Bonus Episode with Gregory Kovsky

LinkedIn: https://www.linkedin.com/in/gregory-kovsky-460aab7/
Email: gregory@ibainc.com
Website: www.ibainc.com

Jason Cutter [00:00:02]:
You have found the Business Broker Growth show with your host Jason Cutter. This is the podcast for brokers who are ready to stop hoping for deals and start growing their pipeline. Our goal is to bring you strategies, stories and insights that will be a catalyst to move you quickly from transactional deal makers to trusted advisors. Time for Business Broker Growth.

Jason Cutter [00:00:24]:
Hey everybody. Jason Cutter back Business Broker Growth Show. I have Gregory Kovsky. He is President CEO of IBA in the Pacific Northwest. I always want to say Seattle. I know it’s Bellevue, it’s Washington, it’s Oregon. It’s taking over all Pacific Northwest. Gregory, we just finished recording the first part which was amazing.

Jason Cutter [00:00:46]:
So much content in there. How are you feeling after that first part?

Greg [00:00:51]:
It was a enjoyable discussion. It flows easily.

Jason Cutter [00:00:56]:
Well, I’m glad there was so much in there. If anyone’s finding this episode, make sure to tune into the first part where all of the gems and discussion and the hacks and the one that got away, all the lessons from Gregory’s experience in 30 plus years. And also growing the IBA brokerage to 18 brokers and counting as of fall 2025. When we’re recording this, make sure to check out all of that in there. We’ll have the links and also ways to get a hold of Gregory. So in this part here, this I’m calling the after show, this is, you know, the lights and the cameras are off. Let’s just have a discussion, let’s just see what comes up. I have some questions, some things that I would love to find out, you know, especially because you have a ton of experience leading up to this and I know that you’re always looking further ahead.

Jason Cutter [00:01:45]:
A good CEO is not focused just on this moment, but is focused on the future even more than the present. And so the first question I have is what will brokers need to be doing to survive and hopefully thrive in the year 2030?

Greg [00:02:05]:
I think it’s important to track industry trends and not focus on what has historically worked. A simple analogy that I’ve seen in my life is when I was growing up, everyone loved Dairy Queen Baskin Robbins ice cream. Then it became Tcby frozen yogurt. Then it transitioned back to ice cream and Steve’s ice cream and different products. Then it transitioned to Menchees Yogurt Land, putting toppings on frozen yogurt. And now it seems to be transitioning back to high end ice creams in the Northwest. It’s Molly Moon and salt and straw and products like that. And so don’t just focus on what worked Yesterday constantly be looking for what’s emerging tomorrow.

Greg [00:03:29]:
So you can sell both historical financial performance but appreciation ability in a marketplace. Maybe someone has a great concept or a great product or service that has legs for growth. And you can highlight that as a business broker that I sold a company several years ago that sold backup generators. Generac. Well, with taxing on the power grid and rolling blackouts in parts of the country, that type of appliance is now more prevalent than it was at homes. As an attachment to your house, that was an opportunity that that buyer saw and they continued to grow the company.

Jason Cutter [00:04:31]:
Yep, makes sense. So looking ahead, industry trends. Yeah it’s always you gotta, you, you gotta pay attention to those cycles and what consumers, what, what a business by customers are going to want and where that might evolve. Obviously be careful, you know, not to assume too much but just be aware of those trends and, and seeing what happens. I love it. Now number two, we talk about this, I think this is important, especially right now. Again, if we look at an era when you started 30 plus years ago and the technology that was available in the world of M and A versus now, what do you think the number one tech shift is coming to M and A still or on the precipice or you know, in, in play right now?

Greg [00:05:18]:
Well, I think it’s pretty obvious that it’s AI I and it’s a blessing and a curse as a tool. So IBA is also a commercial real estate firm. So we have the ability to sell a business and the associated real estate when it’s owned by the same ownership in one package. Well, AI is really good for us in that if we need to find the cap rate for industrial property in Hillsborough, Oregon or Everett, Washington, AI will give us that much easier than historical research required because the data is there to produce it. Now on business brokerage, the lack of local public information on sales can be problematic in that for example, some states have a state income tax, even municipal taxes, and some do not. So if you’re looking at a business in the Bay Area, the tax rate is higher, the labor rate is higher, the occupancy cost is higher. If you’re looking at the same business model in Nevada, that is not true. So be careful with AI if you’re pulling data, if it’s conglomerate and pulling data points from areas that are not relevant, it could end up with a bad tasting stew at the end of the day because you’ve added ingredients into the mix that are not appropriate.

