Main Street News December 2020




Barry J. Berkowitz, PhD, CBI, M&AMI

Barry J. Berkowitz, PhD, CBI, M&AMI

Year 2020 has been a difficult year for many of us. However, despite the adversity, we are getting through this. We have all taken that adversity, faced it head-on and created new ways to do things. I’m sure several aspects of your business look very different now compared to when this year started.

If it were not for the viral pandemic, we would have hosted our annual in-person conference. All of us were supposed to have met in May in Louisville, Kentucky to share in seminars, workshops, networking and meeting with our friends and colleagues to share our experiences. Unfortunately, we couldn’t do any of that.

Wait a second, not so fast – we found a way. With the creativity and ingenuity of our members, volunteers and staff, we were able to accomplish all of that in a first-time, all virtual conference. We were able to have all those events, including our awards ceremony, keynote speaker and other get-togethers by utilizing relatively new technologies, such as Zoom, to create an entirely virtual conference that was highly rated by attendees. We then released our new online Supplier Directory so you can connect with industry solution providers that normally you might only see at a Conference.

You asked for more education – we found a way. Instead of live courses, this year we released several new, online/on-demand courses and provided a lineup of live, instructor led virtual courses. With options from the #100-#300 levels we were able to meet the educational needs of brokers at all levels in ways not utilized before. Thank you to Steve Zimmerman, Ken Eisenband, Erin Crawford, Peter Goodman, Steve Wain, Cress Diglio and Tawnya Gilreath for dedicating their time and talents to make this happen!

You wanted to get your CBI – we found a way. We took our Recasting and Pricing Summits virtual with much success (kudos again to Lou Pereira) and with testing centers re-opening staff has been working tirelessly with members to get their CBI exams scheduled. We’ve also successfully adapted the written/recasting portion of the exam to an online format, thereby streamlining the process and providing instant exam results. Thanks to Steven Beal for leading this initiative!

I could go on. In a year filled with so much challenge, WE were able to accomplish significant strides in education and supporting members’ success. Saying that we’re ‘in this together’ has almost become cliché these days but in our case it’s the absolute truth – everything we’ve done this year was the result of many people donating their time and expertise. And in this we perhaps find that strongest value proposition of belonging to the IBBA: You Are Not Alone. Despite the odds, membership has grown by more than 10% this year, continuing to make us a strong and vibrant community dedicated to advancing our profession.

And although I don’t know what 2021 will bring, I know we will continue to find a way. Our 100+ Committee volunteers are already collaborating on the Conference, education, new member support programs and more. Further, I have every confidence in our Board’s continued stewardship, and in Lisa Riley’s ability to lead as Chair in 2021. So, with all these incredible people involved, I know WE will make 2021 great.

I thank you again for the honor of serving as your Chair this year. It was not the experience I imagined – yet in some ways, it was even better than I imagined. I recognize now more than ever how important my IBBA relationships are to me both professionally and personally and I’m sincerely grateful to support this organization that has given me so much.

Wishing you Happy Holidays and a prosperous (and healthy) 2021.

Barry J. Berkowitz, PhD | CBI, M&AMI | Berkowitz Acquisitions | [email protected]



A Pandemic Recession?

Emmet Apolinario, CEPA, CVB

Emmet Apolinario, CEPA, CVB

I’ve always considered the business brokerage industry an important niche professional service, essential in just about any economic climate. Despite this, we do get affected by what is happening in the economy. With this unprecedented pandemic we will be experiencing a fall-out that most of us have never lived through.

For those intermediaries who have been around 15 plus years, we have seen a myriad of market reactions from our industry peers. For many the 2008/2009 recession was impactful enough that some of our colleagues left the industry. I know several previously close colleagues who left our profession and took on different positions when the economy turned. One IBBA member, who left the industry, is now a very accomplished entrepreneurial professor for a prestigious university. He went on to pursue his PhD and we recently exchanged stories. For him, he felt it was a good move to leave in 2009.

