According to Phil Pastorini, a veteran business broker in Maryland, working with other brokers is the best – and worst – part of his job. This is no exaggeration, he says. It is literally the difference between success and failure.
“Business brokerage is one of the industries in which you want more, not less, guys out there, working your territory, so to speak,” he explains. He is calling from outside a lawyer’s office in Annapolis before a closing on a pair of dry cleaners in a nearby suburb. “You need colleagues dredging up leads on businesses for sale. I have literally thousands of buyers in my database. I need sellers and that’s what the new guys do well.”
Phil says most of the deals he is working on at any given time involves brokers in his firm and occasionally, from outside. After so many years in the industry, most of his listings are repeat business (former buyers looking to sell) or referrals. But there are never enough, he says.
“My clients are constantly asking for new businesses. so when the new guys get them, I’m all over them. But….” he continues, taking a deep breath. “There’s always the hoarders, as I call them. These guys who think it’s better to hold onto a listing and try to get both ends, rather than share and get the deal done. It never works for them. My guys are seasoned. They have money. They’re ready to go. And these guys will ignore them because they want 100 percent of the commission.
“Penny wise, pound foolish,” he says, laughing.
COOPERATION BEATS COMPETITION
Josh Factor is president of Vertica CRM. He provides specially built technology platforms for business brokerage companies to 100’s of firms across the United States and in 10 other countries, including Phil’s company. When told this story, he animatedly agrees.
“It’s funny that Phil used that penny wise, pound foolish analogy because it’s perfect for this,” he continues. “So many brokers lose out on deals due to a colleague holding onto listings, waiting for a big payday that might not happen. It does happen for some, but really rare in comparison.”
Josh used to be a business broker. He has points in his software that serve niche concerns like broker cooperation.
“Brokers need to keep track of each other and each other’s clients in order to make deals happen. Any given buyer can drop out of a deal for a hundred different reasons. You need to have a lot of balls in the air. And new brokers should really work with experienced brokers to close deals and get checks.”
Phil closes with a story.
“One broker in my firm had a huge listing in northern Virginia. Payroll services. I had a buyer but he said he had a guy ready to go. Kept saying for months that it would close this week or next week or next month. We gave up on it. Turns out, he had no concrete buyer. He just didn’t want to share. My buyer found out about the listing at a business conference. they made a deal over the weekend. No brokers. No commissions!
“Can you believe that? If he hadn’t been so greedy, we both would’ve benefitted! Suffice it to say, that broker regretted it, almost as much as I did,” he says, laughing before excusing himself to go close his dry cleaner deal.
Joshua Factor is the founder of Vertica CRM. A software company dedicated to helping Business Brokers and M&A professionals work more efficiently through technology. For more information about their main product, Business Brokers CRM, visit www.BusinessBrokersCRM.com or call +1 212 381 4994 in the USA or +61 385 184 759 in Australia.