Main Street News April 2013

Early Bird Registration ends April 25!

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George Lanza, CBI, M&AMI, CSBA, MEA

Chairman’s Message

What Does the CBI Designation Mean?

Using any credentials that you have not earned for any reason is against the law! Credentials that are used for the purpose to mislead or defraud the consumer into believing that you possess such qualifications that you have not kept up with could be extremely devastating to you and your business, not to mention the civil and/or criminal penalties you could incur.

What do CPA, CFA, ASA, or M&AMI mean? What do they all have in common? To me, these credentials let me know that the professional I am working with is qualified to provide the services that they offer. The common factor is the trust that I have in them to give me the right answers and get the job done accurately.

For me, as a consumer, I have a CPA file my tax returns. Why a CPA and not just someone that knows how to file tax returns? The difference is that a CPA has 150 hours of accounting and tax law training. I trust him and expect him to get me the best taxation results and to do the work according to the best legal practices. What if I am not satisfied with the results, or find out that I should have gotten a larger refund? What if I have to pay penalties because he didn’t know the latest practices? What would I do if I found out that he did not keep up with the CPE credits and has lost his CPA credentials but that he was still using them?

As you all know, the Certified Business Intermediary (CBI) is a prestigious designation exclusive to the IBBA. It identifies us as experienced and dedicated business brokers. It is awarded to those professionals who have proven professional excellence through education as well as an exemplary commitment within our industry.

Each of us who hold the CBI designation have spent much time, effort and resources to gain these credentials. The rewards are bountiful and indicate to potential clients that anyone who holds the CBI is a knowledgeable, invested, and dedicated broker professional. It also provides comfort to our clients, as they trust us with one of the most important transactions of their lives (haven’t you heard customers refer to their business as their “baby”?)

As with any of the credentials listed above, using them without earning them is fraudulent! If you want the credentials make the effort to earn them—it is well worth your time! Do not let your client find out that you legally do not have the credentials you are claiming to have!

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Karl Kirsch, CAE

Executive Director’s Message

The More You Know

The IBBA has been involved for many years in trying to get an amended ruling and procedure from the SEC on the issue of security licensure requirements for the business brokerage and intermediary profession. We continue to address the issue, as your industry representative, until a regulatory ruling is issued or laws are changed. We see it as part of our core mission to keep important issues like this in front of the membership, as well as represent your interests in lobbying for amendments where the ends are both justifiable and beneficial to our members.

Over the years the SEC, through issuance of no-action letters, has led our community to think more one way than the other. As part of our commitment to resolving the issue, a group of volunteers on the Strategic Initiatives Task Force (SITF) regularly engage the SEC directly. They also are currently working with members of congress to support legislation that may serve to bring clarity and change. The task force’s work here is not done, and while progress is being made, we cannot say what will happen or when.

Also as a part of our commitment to resolving this issue, we try to keep the membership aware of the issues through information and education. As part of our work, we hosted a webinar this month and will have a course related to securities licensure at the spring conference.

Is the issue controversial? Yes, because it has potential to affect our members’ bottom lines. Did the webinar present facts? Yes, and the purpose of the webinar was to present what we understand are the current facts and the law. The webinar was not a statement on how you should conduct your business, whether you need to be securities licensed, or if you are operating legally.

The vast majority of IBBA members approach every transaction as an asset deal, and without further evidence to the contrary, probably do not require any securities licensing or documentation process if the transaction does ultimately contain securities. Any transaction may eventually have a component that involves a security based upon what is agreed to in an LOI. From this, members will have to make a decision, on a transaction-bytransaction basis, regarding the requirements and risk of any actions in regard to fees collected on a closed transaction.

The mission of the IBBA in this case is not to tell members what to do. The mission of the IBBA is to keep the members informed until definitive answers are available. We promise to continue to do so and also meet our obligations of communications and representation to affect a proper and reasonable means for you to provide professional services. I thank the members who weighed in on the issue and invite the non-members who commented to join the IBBA and to help resolve this once and for all.

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Kevin Dempsey, CBI, CMC, CMEA

M&A Source Chairman’s Message

Keynote Speaker Announced for the M&A Source Spring Conference

We are really excited to announce that one of the United States’ foremost economists, W. Michael Cox, PhD, will deliver the keynote address at the M&A Source 2013 Spring Conference and Middle Market Expo, June 10-13, 2013, at the Hilton Anaheim.