I write this article as someone who has witnessed a variety of ups and downs in our industry. I believe there were important lessons learned from the previous recession and, as much as we want to ignore it, there are tell-tale signs of an upcoming “dip” in the economy. Some predict a “V” recovery and as recent as last week, I heard of a “W” where it is a double-dip and double-quick recovery. Whatever it will be, let’s brace for it.

My intent is to not dwell on the negatives, but to reinforce the positives that our industry has shown over the years to be resilient. What creates resiliency is what you make of it in the next few months and maybe even years.

One big question to ask is, “Am I prepared to ride it out?” Just like the business sellers we work with, depending on your experience and tenure in the industry, you should be honest with yourself. Do you want to ride it out? In the early 2000s when we had the dotcom bubble, I was in my late 30’s, despite my youth at that time, I was burned out, and did not want to ride out the tech bubble. I was ready to move on, sell the business, and do something else. That was me and that was my choice. I could have “ridden it out” and waited for the recovery, but I was done, ready to move on. The question here is, are you prepared to stay? I know as with the previous downturn; we too have colleagues that today are in much stronger position to ride out another recession.

If the option is to stay the course, the next question is, “What will it take to ride it out?” One mistake I have seen during the previous recession is the tendency to discontinue association memberships. The former colleagues, mentioned earlier, did not renew their IBBA membership, likewise in the state where I’m from, they discontinued their membership to our local broker association. I consider this move, a potentially detrimental mistake. Losing your connection to our industry peers and associations is potentially a “kiss of death” to your profession.

IBBA and other broker association memberships provide the critical industry updates that you need to survive and maybe even thrive during a downturn. The Market Pulse Report that IBBA distributes is invaluable during any economic cycle. It provides critical insight to the industry which provides brokers with the knowledge to approach and deal with the market strategically.

The IBBA and all the tools related with your membership is your “mirror” to observe yourself and everything around, if you’re on track and involved with the right activities. The colleagues that did not renew their membership to the association struggled to get adequate industry feedback.

Be Prepared to Work Hard
“What doesn’t kill you, makes you stronger,” comes from an aphorism of the 19th century German philosopher Friedrich Nietzsche. Hard work never killed anybody, right? We had some great years with the economy and our industry. I heard from many in recent years, “I’m only focusing on larger deals because the smaller deals take as much effort and pay less.” When things get tight, every opportunity is an opportunity. Sellers of small businesses still need the professional help you can offer to accomplish their retirement goals.

Adjust Your Expectations
This will not only resonate with business sellers but is important for you as an intermediary to consider. The lending and banking financing climate may not be as robust moving forward. What can you and your seller modify to create a more marketable business?

This Too Shall Pass
I know it’s been said many times, this Pandemic is unprecedented. When in history have we seen the entire nation suddenly stop? Yes, we have a high unemployment rate and are making huge adjustments to how we work, study, and play. As in past recessions and pandemics, we learn from it. We adapt as a nation, as professionals, and as a people.

Improve Your Business
If things do slow down, take this opportunity to improve on your business model. Are there brochures that need updating? Is there a CRM software you have been wanting to implement but have been too busy in the past to evaluate? Is it time to get a new marketing campaign cued-up to help with the recovery? Is there a certification that can help enhance your practice? With a variety of courses now offered online by IBBA along with the Educational Summits, it may just be the right time to invest in your Certified Business Intermediary (CBI) Certification. I pursued my Certified Exit Planning Advisor Certification-CEPA during the last recession and have maintained it since.
We may never all be the same again after this Pandemic, but what you can certainly rely on is that our work, and our profession is valuable to the business community. The industry knowledge, years of training and the support community you’ve developed will be an asset you can count on regardless of the economy as long as you’re willing to do and make the right decisions.

Emmet Apolinario, CEPA, CVB | Sunbelt Business Brokers | [email protected]



How Virtual Data Rooms Enhance Communication Between Deal Participants

Karen Perkins | CEO, Vault Rooms, Inc.

