Why Do business brokers hate each other?
No, Really. It’s true.
THE GREAT DIVIDE THAT'S NOT SO GREAT FOR BUSINESS
Sit two commercial real estate brokers at a table and neither can shut up about doing deals together or swapping tales of triumph in the field. Sit two business brokers down at a neighboring table and inevitably they both think the other is incompent before either opens their mouth. Why is that?
Why do business brokers hate each other?
It’s all about the money. While it’s customary in residential or commercial real estate to split commissions, the word “cobroke” is contentious in business brokerage. But why?! There are many arguments: the other broker doesn’t know what she’s doing, I’ll be stuck doing all the work, confidentiality will be broken because he’s a ding-dong who can’t keep his mouth shut, and the famous, “I’ve incurred so much cost listing the business, that the numbers don’t make sense to split the fee”. Secretly, I think all of these are baloney.
Let's repeat that again: it's all about the money.
Let’s use an old-school example we can all relate to. If someone asked you to complete a challenge with a classmate to get a pile of candy in return, would you share it with your partner? If sharing was the norm, yes of course! You’d be happy to. What if the concept of sharing wasn’t a given? What if the concept of sharing was solely at the discretion of the one holding the candy? What would you do then? I’m guessing a good number of you wouldn’t share, or if you did you’d skew the division of booty in your favor and feel totally justified in doing so.
Business brokerage isn’t too far away from these playground shenanigans. It’s a largely unregulated and fragmented industry so the spirit of cooperation is low. And yes, a bit juvenile.
Inevitably this behavior raises questions about the effects this has on those looking to buy or sell a business. Who wins when the people tasked to represent you are fixated on making their pile bigger? The cost to you: missed opportunities and a nagging WTF feeling.
