Intro: Broadcasting live from the Business RadioX Studios in Atlanta, Georgia. It’s time for High Velocity Radio.

Lee Kantor: Lee Kantor here. Another episode of High Velocity Radio and this is going to be a good one. Today on the show, we have the president and CEO with the Pacific Northwest premier Business Brokerage Firm since 1975, International Business Associates, we have Gregory Kovsky. Welcome.

Gregory Kovsky: Thank you. It’s an honor to be here.

Lee Kantor: Well, I’m excited to learn about your practice. Tell us about IBA. How are you serving folks?

Gregory Kovsky: Certainly, as you mentioned, IBA is the oldest and largest business brokerage firm in the Pacific Northwest. We’ve been in business since 1975, ten offices throughout Oregon and Washington. We serve the seller side of transactions and try to facilitate sales of privately held companies, family owned businesses with knowledge, experience, skill, best practices and integrity.

Lee Kantor: So what’s your backstory? How’d you get involved in this line of work?

Gregory Kovsky: Great question. So my family was a customer of IBA before I joined the firm. My father was a veterinarian in Portland, Oregon, and in the 1980s, he decided he didn’t want to be a practicing veterinarian anymore. He wanted more control of his life. He was frustrated. If he needed to do an emergency caesarean section, delivering puppies, which is a real thing, or a dog gets hit by a car and it would disrupt his life. So he hired IBA to sell his veterinary hospital in real estate. He was impressed with them in the sale, went on and worked for Hill’s pet products science, diet. Dog food. Teaching pet nutrition before it was a thing nationwide. So he still was a veterinarian, but not having his life influenced by the unforeseen occurring. And I left the northwest, went to the University of Texas down in Austin, studied investment finance and accounting, pursued my first career, and it took me to Kansas City. And I was sitting in Kansas City and had an epiphany moment where I missed the mountains and oceans of the Pacific Northwest and decided I didn’t want to build my life in the Midwest and so returned to the northwest. Didn’t know what I wanted to do as the next chapter. And my father said, I think you’d be good at selling businesses.

Gregory Kovsky: You’re a salesman by personality. You’ve got the accounting and finance background academically. Let me introduce you to the founder of the firm, Bill Osofsky. So I met with him. It intrigued me. I joined had very strong success in two industries that do not even exist today. When you talk about the speed of entrepreneurship, one beating travel agencies, before Expedia, they used to be big chains and the other ISPs, the old dial up internet service providers. And they used to be five 10,000 user networks where today it’s your cell phone company or Comcast or limited providers. And that was a classic big fish eating small fish marketplace. And in 2000, the founder came to me said, I want to retire and I’d like to sell you the company. I was already managing the Bellevue office for IBA, which is our Washington State head of the pyramid. And I was a bit of a logical choice. We had an old guard of brokers, many approaching retirement, some with kids in college, and he didn’t want to disrupt the team he had built and they had mentored me. They liked me. I was endorsed internally, took over the helm in And 26 years later, I’m still running the show.

Lee Kantor: So now what is kind of a day in the life look like for you?

Gregory Kovsky: Well, as the executive head of IBA, about 70% of my time is spent executive management, financial management, marketing management, online technology oversight, um, and then sales management and my 20 M&A intermediaries spread throughout the region doing transactions. And then I still like to lace up the boots and get on the pitch. And so about 30% of my time is still doing transactions. I’ve personally done over 300 transactions, including 2 in 2026.

Lee Kantor: So do you specialize in any industry or is this kind of industry agnostic? Your work.

Gregory Kovsky: Ida, actually serves 20 different industry sectors. We are well known in construction, manufacturing, technology. Education, hospitality, a broad spectrum of industries. Personally, I like the old economy. I do a fair amount of industrial manufacturing type companies myself. That’s that’s my favorite pond to swim in.

Lee Kantor: Now, when you’re selling your business or most of the business you sell, do they have kind of like a real estate component or an equipment component? Or can they be like service industry where it’s more kind of along the lines of your father with, you know, there may not be a lot of stuff, but there’s a lot of happy clients.

Gregory Kovsky: Excellent question. So every one of my brokers is licensed to sell real estate in one or more states. So we are a little bit unique as a mergers and acquisition firm in that we do have the ability to sell both the business and real estate asset classes in one representation package. I would say about 25% of our deals will have real estate involved, but the remainder will generally have leases. And in Washington and Oregon, you need to have a real estate license to negotiate or assign facility leases. So it’s it’s one of the many domains we bring expertise in. Um, we do sell virtual companies, SaaS platforms, education platforms. One of the education platforms we sold was actually based in New York and was an equivalent to Khan Academy, providing education for school districts to supplement what was occurring in the classroom. And they hired us because we’re at the 50 yard line in terms of technology. Being in Seattle with Microsoft and Amazon in Portland with Intel. So we know the technology space very well and have the ability to properly value create a marketplace and sell technology and other service type businesses that don’t have the substantial assets, though. You know, on the other side, we just sold an aerospace manufacturing company that had the Navy and had Boeing as customers. And in that case, the equipment infrastructure was quite large.