Karen Perkins | CEO, Vault Rooms, Inc.

The Importance of Proper Communication & Trust During Deals and Transactions

The uninterrupted flow of communication is crucial to most deals and transactions. Deal participants often need to stay in touch during the whole process to ensure that things move forward in a smooth and frictionless manner.

Trust also plays a vital role in the quality of communication during deals. Taking adequate measures to prevent the misuse or leakage of sensitive information is often a key priority to disclosing parties during deals and transactions. However, building trust becomes a significant challenge in scenarios where the disclosing party does not have a means to securely share business-critical information with recipients.

How Virtual Data Rooms Facilitate Communication & Foster Trust

Virtual data rooms (VDRs) are an excellent solution for companies engaged in deals to streamline communication between deal participants and also cultivate trust in sharing sensitive information on a highly-secure online platform.

VDRs facilitate communication by streamlining the process of document sharing and tracking between parties involved in the transaction. They provide all deal participants with easy, highly-secure and undisturbed access to business-critical information. This allows deal-makers to keep track of things even when their partners are remote.

VDRs also foster trust between deal participants by allowing them to feel more at ease while sharing business-critical information with external parties. The sensitive information circulated in virtual data rooms during deals is highly-protected and free from data leakage risks or misuse.

A company’s trust is further bolstered when using virtual data rooms because of the ability to assign progressive security levels to documents and also to monitor user activity to ensure the absolute safety of business-critical information.

How Virtual Data Rooms Help Companies Overcome Communication Challenges During COVID-19 Times

The COVID-19 pandemic has brought with it a new set of communication challenges primarily due to the dispersion and isolation of deal participants. However, companies involved in deals can easily overcome these communication challenges using a virtual data room.

With VDRs, companies that are engaged in or preparing for deals need not be concerned about unwanted hindrances in communication during these trying times. In regards to document collection, sharing, tracking and communication, VDRs provide companies with a platform that facilitates secure and seamless communication despite the current COVID-19 pandemic quarantine mandates.

According to the Pew Research Center, technology improvements in user identification and authentication, like those found in Virtual Data Rooms, will serve to build trust in organizations transacting online over the next decade. Virtual Data Rooms are proud to be at the forefront of this technology with platforms that enhance communication, streamline transactions and provide a secure solution that clients can rely on.

About Vault Rooms
For more than 14 years, Vault Rooms has been an industry-leading cloud-based virtual data room provider and is proud to be a sponsor and solutions partner with IBBA. Vault Rooms has facilitated tens of thousands of global M&A transactions across a wide range of industries. For more information contact [email protected].

Karen Perkins | CEO, Vault Rooms, Inc. |



The Impact of a PPP Loan on Recasting

Monty W. Walker, CPA, CGMA, CBI | Walker Business Advisory Services

Monty W. Walker, CPA, CGMA, CBI | Walker Business Advisory Services

A key point regarding a PPP Loan is that it is a loan. When the Borrower receives the loan proceeds the proceeds should be recorded on the Balance Sheet as a Note Payable which is a liability. The loan proceeds should not be posted on the Income Statement as income.

If the loan ends up being forgiven, it should be handled for income reporting as follows:

  1. Financial Statements (specifically the Income Statement) – The forgiven loan amount is an elimination of an obligation to pay a debt. An appropriate reporting of this elimination is for it to be presented as “Gain on Extinguishment of Debt.” This is a Financial Statement only presentation. This will be removed when the income statement activity is placed in an income tax return.
  2. Income Tax Return – The forgiven loan amount will result in “Loan Forgiveness Income” but this income WILL NOT be subject to income recognition which means it will not be subject to tax. As a result, the forgiven loan amount will not be included as income in the income tax return.

Regarding expenses, the Income Statement will reflect the expenses paid with the PPP Loan proceeds. With respect to tax reporting, per IRS Notice 2020-23 as amplified by IRS Notice 2020-35 and as modified by IRS Notice 2020-39, the position of the IRS is any expense paid with PPP Loan proceeds is not eligible as a tax deduction if the PPP Loan is forgiven. What this means is the expenses paid with the PPP Loan cannot be tax deducted on the tax return if the PPP Loan is forgiven. On the other hand, if the PPP Loan is not forgiven, the expenses paid with the PPP Loan can be tax deducted.

