Broker Interview: Tom Howard

The Deal Closers Podcast - A podcast by Website Closers

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We hear a lot from our broker experts, Jason and Ron, on the show. Each week, they come in and drop nuggets of wisdom about the ins and outs of the industry.


But in this business, there are a lot of companies to sell and a lot of obstacles that can come up. With so much going on, there are plenty of professional brokers out there.


On today’s episode of Deal Closers - A Tech & Internet M&A Discussion, we’re bringing in a different voice, Tom Howard, another broker from WebsiteClosers.com. Over the last 20 years, he has built, launched, and sold new small businesses mostly around financial services and technology.


[01:35] What do you find unique about the tech side of the industry?

  • One of the unique things is the pace of deals. In tech and in the online world in general, things just move really quickly;
  • In the tech space, the sellers and buyers are all over the world, and it makes no difference where our company is located, for the most part, in this virtual space.


[08:43] Looking at the industry when you first started out in your career, Tom, what did it look like then, compared to now?

  • When I started out, the owners that were coming in, they had started businesses maybe as a side gig or just to generate some extra cash flow and in a lot of cases, the businesses had grown and outdone their expectations. Most of those early businesses were driven more by AdWords or organic SEO traffic, and Amazon was a channel but not necessarily a primary channel;
  • Watching how things have changed on Amazon, is unbelievable. Even though for some reason people see Amazon as being a big risk, from the standpoint of a retailer, they’re a much more comfortable place to be because you know what you’re going to get with them;
  • About 75% of all search for consumer goods now starts with Amazon, rather than Google, and over 50% of all e-commerce sales happen at Amazon now.


[13:00] What about some of the things that might have stayed the same?

  • Something that stays the same, and always will, is the fundamentals of business – proprietary value, clean financials, growth, product differentiation, lack of concentration. The overall risk profile that you put on a company is relatively the same;
  • Buyers are still investors and they’re looking for a rate of return on their investment;
  • Good businesses trade and weak businesses have far less value, if any.


[16:48] What have you found helpful for buyers and sellers to find success in the deal process?

  • From a buyer’s perspective, it’s critical to know what you are looking for before you start shopping, so I encourage buyers to define, in as specific terms as possible, exactly what they’re looking for so that they’ll recognize it when they see it, because if they don’t recognize it, it’ll be gone if it’s a good business;
  • As a buyer, particularly if it’s your first venture into tech, it’s very important to look closely at the seller and make sure that this is somebody that you can work with, that’s committed to your success, that’s going to help you have a seamless transition;
  • For sellers, it’s important to be transparent – no business is perfect, so just get it out on the table and try not to persuade or sell your business. The objective, really, is to find the perfect match between the buyer and the business, so what we’re really trying to do is to make sure we understand what’s important to the buyer and we let that buyer determine whether this particular business is a good fit;
  • When it comes to a good broker, he knows which businesses are good, bad or decent, but he also knows the best businesses. So, when you’re working with a good broker, you want to stay with that broker and have direct contact on a regular basis, so that when he gets a good deal, he’ll come to you to take a closer look. So, the object of being loyal to an accomplished, knowledgeable, successful broker is extremely important.


[25:47] What is something a buyer can do to get your attention, that you’re going to think to yourself, “This is somebody who is serious and I want to spend some time to build a relationship with them”?

  • The best buyers that I work with may send proof of funds, a resume, they’ll send a LinkedIn profile and a list of their target criteria. When you get an email like that, on an inquiry, that’s the first phone call that you’re going to make;
  • Give us some actual information about you in the email, don’t just send over some random question, because this shows your unprofessionalism and your lack of ability to actually get the deal done. If you want to be interesting, you have to make yourself look interesting – it’s no different than if you were interviewing for a job;
  • Don’t lead with an offer of any kind, even if it’s a good offer. Nobody buys a business sight unseen so if you’ve only seen the marketing and you haven’t asked any questions, you haven’t seen detailed financials, you really just have a general idea of what the business is about, don’t make an offer – ask for an appointment, ask good questions and learn about the business, because your offer is not going to be taken seriously if you’ve never spoken with the seller or even the broker;
  • You have to be smart and you have to know what you’re looking for. Include something in your inquiry to let us know that you’re a serious buyer and you have questions and you’d like to talk – that’s the first way to get in the game and get moving forward.  


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