The Tribune

By SIMON COOPER Res Socius PEOPLE often stop me in the street these days to ask me exactly what a business broker does. I'm always happy to oblige, because some turn out to be sellers and others, buyers. Like any job, I guess the secret's in the skills - rare skills that can take years to hone, and require a specialist aptitude to use. Let's face it. Getting something right first time is more a matter of sheer luck than good judgment. Most business sellers and their aspirant buyers are novices. No wonder things invariably go so horribly wrong. Statisticians believe that only 2 per cent of private business sales convert into success. My job is to hugely improve that probability. And that takes time and guidance. LINING UP THE SELLER I begin with a no-holds-barred informal chat, following which the owner could decide to go it on their own, shut down the shop or appoint me as their agent for a sale. If things are positive, I conduct a pre-sale audit to determine the profile of the likely buyer, and how much they might be willing to pay, too. If the seller is unable to accept that price I usually walk away. The sad truth is that value lies in the buyer's eyes, not in the seller's hopes. The actual sale can often go quite quickly after that, because we agree on what we're looking for, and can bypass the time-wasters. Moreover, I sometimes have a buyer in my bottom drawer already. LINING UP THE BUYER My first job is to manage expectations. It's natural to want a great deal of something for absolutely nothing. However, the world does not revolve on that axis. Once we're out of dreamland we can agree what's reasonable, including my commission, which is why I do this in the first place. After I have introduced the buyer to a prospect they like, the next step is drawing up the purchase offer, subject to a due diligence survey. And that's where I make a deal of difference. The road to buying businesses is full of pot-holes. I understand these. I help the parties navigate around them. ONE THING I NEVER DO I never, ever involve myself in the due diligence, though. That's because it is the job of the seller to provide the financial and other information, and the buyer to analyse it in detail. Unfortunately, I can only advise. Equally unfortunately, there are still horses around that you cannot lead to water, let alone make them drink. ONE THING I ALWAYS DO After that, I stick around to make sure the parties abide by the rules they agreed on. This includes payment of the purchase price, taking over stock, going through the training, and managing staffing issues. My role is to be available as an intermediary during this transitional period. When it is over, I withdraw from everything but friendship. And that's what business brokers do, in case you wondered. * NB: Simon Cooper is a founding partner of Res Socius, a business brokerage firm authorised by the Bahamas Investment Authority that facilitates the sale and purchase of businesses. Contact 636-8831 or visit www.ressocius.com.