We recently sat down with Wally Kocemba, Chairman and CFO of Calhoun Companies, to pick his brain about all things business brokerage. With more than 30 years of experience in business ownership and commercial brokerage, he has some of the best insights in the business.
What does a business broker do?
The overall job description for a business broker is similar to that of a coach, with the goal of finding the best buyer possible to fulfill the wishes of a business owner looking to sell their company.
During the sale process, the business broker is the one who advises the owner of the many different aspects of the transaction and outlines the journey they will embark upon together. Usually, this process starts with a Brokers Opinion of Value (BOV) that will be compiled from financial records, asset values and Intellectual properties. The goal of the BOV is to determine what sale price a business owner should expect after successfully going to market and finding the buyer that is the best fit for their needs. Brokers then advertise the business for sale, screen buyers, facilitate meetings, assist in negotiations, and, with the help of attorneys and accountants, guide the transaction to a successful closing.
Usually, the owner of a business contacts a broker by responding to an advertising campaign, search on the internet, through an accountant/attorney, or connection with a business owner who has used a broker in the past.
Why can’t I just sell a business on my own? Do I really need a broker?
The owner of a business can certainly sell his or her own company, however, the time commitment they will need to make to the sales process could be detrimental to their business in general. Selling a business is a full-time effort and should be done by a professional that knows the process and will vet buyers without disrupting the owner’s ability to run their business on a daily basis.
Brokers are adept at attracting buyers while at the same time maintaining confidentiality. It is crucial that customers, clients, and employees don’t find out about the potential sale of a business until the timing is right.
When hiring a business broker, an owner should look at their track record and seek out reviews to make sure they are dealing with a reputable company. By utilizing a broker, a seller will usually receive more in sale price than what it costs in commissions paid to the broker.
How has the process of buying and selling businesses changed over the course of your career?
The basics of the process have not changed much, but technology has certainly sped up the way in which brokers get the process done. What used to take days or sometimes weeks can now be done in a matter of minutes. While computers have increased production immensely, this is still a business of bringing people together.
Is there a deal you remember even years later?
One of my earliest sales was to a very close friend of mine who wanted to buy a manufacturing company. The company I had listed was a manufacturer of wood shims. He ended up buying the business and ran it for over twenty years, becoming the largest shim maker in the country. He eventually sold his business to his employees.
What’s your wildest deal story?
There really isn’t any one deal I would consider “wild.” I will say that they all are interesting in their own way, and bringing a deal to its conclusion is always very satisfying. I always find it fascinating how people develop businesses that satisfy their needs, both for themselves and the loved ones they provide for. Business owners are unique people and I love to join them in the final stages of ownership in order to help them fulfill part of their lifelong goals.
What do you think the future of business brokerage looks like?
I think the future of business brokerage is very bright, seeing as people are continually finding new ways to make a living. Good businesses will always be of value to those who own them and to those that would like to buy them. Because of this, the need for a professional business broker should always be a part of the process.
You and your son helped build Calhoun Companies. What are you most proud of?
Andy and I bought Calhoun Companies in 2011 and have developed a team of partners that have helped us rebrand the company, modernize the technology and plan for the next 100 years. My comfort is knowing that the strength of the company is in the very capable hands of my son and all the employees and independent contractors that make up the very close-knit family known as Calhoun Companies.