Winter 2022
The insights and opinions expressed herein are those of the authors and do not represent professional counsel nor an endorsement by the IBBA.
A Q u a r t e r l y D i g i t a l P u b l i c a t i o n o f t h e I n t e r n a t i o n a l B u s i n e s s B r o k e r s A s s o c i a t i o n
T H E B E S T I N S I G H T S O N B U Y I N G A N D S E L L I N G S M A L L B U S I N E S S E S
Plus the Le�er From the
Chair and Insights on:
Remembering
Tom West
Industry Pioneer & Friend
with a special le�er from
his son, Ron West
+ Marketing Opportunities
+ Best Practices in Business Brokerage
+ Establishing a Realistic Asking Price
+ Working with Brokers
and More!
WINTER 2022
The best insights on buying
and selling small businesses
In this Issue
IN MEMORY OF INDUSTRY PIONEER, IBBA FOUNDER, AND FRIEND, TOM WEST
LETTER FROM THE CHAIR
MARKETING OPPORTUNITIES FOR BUSINESS INTERMEDIARIES
BEST PRACTICES IN BUSINESS BROKERAGE - SPECIALIZATION
HOW DO I ESTABLISH A REALISTIC ASKING PRICE FOR MY BUSINESS WHEN I
AM READY TO SELL?
WORKING WITH BROKERS
LEGISLATIVE UPDATES
12
16
21
25
31
WINTER 2022
In Memory of Industry Pioneer,
IBBA Founder, and Friend, Tom West
When asked to write about my dad, my chief desire was to honor
him by somehow communicating his passion and love for the
Business Brokerage Industry. As I researched our archive of
material, I came across this 2002 article. In it, Dad has already
communicated what I hoped to convey, so I have decided to re-
publish his own wri�en words which best reveal the heart he had
for his industry, the IBBA, and his many colleagues over the years.
by Ron West
Tom West
June 17, 1936 - December 4, 2022
FORTY YEARS IN BUSINESS BROKERAGE: LESSONS LEARNED
BY TOM WEST, JANUARY 2002
Dad penned these words in celebration of 40 years in business brokerage and the 20th Anniversary
of his monthly newsle�er, The Business Broker. His contributions will forever benefit the Business
Brokerage Industry. We love and miss Dad deeply and will be reminded of him at every turn.
With gratitude,
Ron West
I am always asked by people looking into the profession, “What does it take to be successful in
business brokerage?” For well over 20 years I have been writing about it, and for over 40 years I
have tried to come up with an answer that works. Certainly, if I had the magic answer or answers,
we wouldn’t be able to keep up with the demand for the book that contained them. However, when
asked, I advise people to, in the beginning, stick with the “bread and bu�er” businesses that are
priced under $1 million (and way under – about $100,000 to $500,000 tops). In other words, don’t try
selling General Motors. Stay with the basics and don’t deviate. Everyone who goes into the business
wants to think outside the box when they don’t have a clue what’s inside the box. The basics have
worked since the days of the Old Pro, and they still work today. Listings are the key to success – that’s
it: six words. I don’t care how you get them, within reason of course, but you have to have them. So,
mail, telephone, cold-call, or do all three; you just have to do something to get listings.
Over the years, the cold-call has fallen into disfavor. Referrals seem to be the dominant method of
ge�ing listings. So, I guess I should tell the new broker that all he or she has to do is wait for the
phone to ring. It seems to me, however, that if everyone is waiting for the phone to ring, the new
broker might get a lot of listings by cold-calling. If timing is everything, then being at the front
door, so to speak, when a business owner wants to sell is the best place to be. It’s my experience that
business owners take a long time to make the decision to sell their business, but then the first person
who asks for the listing will most likely get it. I have read that in residential real estate, the situation
is similar. When a home owner decides that it is time to sell, the first realtor there gets the listing.
It still sounds easy, and when I tell people what one has to do to make a living being a business
broker, I’m sure they say to themselves that they can do it and be successful. On the surface, it
does sound easy, so why do so many fail or leave the business? Business brokerage has always
sounded like a great way to make a living. Those from the corporate world tell themselves that they
understand business, so selling what they know should be a piece of cake. Others tell themselves
that they are hard workers and they like people. Our favorite is the person who has looked for a
business through business brokers and thinks that he or she can do a be�er job.