Recasting certainly becomes a challenge when dealing with these issues. Recasting should be handled as follows:

  1. Financial Statements (specifically the income Statement) – When recasting from Financial Statements, if the loan is not forgiven, the expenses paid with the PPP Loan proceeds can be added back as a One Time Event. If the loan is forgiven and also properly recorded, the forgiven PPP Loan should be reflected in the Income Statement as “Gain on Extinguishment of Debt.” The expenses paid with the PPP Loan proceeds will also be reflected in the Income Statement. In this case, recasting is simplified because there is no adjustment to reflect.
  2. Income Tax Return – When recasting from an income tax return, the PPP Loan, whether forgiven or not forgiven, will not be reflected as income in the tax return. If the loan is not forgiven, the expenses paid with the PPP Loan proceeds are tax deductible and will be reflected as expenses in the tax return. If the loan is forgiven, the expenses paid with the PPP Loan proceeds are not tax deductible and will not be reflected as expenses in the tax return. In the case of the loan not being forgiven, the expenses paid with the PPP Loan proceeds can be added back as a One Time Event. In the case of the loan being forgiven, the expenses paid with the PPP Loan proceeds are not tax deductible and as a result will not be in the tax return. In this case, there is no income or expense in the tax return associated with the PPP Loan, so recasting is simplified because there is no adjustment to reflect.

The information provided herein is based on the PPP Loan being correctly and properly recorded for both Financial Statement and Income Tax Return reporting.

Monty W. Walker, CPA, CGMA, CBI | Walker Business Advisory Services| [email protected]



Differences Between Business Ownership and A Job

Jeffrey D. Jones, ASA, CBI, CBA

Jeffrey D. Jones, ASA, CBI, CBA

The American Dream for many people is to own a home and a business. Yet only about 35% of the US adult population own a home and only 2% own a business. According to the SBA, there are approximately 8 million full-time businesses with at least one full-time employee in the US, wherein 12,500 are publicly-held and the rest are privately-held businesses. Most of these privately-held businesses have less than 50 employees and have been despairingly labeled as mom and pop businesses. Thus, 98% of the adult population in the US have a “job” and work for someone else while dreaming of owning their own business. I call them “closet entrepreneurs”, defined as those who lack the two critical ingredients to get into their own business, which are lack of money and/or lack of guts. Buying a business is sometimes labeled despairingly as buying a job. The purpose of this article is to make a distinction between business ownership and having a job.

As a main street business broker for 45 years, I have been involved in the sale of several thousand small to midsize businesses. I have had the opportunity to analyze, value, and sell many types of businesses ranging from one-man operations to businesses with several hundred employees. I thoroughly enjoy working with entrepreneurs and helping them accomplish their dreams of selling or buying a business. Several weeks ago, I received an email from Gayle Sutton, a franchise broker in Houston, TX who sells new franchises. In her promotional material she provides a great list of differences between business ownership and having a job which highlights the benefits of owning a business verses being an employee working for someone else. As she says in her material “Only you can decide which one is right for you”. The following list is an adaption of her statements.