Lee Kantor: So what, um, when you’re dealing with a business owner, I’m sure that some of it, if not a lot of it is kind of emotional. They might have an idea of the value of their business based on look, I’ve lived it for 30 years. Um, how do you have that valuation conversation with them? Because I would imagine a lot of the times you’re going to give them a number that is not the number they have in their head.

Gregory Kovsky: 100% true. So we are very good at valuation. We generally sell our companies for within 10% of where we went to market. And it can be plus or minus minus because we will try for the high end of the range for our clients. Plus, because we often create competitive market dynamics, which will take the price higher based on supply and demand issues. We work on a business model that’s 100% paid on performance at IBA. So no matter if a business sells for six, 7 or 8 figures, we don’t charge our clients a penny until they get paid and the transaction closes. So we have a vested interest in being honest with them because we do this full time for a living. We’ve sold as a firm over 4400 companies. We get paid on performance, so we have an incentive to get the maximum value possible. But we actually reject two out of three companies that come to us because if they’re not realistic on value, we will work on other projects. I would rather go with my wife and two dogs on a walk, rather than work on a project that doesn’t sell. But to finish on your question, which was a very good one, part of our education is who we need to sell the price to. We start selling it to the buyer.

Gregory Kovsky: They are actually the easiest. They’ve got emotion. They’re mentally engaged. Then they hand off the package to their CPA or CFO. That individual is not emotional, but we need to get a thumbs up from them that they endorse the purchase for their client. Then it gets handed off to the attorney, and the attorney is not as focused on dollars as in liability mitigation. So we gotta convince the buyer of the business and their legal counsel that the risk is acceptable for the price. If we’re selling a manufacturer of pacemakers, that’s a high risk liability. If they have product defects, people die. So that’s a big legal issue. If we’re selling a chain of eight Arby’s, which I have done, what is the real damage risk? A bad sandwich, they come back and you give them another sandwich. So liability issues in fast food are not nearly the same. So we got to sell it to the attorneys. And then finally there’s an old saying. He who has the gold makes the rules. We’ve got to sell it to the bank or investors. And they’re looking at their return on investment and the safety of their investment. So it’s a multiple step sale process. And personally, I’m never going to start a process. I don’t think I can win.

Lee Kantor: So now what percentage of businesses and business owners actually exit with a sale? Is it is it 100 for 100 or is it a much lower number?

Gregory Kovsky: Well, for us it’s usually 80 to 90% of our engagements end in a sale. Nationally, it’s only 15 one 5% of businesses that sell. And let me talk about both of those briefly. So why are businesses not selling nationally? First thing is they’re failing business models. People have put their life savings into starting up a business. They never get to critical velocity and they’re trying to find a successor. But if it’s failing, there’s not a lot of buyers. Secondly is they are unrealistic on value. It can’t get financed by saying SBA loan. Third, there are so many moving pieces in a sale. They don’t know what they’re doing. Be it a business broker who’s out of their industry expertise, size, expertise, element in terms of knowledge and experience and skill. Who may give the college try but isn’t able to end in victory. On the IBA side, why we fail is usually one of three elements. Either our client or the buyer are not negotiating in good faith, and we deliver five offers to our client, and they always find something wrong with the potential buyer, or a buyer gets inside the business and determines something that we didn’t know about it. The seller hasn’t disclosed a material fact that should have been known, and the deal fails, or attorneys end up creating confrontation and selling fear and cooler heads don’t prevail. By the entrepreneurs to get the deal done so those can kill transactions as well as something changes in the business model. And let’s say they had a big customer who was 30% of their sales and they lose that customer. Well, now that business is a lot less attractive on the market.

Lee Kantor: Now when a sale occurs, is it typically okay, here’s a check for the amount we discussed or is this something that’s um, I’m going to pay you over time?

Gregory Kovsky: Great question. So there are multiple components that can go in business sales every seller always wants as much cash as they can in a transaction. And we frequently get to all cash transactions. I one of the transactions, I closed a industrial distribution company that closed March 31st was an all cash transaction. So those do occur. But you have to ask, why do buyers want seller financing or an escrow holdback. And usually it gets back to this issue of liability. So if something comes out of the woodwork that wasn’t disclosed in the seller’s disappeared to the Cook Islands and is unavailable to respond. If you had a seller note or you had an escrow holdback if there is Manufacture defects, warranty issues, and an Hvac company where you need to go back and do repairs on installations. The seller was paid for, but the buyer needs to maintain the reputation of the company and wants to satisfy that customer and not have negative Google reviews and other detrimental things to the business they just bought. If the seller doesn’t own what is reasonable from their time at the helm on the ship, it is a logical approach to have the seller have a vested interest in a smooth transition and tying off loose ends, that they’re not going to compete with them post-sale. That if they say they’re going to work six months on a transition of ownership, that they’re not gone three days after the sale fishing and not supportive. So that is often why you have an escrow holdback or a promissory note. You also can have a variable piece where it’s called an earnout or retained equity, where maybe there’s customer concentration, as I mentioned before.

