Business brokering has traditionally lagged behind other industries in adopting technology and systems. Many firms operate without a CRM or without a unified, organization-wide CRM. This approach inevitably limits growth and can even set the firm up for failure. Brokering is inherently complex. Why willingly make it harder with inadequate tools?
Goal: Demonstrate why business brokers need a CRM
What Makes a CRM Essential for Business Brokers?
A CRM serves as the central repository of a firm’s data, organizing it into a format that is both searchable and actionable. For business brokers, who operate in a highly nuanced and relationship-driven field, this is especially crucial because:
- Relationships: You build trust. A CRM helps you nurture those relationships at scale, reminding you when to follow up, surfacing past conversations, and ensuring smooth transitions within your firm.
- Prolonged and Complex Sales Cycles: Each deal is unique. A CRM provides the structure to navigate intricate negotiations, track multiple stakeholders (buyers, sellers, advisors), and ensure no detail slips through the cracks. Remember, these aren't just transactions; they're often life-changing events for your clients.
- Two Long Sales Funnels: You're selling to both sellers and buyers, each with their own journeys. A CRM gives you the visibility to manage both effectively.
- Massive Data: The US is awash in small businesses. A CRM allows you to sift through this ocean of potential, identifying promising leads and tracking your interactions with them.
- Document-Driven: Due diligence generates mountains of paperwork. A CRM provides a secure and organized repository for all your documents.
Business brokering checks al of these boxes.
Relationship
Relationships are the heart of business brokering. While building connections is critical, maintaining and nurturing those relationships is equally important. A CRM allows brokers to do this at scale.
- Stay Connected: A CRM reminds you when to follow up and highlights past interactions, helping brokers address roadblocks or KPIs to keep deals moving forward.
- Continuity: When relationships transition from one broker to another, a CRM ensures nothing is lost. This makes the brokerage firm more valuable, not just to its principals but also to prospective sellers.
- Seller Confidence: Sellers want to work with firms that demonstrate structure and professionalism. A robust CRM shows that the brokerage is prepared to handle the complexities of selling a business.
Prolonged and Complex Sales Cycles
No two deals are identical in business brokering. Each transaction is nuanced and tailored to the specific business and buyer.
- Deal Structuring: Whether it’s an asset sale or a stock sale, brokers must provide bespoke solutions.
- Stakeholder Management: Brokers mediate between buyers and sellers, who often have conflicting goals. Additionally, deal teams—including accountants, attorneys, and consultants—add layers of negotiation and approval.
- High Stakes: For sellers, this is often the most significant liquidity event of their lives. Brokers need to stay organized to manage the high stakes and prevent mistakes during due diligence and negotiations.
Two Long Sales Funnels
Business brokering involves two parallel and iterative sales funnels, each with a long timeline:
- Listing Sellers: Prospecting sellers to list their businesses can take years.
- Finding Buyers: Once listed, finding and qualifying buyers for those businesses can take upwards of a year.
A CRM helps brokers track and manage these long cycles, ensuring that no opportunities are lost.
Massive Data
The sheer volume of SMBs (small and medium-sized businesses) in the United States means brokers deal with vast amounts of data. Structuring this data to make it actionable should be a top priority.
- Sales Cycle Insights: A CRM allows brokers to quickly identify where a prospect is in the sales cycle and see the company’s interactions with that prospect.
- Team Access: Anyone in the organization can access this data, ensuring consistency and efficiency.
Document-Driven
Selling a business involves managing a mountain of documents—from collecting data from sellers and their teams to sharing relevant information with qualified buyers.
- Secure Sharing: Confidentiality is critical in business brokering. A CRM ensures secure storage and sharing of sensitive documents.
- Tracking: Brokers can track which documents have been shared, ensuring transparency and accountability throughout the sales process.
What are the downsides to use a CRM?
- Input and Maintenance: The effectiveness of a CRM hinges heavily on the quality of the data entered. Inaccurate or incomplete information can lead to poor decision-making and wasted effort. Data entry can be time-consuming and tedious, often leading to incomplete records. Moreover, many organizations struggle to effectively utilize the data within their CRM, failing to extract meaningful insights or leverage it to improve sales performance. Furthermore, some CRMs have complex interfaces that are difficult to navigate and understand, leading to user frustration and low adoption rates.
- Cost: Data is arguably the most valuable asset of a business broker. Protecting that data as well as making the data actionable is highly valuable. Implementing and maintaining a CRM involves significant costs. These include upfront licensing fees, recurring subscription costs, and potential costs for premium features. Integration and customization can also incur professional services fees. Training your team to effectively use the CRM can require time and resources, either through internal training programs or external consultants.
System oriented sales teams, and individuals win every single time and a good CRM allows your brokerage firm to scale, say organized and provide a higher level of service to your clients.