Cobroking in Business Brokerage: Why It Matters?

Cobroking in Business Brokerage: Why It Matters?

Business brokers are transactional advisors - as such it is our mission to educate the small business community on how to sell a business. On the surface, cobroking may not seem like a big deal, but let me give you a little backstory. First a simple explanation of cobroking is when two business brokers collaborate on a transaction across brokerage offices, one broker representing the seller and one broker representing the buyer.


Currently, only 20% of small businesses are sold, leaving many hard-working business owners to close their doors. That’s only 122,299 of the 611,495 small business in Colorado. Now add to this equation the fact that 48.6% of employed Coloradans work at small businesses. Are you beginning to understand where I’m heading with this? If 80% of small businesses close down, than that is quite a few people needlessly out of a job.


At the end of the day, Transworld loves small business and we’re proactively using our chosen profession to advocate for the small business owner and get that 20% up to 40%, maybe even 50%. That would make quite a large difference in the community, on employees, and on the economy at large.


This discussion brings us to the main point of our article and that is why cobroking in business brokerage matters. This topic is best described by an example. Imagine you have listed your business for sale with Brokerage Firm A, and Brokerage Firm B reaches out to your broker and says, “Hey, I have a great, qualified buyer interested in your business for sale!” Your broker responds curtly with, “I don’t cobroke deals.” And then your broker goes about the rest of their day, likely not even mentioning the potential buyer to you.


By choosing not to cobroke, your broker has eliminated a potential deal and left your money on the table. Does this not sound like a disservice to you, their client? Unfortunately, this situation is not uncommon in the business brokerage industry. It is simply put unprofessional not to cobroke, because it does not serve the needs of the client and it especially does not serve the economic health of the larger community either.


To recap small business is the heart of the American economy, and a quality business broker’s role is to support the small business community by connecting sellers of a business to buyers and perpetuating the legacy of said business, even if that means sharing a commission with another broker to complete the deal. Simply said, we want to serve our clients as best we can, and cobroking is a huge part of this commitment!


So the moral of the story is, if you are in the market for a business broker, ask them this,”Do you cobroke?” If the answer is no, we highly suggest you keep looking, because ultimately, it’s your money that’s going to be left on the table.


For more information on how Transworld - Rocky Mountain can support you with the business sale process, please visit our website or schedule a free consultation with one of our brokers today!


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Rachael Holstein joined the Transworld Team in 2016 as Marketing Coordinator. Her working experience has been largely focused on Business Development and Marketing in the finance, architecture, property management, and information technology industries. A long time resident of Cleveland, Ohio, she attained her Undergrad from John Carroll University and a Master’s Degree in Global Interactions from Cleveland State University. She relocated to Denver in 2013 for a change of scenery and a bit of adventure.


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