Cox will address how to make money in a bad economy by taking advantage of the historic transformation in national policy and economic performance. He also will discuss means to avoid the rising tax burden and how to outperform traditional investments with a wide array of alternatives.

We are honored to have Dr. Cox address the M&A Source Conference. He is a distinguished economist who understands why our clients, middle market business owners, represent American capitalism at its best. I remember hearing him as a keynote at our conference in Memphis in 2007. M&A Source members were truly uplifted by his optimistic belief in free markets and entrepreneurship.

Dr. Cox currently serves as director of the O’Neil Center for Global Markets and Freedom at Southern Methodist University’s Cox School of Business. The focus of the O’Neil Center is the study of the impact of competitive market forces on freedom and prosperity in the global economy.

Registration is open for the conference right now, and early bird registration ends April 25.

Hope to see you there!

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Steve Wain, CBI, M&AMI

Technology Committee’s Update

I have been a member of the IBBA for about eight years. Relatively short when compared to some of the great people I’ve come into contact with. It seems like a long time, but what has not changed for me has been the continued drive by many dedicated people to reach some of our ultimate objectives.

As a professional association, I’ve always remained impressed by the dedication of both the IBBA and the M&A Source to drive professionalism to its members by providing superior education and networking. Continuous education is a requirement for all professionals, but many professions just provide it in a cursory form so their professionals can say they are qualified. True to both associations, we have enforced the highest standards that business owners, buyers, Private Equity Groups, and other professionals can desire. In some cases, people are starting to question the alphabet soup beyond some professional’s names. Read this article from CBS MarketWatch to gain some insight.

Funny enough, all the requirements that the author claims are needed to truly show professional qualification, any CBI or M&AMI already has! We enforce the highest ethical and professional standards of our members, which is why membership and continued education with both associations is crucial to our long term objectives. We’ve now made, and continue to make, some course corrections to get a better footing on achieving our objectives. The principal objectives of our association are to service you as a member in good standing who wants to do a better job in their chosen profession, and have people want you or your firm to represent them.

As such, our objectives need to focus on delivering value and awareness to each member. The education that we offer is unparalleled in the industry. Not only does it provide a means to gaining a true understanding of what we do, but it has a certification track that can help any dedicated member continue to deliver quality and professional services. It provides a path to growth, by offering more advanced courses so YOU can choose the level of clients you service. It allows you, as an IBBA member, to grow into the M&A Source for more advanced education. It allows you to continue growing after certification with an ever expanding library of courses, including five new courses!

The educational component of our association is critical to our success (as the article mentioned above shows) and our ability to continue validating our true professionalism and dedication to excellence. The ability to produce these courses takes an enormous effort. It requires work by our Educational Committee and the professionals who volunteer their time to write the courses, get them reviewed, and starting now, get them not only taught at conferences, but for some courses, become converted to online e-learning courses.

The other part of our objectives is awareness. Our work towards that has increased dramatically, thanks to the focused work of many but in particular the IBBA’s Marketing Committee. They’ve been working hard to get the IBBA’s name known, and more importantly, validate to the outside world of business owners and buyers, that using a credentialed and/or IBBA educated professional is the only way to be represented. As an example, through work such as the Market Pulse Survey, the results of our endeavors are being noticed, and focus on our members is coming via major publications and over the internet news sites.

Becoming aware of who we are and what we do is a joint responsibility. Both the IBBA and each member needs to continue to expose not only what our industry does, but that they are a professional in good standing that knows how to represent them in the sale or purchase of a business. How are you doing that today? If you aren’t, we hope to provide more ways for you to do your part in the future, as part of our overall objectives and new initiatives being developed. We are open to any idea you may have on this topic. Send them to Karl Kirsch or Lynne Weil at IBBA’s headquarters in Atlanta. Also, come see me or others on the board in Anaheim, and discuss your ideas with us. We will all grow because of you and your ideas, and your participation.

Working towards awareness is a lifelong journey that includes the association, its members, and others who service it. Sometimes, certain situations evolve that in hindsight may be misinterpreted, or possibly be inadvertently taken the wrong way. BizBuySell is a key partner of the business broker community, and has been a stalwart of support for and awareness of qualified business brokers, as well as the IBBA and M&A Source.