So, why isn’t there a business broker on every corner? The simple truth is that it isn’t that easy. In
theory it is, but in actual practice it isn’t. You’re dealing with a business owner who has decided to sell
and probably won’t reveal the real reason. He or she thinks that their business is worth a fortune,
either because their accountant told them it was, or simply because of the sheer desire to make a lot
of money on its sale. It’s the old story of the two brothers who owned a small business and wanted $2
million for it. When asked how they decided on the price, they very simply said, “Well, we both want
to be millionaires.”
WINTER 2022
In Memory of Industry Pioneer,
IBBA Founder, and Friend, Tom West
by Ron West
Buyers, on the other hand, think that the reason for sale is that the business is no good; and even
if it is, it’s way overpriced. And, into the middle of all this steps the business broker, full of good
intentions, trying to do the right thing, earn a commission, and, as Chef Emeril says, “BAM!” Then,
assuming that the business broker brings both parties into the “real” world, he or she has to deal with
the naysayers: the lawyers, the accountants, the well-intended friend, etc. The seller should be ge�ing
more money; the buyer shouldn’t be buying his or her own business; it’s too risky; “tell me again why
the seller is selling”; “what do you mean the buyer has to get a bank loan?” If you’re a business broker,
you have heard it all. And, then when it looks like everything is going to come together, the seller says
that if he sells he doesn’t know what he will do, and the whole thing unravels.
Some business brokers can’t deal with these types of situations, others can’t deal with the people, and
some just get plain discouraged. A�er all, there aren’t many jobs where you work hard trying to sell
a business, go through what one has to do to sell it, and, then have it fall apart at the very end. It’s
ge�ing to the end, mentally spending the commission, and then watching it tank that drives people
from business brokerage.
I have said repeatedly that business brokerage is not rocket science. However, it does take a special
person to live with the frustrations that can develop in pu�ing a sale together. I have become
concerned that we are creating a mountain of paper, valuations, profiles, and the like, and what
the seller wants is for us to sell his or her business at the highest possible price and in the shortest
period of time. Sometimes I think we spend more time trying to convince the seller that he or she is
overpriced, when if we spent the same amount of time trying to sell it, we might just get the job done
in a fashion closer to what the seller wants.
I hated cold-calling and I would hate it now; but if the choice were to be a business broker and cold-
canvass or not to be one, I would be out hi�ing the streets. Somewhere along the way, we have tried
to make it easier. Maybe it started with VR and our a�empts to sell business brokerage as a business.
Perhaps in our enthusiasm to talk about the profession, we have made it sound too simple. If so,
maybe I should apologize; but I think that, unfortunately, we have somehow forgo�en to have fun.
Everything sounds so serious: business valuation, tax ramifications, stock versus asset sale, agency
disclosure – business broker conversations seem so ominous today. When business brokers used to
get together, the war stories abounded, and everyonelaughed and had a good time.
The first issue of The Business Broker was June, 1983. My daughter had it framed and it sits proudly
on my office wall. Since then, besides my stint as executive director of the IBBA, I have worked
diligently creating educational materials for my profession. My son is following in my footsteps,
and he will be able to take Business Brokerage Press to the next level. As I said earlier, I never, for a
minute, was interested in doing anything else that wasn’t connected to business brokerage. I have
been fortunate in that I have been able to observe the profession from almost every vantage point:
sales agent, office manager, office owner, president of two large business brokerage firms, executive
director of the IBBA, educator, speaker, and writer.
Business brokerage is a great business! Who knows what I would be doing if it weren’t for business
brokerage? It has been good to me personally, financially, professionally, and intellectually. Barbara
and I have made many good friends because of business brokerage. The IBBA conferences are like
old home week for us. As I said before, perhaps I am guilty of being too enthusiastic about it, but this
is because it has been so good to me and my family.
Yes, the profession has changed. In fact, it used to be a business and now it is, justifiably so, a
profession. However, when I visit with many of the most successful business brokers in the world,
thanks to the far-reaching membership of the IBBA, I realize that the essential nature of the
business has not changed. Technology is taking the business forward, and there are more rules
and legal issues to contend with; but what it still comes down to is pu�ing the deal together. I look
forward to contributing to my profession over the coming years. I am indeed fortunate to be doing
something I really enjoy!
WINTER 2022
What A Flight It’s Been!
Randy J. Bring, 2022 IBBA Chair
If 2022 was likened to a cross country flight then, by the time you read this, we are
clearly on our “final approach”. And what a flight it’s been! An incredible year for
our association filled with new performance highs and clear indicators the IBBA
continues to play an essential role in advancing the success of our members, the
professionalism of our industry and the overall awareness of the value we bring as
Business Brokers to buyers and sellers of businesses.
Where do I begin?
