading to future business opportunities.
In conclusion, co-brokering can be a highly beneficial arrangement for business intermediaries. It allows them to pool their resources and knowledge, reach a wider audience, manage their workload, mitigate risk, and build stronger buyer/seller relationships. By working together, intermediaries can provide better service, ensuring buyers and sellers get the best possible deal.
To all my fellow business intermediaries out there, do you co-broke? If not, why?
Joe Shemansky CBI, M&AMI, CM&AP
Business Brokers of Florida