Gregory Kovsky: And the seller says, we’ve been doing business with this customer for 20 years. Yes, they’re 30% of our sales, but they need us. They’re not going anywhere else. And the buyer says, I believe you. So you reach an agreement where based on that retention of that customer, there’s a variable piece of the sale that will be paid after a year or two based on their retention. Or maybe a business is growing on a hockey stick, or is just had an off year and we need to normalize revenue because the buyer really cares about what it does after the sale, not what it did before the sale. And so you may put a plug number in saying, as long as this business does 7 million in revenue, we’re all good on the price. But if it does 8 million, I will pay you more. And if it does 6 million, there will be a discount that occurs in a variable piece. Can account for that. Finally, sometimes we’re building collaborative projects where a private equity firm will buy a company. The seller will retain an equity position, maybe even stay on as the president and CEO and knows that another transaction will occur 3 to 7 years on the horizon. And the second bite of the apple can be greater than the first, because maybe we sold it with a four multiple and because it now sells as a bigger entity with stronger EBITDA. It sells at a six multiple. So they grow with the company and get a second paycheck.

Lee Kantor: Now, is there any advice you could give? Say somebody who owns a service business, what should they be doing in order to exit? Um, effectively? And how soon should they be planning for their exit? And I know a lot of people say you should be planning right when you started, but if they’re in their situation right now, what is kind of a window to prepare and what are some of those kind of things they should be doing today to get the best exit for themselves in a few years?

Gregory Kovsky: We are coming up on Tax Day, April 15th, and the single most important document in a business sale is the tax return. So you want to have a transparent tax return for the year prior to your sale. So stop running personal expenses through that. Um, do what’s necessary to detail out the car. So its performance is at its highest level. The year after that tax return when you sell. So the first thing is just get your financial house in order. And now is actually a good time to do that because you have runway on 2026. The next thing is work on your business, not in your business. The more layered management you have, the better. If you can go on vacation in, the business will continue to run well. If you can lose one of your engineers or a key salesman in the business continues on without issue. Those add value. And I always say treat it also like you’re running the last two miles of a marathon kick. Make it perform as high as you can because growth will increase your value and make the business look more attractive on the market. Decline will hurt you in valuation because buyers often play Chicken Little, and if you’re down 5% this year, they’ll extrapolate out is it going to be 10% next year where if you’re growing 5%, they may not believe it can do more than 5%, but you have documented proof that even in present economic conditions, the business is thriving.

Lee Kantor: Now, when, um, you’re working with some the wide variety of people you’ve worked with in the past, is there a story you can share about a successful sale that may be exceeded the expectations of the person who sold and maybe was rewarding for you in your career?

Gregory Kovsky: Certainly I’ve had numerous sales. As I said, I’ve done over 300. And to me, honestly, the most basic joy I get in my team gets on every sale is that you are helping people monetize their efforts that resulted in them living the American Dream and creating something, building something, and then being able to exit. You can’t sell a job. You can sell a business. Um, one of the recent sales I did that closed in January, which was very rewarding for me was a company that fabricated countertops. They fabricated them out of granite, quartz, other products, marble. And they had started as two brothers in essentially a garage installing countertops for other people. Then they started their own shop in the back of another business, um, with a rail saw, um, fabricating their own and grew to a company that was doing approximately eight figures in revenue with automated state of the art equipment. Um, an installation team that was second to none. A beautiful showroom. And they had lived the American dream as first generation immigrants who came here with nothing and through hard work, through pursuit of excellence, Achieved a level of success that, frankly, is not available in many other countries in the world.

Lee Kantor: Yeah, that must have been pretty rewarding. Um, when that closed.

Gregory Kovsky: It was I mean, it was just wonderful people. I make many friends through transactions. I love their stories, the ingenuity of different business owners. Another very memorable, rewarding story which resulted in a friendship was a lady named Anne Bailey, who. Was an environmental chemistry professor who decided she wanted to be entrepreneurial and. So she created a company that audited environmental chemistry data. So organizations like NOAA, before they would publish a study, would hand over the data almost like a to a CPA to verify the data. This is a service company, like you talked about, with just some computers and desks and a team of scientists who would review the data and then endorse it before it was published. And interestingly, in that industry, there were firms like this that represented the corporate side and ones that represented more government pseudo government. And this is a few years back, but I was talking to her at length about The, um, the deep horizon spill in the Gulf of Mexico and how she would do studies on the impact of that spill on fish, shrimp, birds, the environment and how the oil companies would publish their own reports saying this is an organic material with limited negative impact. So it was an interesting service company, and it was a wonderful situation of someone taking their unique knowledge, experience and skill and creating a private sector opportunity that was highly valued.