With current membership at more than 2,700, that’s about 4 times where we were in 2015 and nearly
twice the number of IBBA members we had at the end of 2019. Clearly, more and more business
intermediaries are ge�ing the message the IBBA delivers a value that exceeds many times the actual
dollar investment.
In September, we released our annual IBBA Member Satisfaction report using the Net Promotor Score
(“NPS”) methodology. The survey’s focus is on one primary question, “How likely are you to recommend
the IBBA’s products or services to a friend or colleague?” Though we’ve had great results in past years,
this year’s score was literally off the chart where IBBA members’ satisfaction was ranked #1 and ahead
of 23 other professional industries. I am especially proud of this important key performance indicator
that strongly states our members’ overall satisfaction with the value our association delivers and the
overall positive direction the IBBA is heading.
Were you in Denver for our Spring Conference? By most feedback we received (we surveyed all
a�endees following the event), our May conference this year scored the highest marks in memory with
the overwhelming majority of our a�endees reporting a “great overall conference experience”. I’ve been
to 20 conferences; this one was the best I can remember…
Our options for continued education opportunities continued to expand this year with the
introduction of new classes and even more opportunities for virtual learning options.
Have you been to an IWEN meeting or virtual event? The IBBA WOMEN’S EMPOWHER NETWORK
continued to grow in 2022 by addressing the unique challenges, opportunities and qualities women face
and bring to our profession. Want to meet and network with some of the best Business Brokers in our
industry? IWEN is where you’ll find them.
This summer, we announced the signing of a historic collaborative agreement between the IBBA and
Transeo (a six country European professional group of intermediaries, banks, government institutions,
researchers and universities) which lays the groundwork for a first time sharing of best practices,
professional introductions, member benefits (including education and summits) and with this, the
unique opportunity to facilitate cross border transaction opportunities. Watch for your opportunity to
get involved with Transeo in 2023.
Earlier this month, we continued our CBI Scholarship program by awarding full CBI scholarships to
two deserving members who will receive the benefit of a CBI education at absolutely no charge. I am
especially proud of this initiative and was gratified by hearing directly from last year’s recipients what
the scholarships meant to them personally and professionally.
Responding to the consistent message from our members requesting a next level in education and
certification, in October we announced our 10 month Master’s Cohort program, a live series of 10
advanced level classes taught by our most seasoned business broker “professors”. The first class has
now been selected and is ready to begin this exciting advanced level of education in January. Watch for
the signup for the next Master’s Program class in early 2023.
LETTER FROM THE CHAIR
WINTER 2022
10
Maybe the single most important initiative your association embarked on late this year is the
IBBA’s Business Owner Research Project. Working with a professional research firm we have
invested in a two-part research study aimed at a) be�er understanding the knowledge and beliefs
business owners have regarding Business Brokers and b) what media channels business owners
currently rely on for information and decision making. Phase 1 of this groundbreaking study is
already underway and entails a quantitative survey of 500 business owners from across the country.
Phase 2 consists of one-on-one business owner interviews. Combined, these insights will give the
IBBA and its members a deep and fact based understanding of how to effectively communicate the
Business Broker value proposition, and where to place that message. Armed with this information,
the IBBA is then prepared to make even more significant investments in marketing and awareness
initiatives for 2023. As an added bonus, IBBA members will receive exclusive access to the research
results, thereby enabling everyone to improve their marketing efforts based upon these insights. I
cannot think of a be�er investment than that which your association is making in this program
as, I believe, understanding our customer when it comes to their “selling mindset” is the key to first
connecting with them and then, delivering our direct message of why they should engage us.
As my term as Chair of the Board of Governors completes at the end of this year, this is my last
Chair le�er to you. What a special privilege I have enjoyed by helping steer this great professional
association which, from member feedback, continues to exceed all expectations. I pass the Chair
position on to my friend and fellow Board Member, Kyle Griffith, who has both the extensive
professional experience and, more importantly, the great passion for our industry that will serve
both our Board and our members so well as your 2023 Chair. I know I speak on behalf of all of our
members in offering a sincere thanks to our Board Members and many commi�ee volunteers who
contribute so many hours behind the scenes to make the IBBA great. And to our Executive Director
Kylene and her amazing staff… the IBBA could not possibly operate at the high level we do without
your immense talents.
I’ll close by sharing with you some advice a wise and seasoned IBBA member gave to me some
20 years ago when I a�ended my first IBBA conference: The secret to maximizing your IBBA
membership i.e. what you get for your money, is directly related to your level of involvement. A�end
a conference, take the classes, teach a workshop, join a commi�ee, provide your comments and