In recent weeks, it has come to my and others attention that a mailing by BizBuySell has caused some issues with our members. BizBuySell, like other organizations wants to promote the fact that selling a business is a process, and not a simple procedure that all can accomplish. They mailed out a postcard that, in retrospect, they understand was not interpreted by our members as they had anticipated. I’ve spoken with their senior executives, and they are very understanding of the concerns the postcard raised. They have apologized for any unintended ‘message’ that members believe it conveys, and have assured us that they are in support of our objectives. A copy of the letter can be seen by clicking here.

As many already know, BizBuySell is a major marketing component of our industry. They have also been a strategic partner with both the IBBA and M&A Source for many years, including the provision of a powerful listing service used by members of both associations. Their belief is that any seller, even if they believe that a business can be sold without assistance, should hire a qualified business broker or intermediary because the complexities are usually beyond the owner’s capabilities. To that end, they have and are committed to working with the IBBA and M&A Source to keep promoting our profession, the need to use a broker (and in particular an IBBA member), and the complexities surrounding a successful business sale.

We will continue to work with BizBuySell to bring new resources and awareness aids to our members, as it furthers those overall objectives we discussed earlier. Further, we’ve all agreed to keep open all lines of communication with the IBBA and M&A Source to ensure these types of issues are eliminated going forward.

Hope to see you all in Anaheim in June!

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Joe Lindsey, CBI, M&AMI

Credentialing Committee’s Update

Cease and Desist Letters

The CBI designation and our duty to protect it

Throughout the years, the IBBA’s prestigious Certified Business Intermediary (CBI®) has been widely acknowledged as a certification that separates the best of the best (proven professional excellence, verified experience and education) from the competition.

To ensure that the CBI maintains its integrity, the IBBA and the Credentialing Committee have established recertification requirements that must be met within a three year period. The committee is well aware of the economic realities of the recession and the so-called recovery and the impact those events have had on our members. So, if your recertification requirements cannot be met, then a one-year extension may be requested.

You should also be aware that failure to maintain your recertification requirements will result in the forfeiture of your CBI designation. Here again, the committee has established procedures to reinstate your CBI after it has been lost. Regardless of the committee’s best intentions and efforts to help our members maintain their CBI credential, the ultimate responsibility lies with the individual member.

The nature of our profession is such that we sometimes lose members, even CBI members. The reasons vary, but they include illness, death, retirement, and, unfortunately, expenses that outweigh business brokerage income. In the latter cases, the individual may choose not to meet the recertification requirements because their perception that the recertification costs do not translate into greater deal flow and increased income. In some of those cases, the individual also chooses not to renew their IBBA membership. From time-to-time, it is the committee’s responsibility to deal with those who do not comply with the posted guidelines. This is one of those times.

For some of those former IBBA and CBI members, they continue to market themselves as being a part of the IBBA network and that they still hold the CBI credential. As IBBA Chairman George Lanza states in his IBBA newsletter article this month, “Credentials that are misused for the purpose to mislead or defraud the consumer into believing that you possess such qualifications that you have not kept up with, could be extremely devastating to you and your business, not to mention the civil and/or criminal penalties you could incur.”

My disclaimer is that I am not an attorney and I am not qualified to give legal advice, so the following example may or may not fall within the guidelines of fraud.

The committee devoted a substantial amount of time to consider the plight one IBBA member in particular who let his membership lapse. Going back to the days of SmithBucklin, this ex-member had a history of being unable to meet the minimum CBI recertification requirements. As such, SmithBucklin granted him a one-year extension during his most recent recertification period. Also during that period, the CBI Task Force granted an automatic two-year extension to all CBI’s as shown below:

• Recertification due 12/31/09 – extend to 12/31/11
• Recertification due 12/31/10 – extend to 12/31/12
• Recertification due 12/31/11 – extend to 12/31/13

With the aid of the extensions, this ex-member was granted a six-year recertification period during which he was able to obtain only 26 of the minimum 48 recertification credits and one conference attendance. Realizing that he was in danger of losing his CBI status, this ex-member offered a compromise similar to what he had offered in previous years. His offer was rejected by the committee and we proposed that he abide by the posted
guidelines:

• Submit the CBI Reinstatement Application and its $55 fee,
• Complete the CBI recertification process, and
• Acknowledge that he may not use the CBI designation until the recertification process is completed.

During a telephone conversation with a committee member, he chose not to accept our proposal and let his membership and certification lapse. In a recent IBBA LinkedIn discussion group, this ex-member even acknowledged publicly that he let his IBBA membership lapse.