Lee Kantor: Are there certain industries right now or niches that are are like hot, or is there a trendy kind of, um, opportunity now for an entrepreneur out there. I know that periodically, um, some private equity firms start rolling up, like you mentioned, some smaller entities. Is there something like that going on that, um, our listeners might be able to take advantage of and maybe consider selling, you know, now because you’re, you’re kind of hitting while the iron’s hot.

Gregory Kovsky: Well, first I’ll start by saying this is perhaps the most robust buyer market that I’ve seen in 32 years. There is a deep, deep pond of buyers for sellers to engage with, ranging from private equity to people being laid off in the tech industry who are problem solving through that experience, by acquiring businesses. So I think one of the big opportunities that exist right now is to take businesses and apply benefits of AI and technology to take them to the next level. Um, people look at the layoff of computer programmers and it, it’s horrible. If you were at a tech company and got laid off. But on the other side, I think kind of like website developers, those computer programmers are now going to be available using AI tools to smaller and smaller businesses who then can create custom solutions to take advantage of where the economy is going. And I’ll give you an example. I listened recently to a speech by one of the founders of Service Titan. And Service Titan is the dominant project management software in the service trade. So plumbing, electrical, Hvac, and he was talking about how they are bringing AI tools to their customers. So if you’re replacing a furnace in a development that was built 20 years ago, now you have the ability to market to all of those people in that neighborhood who may be coming up with furnace replacements. And then with AI, look at what other developments were done by that builder in the same era in your service area, knowing that the lifespan of the furnaces they put in, which are builder grade. We also see it with roofing, have a shorter lifespan than the reroof someone would put on themselves because they don’t want to have to replace it in 1015 years.

Lee Kantor: Man, it’s, uh, it’s a lot of times when you have kind of this kind of economic chaos, it really does open up opportunities for people. Um, it doesn’t have to be like a woe is me situation. It could be a great opportunity for folks who want to go that entrepreneurial path.

Gregory Kovsky: Now, 100%. And I also say watch trends. I actually watch my kids to understand younger trends. And one that I observed is when they were very young, ice cream was popular as a frozen dessert. Then we went through a stage where they loved the frozen yogurt with toppings the mint cheese, yogurt, land chains, and they had no interest in, like, the Baskin-Robbins offering. Then it has cycled back, at least in the northwest, to more premium ice cream brands like Salt and Straw and Molly Moon’s and those type of products in this region and where the herd goes. Come the entrepreneurial opportunity. One thing we’re seeing right now is a proliferation of chicken places, be it Raising Cane’s or Dave’s hot chicken. And kind of a gravitation away from burgers, partly because it is more expensive right now is a product. Well, I don’t think it takes a rocket scientist to guess that the Empire will strike back in, you know, in 2030. It won’t be chicken sandwiches. It’ll be burgers again.

Lee Kantor: Yeah. Um, history doesn’t repeat, but it rhymes.

Gregory Kovsky: Yeah, exactly. So I, I love those type of trends. And if you’re an early adopter of those trends, you can do very well as an entrepreneur. Just be buying as observant. As I said, my kids are now 20 and 23, but I use them as my test. Where did they want to eat? What products were they buying? You know, no, none of their peers have any other, um, phone than an apple. I makes me recognize that. You know, when I look at AI and I tend to think about things. The secret of AI may very well be who people are engaging with as a platform from their Apple devices. It may not be the best product. It may be the gateway to AI.

Lee Kantor: So, Gregory, if somebody wants to learn more and connect with you or somebody on the team, what’s the website? What’s the best way to connect?

Gregory Kovsky: Thank you. Um, best way to reach me is through our website, which is i b a i n c.com. So IBA INC icecream boy apple ice cream nancy charlie.com. Um, you can call me at our corporate headquarters at (425) 454-3052. And we’re advocates and resources for entrepreneurs. I would encourage people to look at our blog. It’s published twice a week and has had over 200 authors covering a variety of subjects. This week, one of the articles published was by one of my brokers, who specializes in the sale of hair salons, spas, nail studios, etc. so there’s a lot of information there about buying and selling businesses and specific industries.

Lee Kantor: Well, thank you so much for sharing your story today. You’re doing such important work and we appreciate you.

Gregory Kovsky: Thank you very much. It’s been an honor and a pleasure.

Lee Kantor: All right. This is Lee Kantor. We’ll see you all next time on High Velocity Radio.