Jason Cutter [00:07:31]:
Got it. So always be aware of that. AI obviously like you said, it’s, it’s a great, powerful tool for some things and then it’s not effective in other ways. Funny, funny side note, we’re, we’re the, we’re recording this. This morning I was going through LinkedIn and I saw one of your brokers post something. She was not happy. It was basically a cautionary post about, you know, I think there was a buyer or a buyer’s broker who took the confidential information, dumped it into AI to get questions to ask, and then spit that back out. And, you know, not, not the right thing to do with AI where you’re feeding it confidential information, which I know it’s a big thing for you and the brokers.

Jason Cutter [00:08:17]:
Right. It’s like when to use it and when not to use it.

Greg [00:08:20]:
Well, who do you do business with? People you know, like and trust. If, if you’re engaging with a computer as a seller, as the questioner, are you building rapport that will make you someone that seller knows, likes and trusts as a buyer and wants to do business with?

Jason Cutter [00:08:42]:
Yeah, yeah, it’s true.

Greg [00:08:46]:
Right.

Jason Cutter [00:08:46]:
And so it’s where understanding the, the power and the value and then where the human element comes in, which is important. So next question here. So this is, you know, like I said earlier, it’s fall, it’s October 2025. When recording this, what’s the biggest lesson you’ve learned so far this year?

Greg [00:09:08]:
I don’t know if a unique situation has developed, but it’s an age old situation in that expect the unexpected. As we’re recording right now, we have a government shutdown that impacts SBA loans. It can impact transfer of federal contracts. We have a business we’re selling that has a Navy component. As far as a customer, people may not be working at the same pace or even working at all. I wouldn’t say approving the assignment of a vendor relationship at the Navy is an essential business. So those type of things. We’ve had government shutdowns before in my 31 years and we’ve navigated through them.

Greg [00:10:11]:
But the world is revolving. It’s ever changing. And what worked yesterday may not work today. Or you may need. You’re in Florida. Put plywood on your windows and block out that amazing view. That was the reason you bought the house. It’s not there forever, but probably makes sense to have plywood on the windows right now.

Jason Cutter [00:10:39]:
Yep, yep. I love it. So expect the unexpected. I think, I think that’s important, especially when things seem to be going well, when there’s complacency or Everything’s just running smooth. Then these kind of things like a government shutdown that no one would have forecasted or assumed would actually happen because it’s very rare that it does happen. It’s threatened a lot, but it doesn’t happen. Right. Even this year, 2025 with tariffs being the big conversation and always in flux.

Jason Cutter [00:11:07]:
Right. It’s like expect the unexpected and then adjust and move through it based on everything that’s going on. What are you excited about, let’s say through the rest of this year and or into 2026 in your business with IBA?

Greg [00:11:24]:
It is a wonderful marketplace for business brokerage. Right now we have baby boomers, we call it the silver tsunami, who are retiring and wanting to sell their businesses. So in any transaction you need supply and demand. So we have good supply right now with people selling businesses they’ve never sold before. I mean they may have owned this for 20, 50 years in some cases that are coming to market where maybe it went through two generations. I had a transaction of that nature where the third generation doesn’t want to stay with the company and finally it’s selling. So supply is good. Buyer demand is at the highest level I’ve ever seen in 31 years.

Greg [00:12:24]:
And it’s made up of four components that I’ve identified. So first component, starting at the high end, private equity corporations, family offices, they have trillions of dollars on the sideline that wants deployment for high returns, growth by acquisition. So they are looking for both platforms and bolt on acquisitions. And they are going smaller in transactions than I’ve ever seen where maybe they wanted a $2 million EBITDA company and now maybe they’re buying a $1 million EBITDA company. The next group, unfortunately we touched on AI, some economic turbulence. People are getting laid off in their 50s, 60s who may not have the capital to retire. They have a net worth, they have great experience and knowledge. They may not want to relocate because of kids or spousal employment or family or community attachments.

Greg [00:13:48]:
So they are problem solving through acquisition businesses. You’re 58 years old, you want to work till full Social Security retirement age at 67, you end up buying a business where you can run it for 10 years. And then the beauty of buying a business is you have an exit value. You can’t sell a job so and you have guaranteed employment. So that demographic exists in America where companies tech is big up in the Northwest, are either becoming more efficient with AI or replacing higher paid employees with lower paid employees in a transition. The third group, which is Exciting. And we’ve talked about podcasts like the all in podcast and different things. Younger people are wanting to be founders owners at a high level.

Greg [00:15:00]:
When Jason and I graduated college, you wanted to go work for big corporate America with all the benefits and OPM money to travel. Well, that still exists but a lot of children. My, my 22 year old is an influencer who he aspires to be a founder entrepreneur. He’s working right now and happy and doing well. But will he be in corporate world 15 years from now? I would say it’s a low probability. He’ll probably do five to 10 at least and then he will do his own thing. And I think many people sub 40 don’t aspire to get the gold watch and spend their whole career with one company. And then the last one is also exciting.