The IBBA states, “any CBI whose designation is terminated shall immediately return his/her CBI certificate, if one was issued, and any other similar items (pins, plaques, etc.). In addition, his/her store of stationery and other renderings mentioning the CBI designation must be immediately destroyed. It is specifically understood that the member or former member may not verbally or in print make reference to ‘former CBI,’ ‘past CBI,’ or the like.”

And yet, as of this writing, this ex-member’s website still proclaims that his network includes the IBBA and that, “he has been published by two magazines [sic] and is a Certified Business Intermediary who teaches continuing professional education to Certified Public Accountants . . .”

Until this ex-member complies with our demands, he is an example of someone who damages the credibility of CBI members who take their recertification and ethics requirements seriously. If you know of someone who is in violation of the IBBA’s posted guidelines, I urge you to contact them and tell them they are damaging your reputation as a credentialed CBI in good standing. Please encourage them to rejoin our great association and regain their CBI, or abstain from their unauthorized practices.

For those in non-compliance, cease and desist letters are scheduled for delivery in the near future.

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Scott Buskie, CBI, M&AMI

Marketing Committee’s Update

If you completed the Q1 Market Pulse Survey, I want to say thank you on behalf of the Marketing Committee. This survey not only helps continue to build the brand of IBBA, which should help you differentiate yourself from your competition, but it also should give insight to help your business directly. Let me give you a few examples:

1. One of the questions detailed who/where was the best source for client leads. Most previous surveys indicate it was past clients. After I saw that answer for a few surveys in a row, I asked a client I just sold a very simple question: “Do you know of anyone who might be at the retirement age or want to sell their business that I could talk to?” I asked him on the day we sold the business, and he said that he just might. He called me yesterday and I now have a warm lead of a friend of his who owns a glass company with five locations doing $8-$9MM in sales. I only have this lead because the survey showed me that past clients are not only a great source of leads but the best leads, and after one little question, I now have the potential of a six-digit fee. Sounds simple, but I had gotten away from it for some reason after 14 years in the business, and I can assure you it will be part of every closing celebration I have in the future.
2. I just met with another long time and very successful IBBA member and he used the valuation and multiples information from the survey to help him educate and land a big seller because he had access to data that his competition did not and it showed the seller he was an expert. These are just two real world examples of how people who are taking the survey and then getting the detailed results, not just the overview, are really using this in their practice and landing more deals, making more money and building a more sustainable successful business. If you have not taken the survey yet, please take the time to do it, I don’t think you will be disappointed. Also, if you have any feedback or ideas, please contact me and I would be happy to discuss. We constantly are improving our survey or changing the questions we ask because of all of your feedback. Don’t worry you won’t hurt my feelings!

Until next time, continued success!

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Marcie Woolworth, CBI, FIBBA

Membership Committee’s Update

Happy Spring! Well, hopefully it is spring where you are, anyway. Seems like Colorado has decided to stay in winter-mode for a little while longer, but the snow and moisture are much needed and appreciated! I hope by now you have had the chance to explore the new IBBA website. Your Membership Committee continues to inquire and review potential benefits that bring even more value to your membership.

I also hope that you have been able to contact our friends at ShareFile to see what options best meet your needs. And those of us who have been fortunate enough to have had some closings, I hope that you are taking advantage of the offer made by Pratt Stats—for every sale you record in their system, you receive three months of their services for free. What a great deal! They are one of the foremost experts in our field and having those compiled comps available at our fingertips is fabulous!

We are currently working on a member orientation and benefits manual to be called “The ABCs of the International Business Brokers Association” and it will be available on line in the near future. This will be a great resource for new and existing members to be able to get the most of out their membership.

The Membership Committee is also discussing the possibility of having a mentoring program using the expertise of our current members using certain guidelines to assist new members just getting into the business. If you have an interest in becoming a mentor, please let me know and I will add you to our list of volunteers.

As I have said before, there is a lot of work going on behind the scenes and soon you will see even more value to your IBBA membership. I enjoy hearing your comments and concerns and hope you will feel free to contact me at [email protected].

Wishing you GREAT success in 2013 and beyond! Things are definitely looking up!

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Dave Peterson, CBI

Member Spotlight

My journey toward business brokerage began after a 20-year career with a Fortune 500 company. In the second leg of my journey, I learned about small, Main Street business by becoming president of two specialty manufacturing companies, one retail/distribution company and one executive education company. While president at the portable battery company, I became part of our NYC parent company’s due diligence team. It was there that I had the pleasure of working with various business intermediaries. After we took our corporation public, I returned to Phoenix determined to begin my career in business brokerage. Thus, the start of my third career.

