True Grit 2025
True Grit 2025
It is difficult to predict the future of business sales yet, easy to hold a negative view. To me, the truth is that the business of business broking is edgy regardless of the times. There are dozens of reasons that I could see for making that comment but the central point is that a conflict of individual interests and a struggle over resources.
However, each Broker is casting their thoughts, hopes and aspirations for next year. It is the season for it. My take on the mood of the future in selling businesses is rather based on trends that I have noticed through my deliberations during 2024. Some of these trends are not unlike the frog in a basin of water being gradually heated up and not reacting to its inevitable termination. Yet, some issues are suddenly thrust upon us with gigantic impact potential. Some become more defined and entrenched as they become the status quo.
There is a general agreement (for whatever reason), that the Australian economy is challenged and that we are in dark times. How does this challenge our buyers and sellers? Obviously, the answer is multi-tiered and complex. But, from a business broker’s perspective the major issues that we have to address in 2025 are the degree of damage that has been done to the businesses, the decreasing pool of suitable qualified buyers and the general access to capital. To survive as a broker in this environment, there is a more desperate need to embrace, define and overcome these hurdles.
Remember, I am a generalist broker. (I do not specialise). Furthermore, I mainly operate in the small business space with business sales ranging from $0 to $3,500,000. Therefore, the challenges that I am introducing are from that perspective with their peculiar bias.
To overcome the lack of funding available to the majority of my clients we have to consider options that are still alien for the Australian business seller. For example, more and more, I am negotiating around the need for vendor finance. Earnouts are too sophisticated for the majority of my client base. The main reason for this is that the business owner is so close to financial ruin that s/he is exhausted and cannot sustain the business for much longer. It is too risky for them to expect the business to perform for long enough to honour their contractual obligation in an earnout.
Vendor finance is a loan from the seller so that the deal can be closed. It is flexible with many and can be supported with many conditions and access to assets. The buyer gets this help and is thereby able to pay other costs that are rarely adequately catered for in the decision to buy a business. These costs include the landlord and lease requirements.
A business broker must consider the quality of the buyers that they work with. This is a professional duty of care prerequisite and often needs courage to walk away from a sale where the buyer is doomed to fail. Some businesses can be a training ground for inexperienced buyers. Such businesses are normally well run, profitable in their niche and have good systems in place. This transformation was discussed and demonstrated in Gerber’s E-Myth Revisited. Namely, McDonalds The business is essentially run by 18 year olds because of this systemisation.
If you are in the broking industry much of what I have said is already known or being experienced. My main message for 2025 is to call for a new toughened level of broking. It is easy for brokers to walk away in difficult times and look for easier pickings. I am calling for a new breed to assist in the sale of business. This new breed will enhance mutual prosperity for those involved and get the job done!
As a business broker, I would like to consider out of the box thinking or as we in Australia say; out of the square. Most people are secure in the knowledge that out of the square thinking is held to be superior, creative and intellectual. It is perfect for the oblivious wine bibbers, those with long memories, or our students of history. You will agree that the word square in decades past was something wholesome and good.
Square Meal, Square Deal, Square Dance and for the military: Squared Away. Of course, in the same time frame, the new derogatory was, “Don’t date him. He’s square”. If you as a business broker say that you are going to sell a business by thinking out of the square, I encourage the seller to: Run! You see, this is not what the seller wants from one of the most important professional action actualizers in his/her arsenal. Brokers are the primarily fulcrum in a successful sale. Believe me, sellers do not want interaction, indecision and fairy floss around the sale of their business.
I draw your attention to a frustrated Conan the Barbarian, as he becomes impatient with the lack of action he utters with an Austrian accent “Enough talk”. This action by Conan overcame the hold-up, consequently leading them to success against great odds. His behaviour also serves as an endorsement of John Wayne, as he portrays the hard, living, tough Rooster Cogburn in True Grit. Rooster was hired because he would get the job done regardless of his social inaptitude. He had True Grit. This means that we can easily forgive his hard, gruff lack of finesse and grow to trust Him.
Grow to respect him and feel a sense of security. He did not give up. He was task committed, regardless of the very real obstacles that he encountered.
So, for the purpose of weathering 2025, let me tell you, it is better for the seller to get an in-the-box crafts person as their business broker. S/he must be solid, resilient, and task focused. They will of necessity ruthlessly support a systematic solution to their endeavours. No “airs” and “graces” here. You will be just getting the job boxed into the four walls of legal considerations, professionalism, negotiation on your seller’s behalf and experience. Such a box is successful as it adequately and methodically constrains the buyer to the point of achieving a jackpot settlement of the business sale.
That is true grit. After all, would you prefer to capture a buyer that is entirely penned in a business broker square, or one that is an open pontification paddock? This is a dyed in the wool business broker.
Tags: selling business broker tips 2025
About the author
Ray Dye
As a previous multiple business owner in South Africa, Canada and Australia, Ray has an exceptionally high level of expertise when it comes to knowing ...