Greg [00:15:59]:
My wife’s an immigrant. My family are immigrants. There are a lot of people who want to do entrepreneurship as their path to enter the American economy as immigrants. It’s much harder to get hired by Boeing or Microsoft or Nike or Intel as a immigrant into this country. It’s much easier to start a business or buy a business and enter that way. An interesting buyer I met with left Ukraine. He was in the construction industry and knew he wasn’t going to be building apartments for a few years in Ukraine. And he hasn’t bought a business yet but was looking at our inventory in the construction segment as a vehicle to immigrate to the country and continue to do what he knew and and was good at because it wasn’t a productive time to do that profession in the country.

Greg [00:17:16]:
Ukraine.

Jason Cutter [00:17:17]:
Yeah, makes sense. I, I think that’s when you talk about what’s exciting. Obviously you have an increasing inventory to sell and a very hungry buyer side inventory and population from different angles. It’s definitely, it’s definitely a fascinating, exciting time for the business. Like you said, in 31 years seeing it in this perspective and how it’s changed. Last question for this after show for this, this extra segment. If you could wave a magic wand and have one marketing related thing for the business to be done automatically, what would it be?

Greg [00:18:01]:
Great question. I paused for a second to think but I think it’s an age old problem for salespeople is you can only meet or talk to one person at a time and constant frustration in hours of the day. If you want to provide high level customer service and engage with people, that 10 minute phone call ends up being a half hour and you repeat that. If you had a magic wand for all of us Jason, is there a way that, like, you can listen to a podcast at 1.2 or 1.5 speed? Can you work through your day at that type of work?

Jason Cutter [00:18:55]:
It’s tough because you can’t accelerate those phone calls in that way. I do have some friends where we send voice notes, especially through things like WhatsApp. And WhatsApp allows you to listen to voice notes back and forth at 2x speed. And so that’s how I optimize that stuff. But if it’s relational things, if it’s talking, if it’s things like this, you know that, that part that I know of, wouldn’t want technology or AI to mess with that too much. But I’ll see, I’ll see what I can do.

Greg [00:19:25]:
Yeah, Again, that’s how many of us have the day get away from us. I mean, you start with a to do list and it’s four o’ clock and you’re looking at your to do list and say, what have I done today?

Jason Cutter [00:19:40]:
Yeah, what have I done? I didn’t get anything done. What did I actually do? That is definitely a conversation and topic for another podcast and another training and a whole nother session about time management and things like that and task management. But it’s interesting too, with what you’re saying is having one conversation at a time is you and I, I know both feel the same way, which. It’s all about the human to human, it’s all about relationships, it’s all about the conversations, it’s all about the other person. And so really the question is, how do you get everything else done for you or quicker so that you can just focus on humans? Right. As a human, when, when everyone’s worried about AI taking jobs, AI is going to take tasks, but you know, what’s going to be left is humans interacting with humans well.

Greg [00:20:30]:
And I think that protects sales because, yeah, you, you need dynamic engagement. Who is ever going to read all the attributes of a product when an alternative is the ability task? What’s important to you with it? If we buy a new Dyson vacuum cleaner simple product, we are not worried about everything in that manual. We want to know how to do the elements that we need and we’ll learn the rest. And if we have an issue, we will, how does this attachment work or whatever it is? We will pull out the menu at that point. But it’s, it’s overwhelming. And everyone still loves a mentor or a professional salesman to be the help desk and to answer the questions in real time and maybe explain something multiple times. But using different verbiage because different verbiage resonates with different people.

Jason Cutter [00:21:58]:
Yep.

Greg [00:21:59]:
So true.

Jason Cutter [00:21:59]:
I mean that’s why, you know, especially in the industry here and AI is not going to replace business brokers anytime soon. Just can’t like going back to what we started talking about in the beginning of the first episode. There’s just too much, it’s too complicated. Every business and every location is dynamically different than everything else. And so that just leaves the humans, the guides, the, the mentor, the sales professional, the one to want to be the expert and hopefully be the one that helps that transaction complete. So Gregory, thank you for this bonus, for this after show, for being the first guest on the Business Broker Growth show, for being here Again, thank you for all this extra, extra info that you shared with the audience and your time. I appreciate you being on this, on this adventure with me, Gregory.

Greg [00:22:47]:
My pleasure.

Jason Cutter [00:22:50]:
And for everyone tuning in, make sure to check out the show notes, make sure to subscribe wherever you found this. Like it, share, share it. Let’s help the business broker community as a whole improve so that the final output is better. Which is business owners can exit successfully and safely and know that they’ve got a good guide shepherding them through that process and not a used car salesperson who’s just going to throw stuff at the wall hoping for, you know, big payday. So please make sure to subscribe the show. Thank you for being here. Hopefully you’ve enjoyed this. Hopefully you’ve taken some notes if you didn’t make sure to check out episode one, the first part of this because it’s of the after show.

Jason Cutter [00:23:27]:
And until next time, stop hoping for deals and start growing your pipeline.