I think it was my corporate background that directed me to IBBA. I am a firm believer that strategy precedes tactics. The excellent experience that I received early in my business brokerage career was driven by the ideals and philosophy of the IBBA. Over time, I earned my Certified Business Intermediary (CBI). Simultaneously, I became more active locally; I joined the Valley Board of Business Brokers which evolved into the Arizona Business Brokers Association. I served on the Board of Directors both at the central chapter and at the state level. My business brokerage career is now at 12 years. I had wonderful and rewarding experiences selling Main Street businesses and their real estate. During this time, I started my own company, Arizona Business Intermediaries which continues today.

When the recession hit in 2008, I began looking to modify my business plan. I developed a strategy to create some new revenue streams, the most profitable was business consulting. I was able to cover my expenses with hourly and success fees. Throughout the consulting process, we are able to strategize and successfully negotiate a closing with poorly performing companies. This resulted in my company earning handsome hourly fees and a healthy success fee. I learned that in difficult times, one has to become both flexible and very creative.

As 2013 continues on, I see some of my old referral sources coming back to life. So far, I have been engaged by two different physicians looking to implement their business plans. One physician wants to own her own midsize practice. The other physician is looking to establish practices in three different locations in the greater Phoenix area.

I also believe in the importance of giving back to the profession and colleagues that mean so much to me. I am currently serving as Chairman of the AZBBA. I am very fortunate to have an excellent board of delegates and committee members, as I believe that we have an important responsibility to our members and chapters.

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Doug Robbins, FCBI, MCBC, M&AMI, CM&A, CSBA, CMEA

Member Spotlight

Do EOPS Really Work? (Part 2)

Let’s take a moment to quickly define a partnership: simply stated, it is when two or more parties enter into an agreement (formal or informal) to start, acquire, inherit, takeover in some manner, a business or venture for gain that the parties will operate together. Other terms for this activity can be found in any thesaurus and would include: a trust, a syndicate, a joint venture, an enterprise, a corporation, a company, a firm, a business, a conglomerate, an organization, a family, etc.

We need to take a few moments to understand people; one thing for sure is that most people change over time. Their likes, goals and aspirations change as they grow older and mellower. Not everyone changes at the same rate or time, and as a result, conflicts begin to arise. Spouses also have a lot to say and can significantly impact the activities/attitude/ambitions of their partners. They come to the table with different skills and attributes that are not equal between the partners and one feels the other doesn’t work as hard, care as much or contribute equally to the other. Communications between the partners is poor resulting in insecurity and mistrust arising. This paragraph could go on forever.

A number of years ago, I was called into a small food processing business in which there were two partners. In addition, the partner’s wives were also involved in the business. One of the partners had called me in and explained that they were having major partnership problems and was wondering if I could do something about it. I then interviewed the second partner, who begrudgingly and warily told me his side of the story.

I found that there were irreconcilable differences in opinions about how the business ought to be run. It was a high-profile business in the community, which commanded great respect and was expanding rapidly.

In valuing the business, I discovered that, if they were willing to keep the business for a couple of more years, the value of the business would more than double. Consequently, I went back to both partners and suggested that, if there were any way at all to resolve their problems, or at the very least declare a truce, then both partners could benefit greatly due to a surge in demand for their product. After numerous meetings, both together and separately, we reached an accord on how the business could be operated over the next twentyfour to thirty months, at which time it would be taken to the market and sold.

I remember the night very clearly; it was a Monday evening when we met at 7 o’clock in the home of one of the partners. We didn’t finish until almost 9 o’clock, whereupon we shook hands and reached the accord, after which one partner left. As I was gathering up my documents and preparing to leave, the wife of the first partner
arrived.

“Well, what happened?” she demanded. Her husband explained the truce; along with how they were planning to manage the business for the next 24-30 months, after which it would be sold.

At this point, flames shot from the woman’s eyes. “There is no way that that’s going to happen! I want that guy out of my business immediately!”

As a result, that business was sold, although for an amount far below what it was actually worth. While there appeared to be two partners, in reality there were four, and the two women didn’t really like each other; the fundamental problem was between the two women, not the men. Each woman told her man what to do and how to do it in dealing with the other man, and consequently the business was doomed to failure before it really succeeded. The moral of this story can be summed up by that old adage: Too many cooks spoil the broth. How true!

