Lessons from Ken Allsop’s 25 Years as a Business Broker
Lessons from Ken Allsop’s 25 Years as a Business Broker
With a business career spanning over 50 years (and still going strong), you would expect Ken Allsop, the director of ABS Business Sales, to have an interesting history. And he does.
I had the opportunity to discuss what we could learn from his experiences and his advice for up and coming brokers.
We started with a quick account of his journey to business broking.
“I worked for a guy who owned a transport business and a lighting store. I managed the lighting stores as we expanded the number of stores,”
“I became interested in stage lighting, so I established a very successful business that did the lighting for shows in Brisbane, Sydney, and Adelaide.”
When Ken’s previous employer started a residential real estate agency, he pestered Ken for two years to join him and sell commercial real estate.
When the agency became the preferred agent for banks selling distressed shopping centres, Ken relented. It was here that he learned his first valuable lesson.
The Early Lessons
“These guys made a cash offer for this shopping centre, but I wouldn’t take it to contract because it was too low. Six months later, the centre went to auction and sold for the price I thought was too low,”
“So I learned, shut up, don’t argue, get the offer on paper and then haggle.”
Ken started business broking to fill in the gaps between shopping centre listings.
At that time, there were less than five specialist business brokers in Brisbane, and Ken was the “young gun” among them.
ABS Business Sales commenced 25 years ago when Ken stopped selling commercial real estate and focused exclusively on business broking.
Ken recalled an early listing of a restaurant, attached to a garden center, with a valuable freehold.
“The business was very profitable, and we had monthly financials to support the sale. Unfortunately, one of the owners didn’t want to sell and actively tried to stop the sale”
“I learned the importance of making sure everyone is on the same page to avoid wasting your time,”
Ken admitted that specific deals become hard to recall after 35 years of business broking, but that one is still a vivid memory.
The ABS Way
To maintain consistency of client and customer experience, ABS has rules and systems in place.
All business profiles for new listings are prepared centrally, again for consistency and as a service to the listing broker.
ABS operates from a 500sqm office with four admin staff. The brokers are all individually licensed and essentially operate as autonomous businesses with shared access to facilities and admin support.
“We are on a dozen listing websites,” Ken shared. “So, if they were to do it themselves, they would need to pay for those websites as well as the office space and staff.”
Ken strongly believes in being fair. “We try to be fair with our brokers. If you aren’t fair, they won’t stay,” he commented. “That even extends to the leads that come into the office. We have a roster system to allocate those.”
When pressed on how this compares to other brokerages;
“I don’t have time to worry about what other brokers are doing. They have their systems, and we have ours.”
“I’m big enough and good enough to look after myself and be proud of what I do.”
ABS does not specialise in any industry, but each broker (including Ken) has a particular focus.
Ken has seen quite a few changes over the 25 years as a business broker.
“When I started, we were restricted to charging residential real estate commission rates. On that basis, it wasn’t worth listing businesses at the small end of the market,”
“But now we work on a base of $20,000 plus 8% of the excess over $100,000. The commissions have really been the most noticeable change.”
What it Takes to Be a Business Broker
“Business broking either suits you or it doesn’t,”
“You’ve got to work hard and put in the hours. It won’t be easy, and there will always be someone wanting to haggle. Enjoy the haggle,”
I shared with Ken my observation that all the ABS brokers had extensive business experience before becoming business brokers, so I asked whether he thought that was a key requisite for anyone wanting to become a broker.
Ken agreed that business experience was a strong background, but he also pointed out that strong business experience does not guarantee you will be successful as a broker.
Ken cites the lack of training for new brokers as being a challenge.
“REIQ doesn't really do any business broker training. They’re starting to get involved with AIBB and do joint training,”
Ken’s advice for anyone considering establishing a new brokerage would be;
“Make sure you have very strong financial backing. You don’t open a business in five minutes. You need to establish a brand and reputation, and to do that you have to convince people to list with you. They would make more money working inside a large, well-established brokerage (like ABS).”
Time for Expansion
The future for ABS will focus on expansion.
“Almost a year ago, we opened in Sydney, and I’d like to open in Melbourne as well,” Further down the track, Ken would also consider Adelaide, as he spent many years there.
The business case for this expansion is clear to Ken.
“People are moving from Melbourne and Sydney to Brisbane,”
“They sell their home down there for a couple of million, buy a home here for a million, and have a million in their back pocket to buy a business. They are buying a lifestyle.”
Ken argues that, by buying a business, they can earn a higher income than they would working for a boss and still enjoy the lifestyle they want.
With expansion clearly on the agenda, I asked Ken whether he would consider increasing the Brisbane office footprint. His answer: “Yes. My overheads don’t increase significantly with each additional broker.”
As the profession evolves, Ken is not fazed by competition “There’s only about 1,000 of us in Australia and how many businesses?” - there’s plenty of businesses to go around.
Ken reminds us that business broking isn’t just about making deals - it’s about understanding people, adapting to change, and of course, enjoying the haggle.
Tags: business broker tips feature
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