Business Ownership

  • Business Owners are leaders, so you have to like leading and mentoring others.
  • You see problems coming so you have a chance to react without having to wait for others to tell you what to do.
  • Not every day is perfect, but you do have the ability to adjust and control the outcome.
  • You have the security of knowing you are the last one fired
  • There are three income streams when owning a business:
    • You are paid a salary that you define.
    • There are Tax savings:
      • When you pay $100 for a cell phone, you have to have $150 in income to pay for that. But when you own a business, you can deduct all or a portion of those expense to the business.
      • A person that was making $100k with a job can have the same or a better lifestyle making $70k with a business for this reason.
    • Growth equity:
      • You are paid a sum multiple times your investment when you sell. For example, if we have businesses that cost $50k up front, but sell it in 7 years for $1.2 million, that’s 24 times your original investment.
      • You get a piece of the growth of the company through wealth accumulation when you sell that business.
  • A flexible lifestyle
    • Free to make your own schedule
    • Free to take vacations whenever you want
    • Freedom to take care of your family needs as they arise
  • Unlimited potential on salary and earnings, wherein you can take an owner’s draw and pay less taxes
  • Opportunity to be paid for passively running the business once it is in motion.
  • You make the rules. There is no boss to report to, because you are the boss
  • Able to wear the clothing that is comfortable to you
  • Pride of ownership
  • You choose the clients you want to work with
  • Sphere of influence is different; you can make and meet prominent figures as a result of your mutual business relationships.
  • Passion of what you do helps the economy grow and provides the opportunity to creat jobs


  • Steady paycheck, as long as you hold the job. Unfortunately, you can be fired or laid off at any time! There usually is no warning or chance to react in these situations.
  • Health benefits are offered by some employers.
  • As you age, you become less valuable to the company.
  • Statistics show not only will you have less job security, but your income will actually go down. For example: You were with your old company for 10 years and you got laid off. At the new company, where do you think you will be in the list when they need to do layoffs?
  • Your salary is always the same no matter how many hours you put in on the job.
  • You get paid for work done but have no opportunity for passive income.
  • You do not have the opportunity to build equity in the company.
  • You have to consider where your employer is located and if it’s a reasonable distance to your home
  • Must follow the company’s dress codes.
  • You are always a subordinate.

As Gayle tells her customers, “You have the option of either owning your own business or keeping a job. Only you can decide which one is right for you”
So the next time, you as a business broker are talking to a closet entrepreneur customer, let them review the above list and decide which is right for them, owning their own business or keeping their job. For many people, buying an existing business may be similar to buying a job, but has far more benefits than remaining just an employee working for someone else.

Jeffrey D. Jones, ASA, CBI, CBA | President of Advanced Business Brokers, Inc. | [email protected]



Congratulations to our New 2020 CBIs!

The IBBA would like to congratulate those members who earned their CBI designation in 2020. These individuals have worked long and hard to achieve this certification, especially during this challenging year, and their efforts are rewarded and recognized. Congratulations to our 2020 CBIs!

Jared Barfuss
Brad Coffman
Dana Cole
Kent Cooper
Aaron Evans
Frank Giacomelli
Bibiana Gillis
Chris Goebel
John-Erik Grain
Bob Harris
Chandler Hueckel
William Ilgenfritz
Craig Johnson

Anton Joro
Ryan LaPrad
Patrick Marsch
Randy Mitchell
Gerard Perillo
David Rummell
Brad Ruth
Shaun Rudgear
Mitra Sanai
Chris Sater
Walter Szymanski
Sicong Wang
John Woodhull

The Certified Business Intermediary (CBI) designation is a prestigious designation exclusive to the IBBA. It is an indication that a Business Broker has much education and experience in business brokerage and demonstrates excellence and commitment in the field. CBIs are knowledgeable, experienced, and hold themselves to high ethical standards.

CBIs must fulfill required educational assessments and prove their abilities as a skilled Business Broker before the designation can be achieved. For those who qualify, the CBI Fast Track program is also an option. This path to the CBI is for tenured individuals who can provide evidence of significant experience in business brokerage, whether that is through years spent in the field or completed transactions.

Candidates can now complete the CBI exam entirely online. Both the multiple choice and the recasting portions can be completed on IBBA University, which means candidates will know their score immediately. This eliminates time waiting for results and streamlines the test taking process.

The designation is well known; CBIs are recognized throughout the industry. As an additional benefit, CBIs get priority listing in business broker searches on the IBBA website.

If you are interested in obtaining the CBI, please visit the Become A CBI page on for a detailed outline of all requirements. If you have any questions, please email [email protected].


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