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Barry Berkowitz, Ph.D., CBI, M&AMI

2013 Affiliates Rewards Program

The IBBA is pleased to announce the kickoff of the 2013 Affiliate Rewards Program. In 2012, the IBBA and its affiliates were able to strengthen their working relationship, in part due to this initiative. All parties had great success in driving membership and hosting events; attendance at the 2012 IBBA Spring Conference was up and, as a result, participating affiliates were presented with more than 20 free IBBA course registrations and 3 free IBBA full conference registrations for use in 2013. Also, a grand prize of an all-expenses paid trip to a 2013 IBBA Conference, including fees, was won by member of the New England Business Brokers Association, for outstanding performance by NEBBA in this program.

Each member will earn points for their Affiliate that will be redeemable for future complimentary courses and/or conference registrations. There will also be a grand prize awarded to one of the members of the affiliate with the highest normalized score (A copy of the official rules is available by contacting the IBBA). This year, the grand prize will be free hotel, registration and course fees at a 2014 IBBA conference.

Points will be awarded to the affiliates as follows:

So, affiliate members, start collecting those points by registering now for the IBBA Spring Conference and Courses. Each month, the IBBA newsletter will update how each of the Affiliates is doing in this “Race to the Grand Prize”.

If you have any questions about this program, please do not hesitate to contact Maggie Nicholson, IBBA Education & Certification Manager at [email protected] or contact me at [email protected].

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Clyth MacLeod, Lifetime CBI

News and Views

Business Valuation: Art or Science?

To produce a credible and defensive opinion of value, it is important that the valuer follows a logical process to arrive at a conclusion.

The appraiser needs to be clear on the what, why, and when of what is valued—what is being valued (shares or business assets), why (the purpose of engagement), and when (the “as of” date of the opinion as values change over time). Full information (both financial and operational) underpins sound valuation and will identify both the risks and the value drivers. All valuation approaches (asset-based, earnings-based, and market-based) should be considered, and the appropriate methods applied.

So far, so good—lots of facts and figures. But, along the way, there will have been a large number of assumptions, subjective judgements and biases impacting the conclusion. This is the reason that two experienced, competent valuers can come up with significantly different values for a business, despite having the same information. A variation of 5% on either side of the average is often deemed as acceptable.

We all have biases which may affect our opinion of the industry, our assessment of the management and of key personnel. We all tend to be more optimistic or pessimistic, which can colour our view of risk or of forecasts of growth rates.

Because it is not a scientific process, subjective judgements must be made. What are the risks of losing a major supply contract or key employee; the possibility of new competition or technological changes? What is the level of personal goodwill? What is a realistic notional replacement management salary for the owner, commensurate with his or her experience, skills, responsibilities and relationships?

And then there are the assumptions. If fair market value is the standard then a cash sale is assumed, reasonable transition provisions and non-compete undertaking is assumed, and both parties are assumed to have reasonable knowledge of the business. These factors are not always there in the real world.

The accurate answer will generally be a range arrived at after following all the steps in the process.

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Keith McLeod, CBI

From the Editor’s Desk

It is crucial for members to read my friend Steve Wain’s article above and read the enclosed letter from BizBuySell. I have also spoken to the existing and former heads of BizBuySell, and believe their post card was poorly handled and in no way is intended to compete with the business broker community. We represent their market, income and value.

Periodically, I host the top four to five brokers in Tucson for coffee, donuts and to discuss listings we can work together on. I also include an educational portion for them as well. On following meetings, I ask one of them to host the educational portion. Here is what I covered in my April meeting:

1. Objective – your client’s objective is to sell their business. Record why.
2. Measures – Discuss the steps necessary to sell their business? Get seller input to discuss the issues both of you are facing in the market.
3. Value – Spend more time discussing their benefits of selling their business. Record them, and I suggest documenting them on your listing agreement and constantly refer back to them.

In this meeting, I also reviewed the basics—a series of steps taking a listing:

1. The purpose of your call or letter is to establish a meeting with a business seller.
2. The purpose of your subsequent meeting is to establish a trusting relationship with the seller.
3. This trusting relationship leads to achieving a conceptual agreement on a listing.
4. The intent of a listing is to improve the client’s condition and to get adequately paid.

It is not selling; it is providing value for your prospect/client. Finally, work into your client/prospect time together asking what I call my million dollar question: First I ask permission, “do you mind if I ask you a question?” When they respond yes, I ask, “what are you most proud of that you have achieved in your lifetime at work and outside of work?” Listen carefully because they will tell you how to sell them.