Am I dealing with an incompetent broker?
Unmotivated or uncooperative sellers can make even good brokers look bad.
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Question:
How can you get past a bad, or just plain incompetent, broker? The latest example is waiting for more than 3 weeks for any kind of financial paperwork for a business we were interested in. The broker always has an excuse handy - usually it is the seller's fault - for the delay. We have to go through the broker since the business is listed through them. Since this particular business was already in a decline due to the owner opening another, this delay has killed the deal.
Answer:
I can certainly understand and sense your frustration. While I know you have pinpointed this on the broker, and there's no doubt that like all industries there are good and bad ones, it just seems bizarre why any broker representing a seller would deliberately delay providing information to a prospective buyer.
There are really only three possibilities here:
- The broker may be incompetent
- The seller is lax in providing information
- The broker does not believe you are a serious prospect.
While it is possible that the broker is not competent, keep in mind that their entire compensation is performance based so it simply does not make sense for them to not provide any additional information that is reasonable. In my experience the seller or broker may not always be willing to part with certain financial information unless an offer is on the table. If this is the case then at the very least they should let you know.
If however the seller is being lax in getting data to the broker then the broker's hands are tied.
Having said all this, what do you do with this deal or future opportunities when you encounter this situation? My recommendation is that you need to have more direct involvement with the seller. This does not mean circumventing the broker; not at all! In fact, just the opposite may be true. If the seller or broker is not cooperating then arrange a face to face meeting (or conference call if necessary) with the seller and broker and let them know point blank what information you expect and question these delays.
It's useless to sit idly by while an opportunity evaporates. However, my gut tells me that in this particular instance, you're simply dealing with an unmotivated seller and perhaps a broker who has not put his seller to the wall in explaining how critical it is to provide enough meaningful data for any prospective buyer to make a decision on the business.
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Richard Parker author of: How To Buy A Good Business At A Great Price(TM), the most widely used reference resource and strategy guide for buying a business. He has purchased ten businesses in his career and has helped thousands of prospective buyers worldwide learn how to buy the right business for sale. He is also founder and President of Diomo Corporation - The Business Buyer Resource Center. Richard Parker is also the author of BizQuest's Business for Sale Blog |