Reducing Risk Is Your Only Job
Why would reducing risk be your only job?
Because, as a business broker, you deal with humans. And at their core…at all our cores…humans are scared, confused, worried creatures with hopes, goals, dreams, objectives, and trauma.
Lots of trauma.
Life is full of trauma. Human existence involves moments of joy and happiness in between struggle and pain. I am not trying to be negative or doom-and-gloom or pessimistic, but it is very true. Life isn’t easy; things happen. The more time you spend on the planet, the more things happen.
Physical pain. Emotional pain. Challenges with others. Seasons of financial instability, or health challenges, or loneliness.
A big part of our brain is focused on survival, fitting in with the tribe, passing our genes on, and being easy. I have written and spoken about it a lot, and how this is so important to understand for anyone in a sales role.
As a business broker, you are in a very challenging sales role. Like most elaborate, relationship-focused sales processes, the moment your business owner client agrees to get your help with listing their business is only the BEGINNING.
Humans are risk-reward-calculators in motion
The more you understand humans, the more effective you will be. This is why I said that your only job is to reduce risk.
Humans are risk-reward-calculators in motion. All day, every day.
What is the risk of this decision? What is the reward?
Choose the wrong restaurant – probably not the end of the world. Choosing the wrong broker or failing to sell your business will probably feel like a giant fail after everything you have built.
“Humans are risk-reward-calculators in motion.”
We live in our comfort zone.
Everything outside of our comfort zone falls into one of two categories:
- Unknown
- Known and painful
Known and painful things are to be avoided. It hurt the last time I tried it, so definitely not going to do that again. Related to a person, place, or thing.
Our mind creates negative associations with what has caused us pain and will do all it can to keep us from experiencing pain again (remember – the brain only cares about self-preservation).
Unknown things are…well…unknown.
So, there is a built-in level of risk in not knowing what will happen. Of course, different categories will carry more or less risk.
As a broker, you are an unknown
As a broker, you are an unknown in the mind of that business owner. Until they know you, they don’t know you.
Your first job is to help them know you and realize they can trust you. This is done through your credentials, your reputation, and your experience. It comes across when you speak with them, when you meet with them, and they can look into your eyes.
Keep in mind that 90%+ of how we communicate with other humans is non-verbal – body language, energy, eye contact, etc., which is why it is so important to get face-to-face with someone you want to build a relationship with.
Yes, you can do it virtually, but it will take longer, and the trust will only go so deep.
The business selling process is another unknown
Once they get to know you, the next big unknown is the business selling process.
They have never gone through it before. They probably won’t go through it again. All their eggs are in this one basket…and they trust you to carry that basket to the finish line.
Since they don’t know the process, it’s why they fall for those direct offers from buyers or firms that just find them buyers (without being a ‘broker’).
They don’t know better and it seems safe and easy. But what is the safest route for them? What will help reduce the most risk while yielding the greatest chance and the biggest reward?
That is what you have to show them.
The Prospect Witness Protection Program
And once you show them, remember that they are always seeking safety. Back in their comfort zone.
If you have ever had a business owner commit to moving forward with you, only to change their mind, ghost you, cancel their agreement, avoid accepting offers, that is them retreating back to the known of their comfort zone.
I call it the Prospect Witness Protection Program.
It’s like they disappeared, changed their identity, or moved to a different city. All to avoid you. And they did – they stopped feeling safe and went back to their regular life.
That was comfortable and known.
“They stopped feeling safe and went back to their regular life.”
SAFE
Which is why your one job, your only job, is to reduce risk. It’s to make them feel SAFE, which is an acronym I created years ago:
Successful At Fear Elimination
Eliminate fear, and you will have a client.
Eliminate fear for your client and all parties, and you will close transactions.
Featured Podcast Episode
Most business owners either overvalue what they have or, surprisingly, think their business is worth nothing and plan to shut it down. Mitchell Beinhaker shared how he’s shown owners that what looks like a “sunset” could actually be a sale worth hundreds of thousands.
Lesson: Don’t assume! Whether you’re an owner or broker, always investigate the potential sale value before closing shop.
Avoiding Transaction Nightmares
Too many small business deals fall through due to messy or missing legal documentation. Mitchell Beinhaker explained the risks:
- Missing stock certificates and operating agreements
- Unknown business partners surfacing at the wrong time
- DIY legal shortcuts that become expensive fixes
Tip: Start clean, or work with a pro to organize your documentation before you go to market.
Takeaway Quote of the Week
“Successful people do the things unsuccessful people are unwilling to do.” — Mitch Beinhaker sharing timeless advice for brokers, owners, and professionals
LISTEN TO THE FULL CONVERSATION
Click here to listen to the full episode ➜ https://businessbrokergrowth.com/podcast/
Until next time,
Jason
PS. Take the Digital Impact Assessment (free) →https://get.businessbrokergrowth.com/assessmentNL
