- October 10, 2019
In this Letter From The Chair edition I have some news to share with you regarding the CBI credential.
As you may know, your Board of Governors is constantly working to improve your member experience working with and through the various committees to update and create new educational courses, workshops, and webinars. With an incredible amount of help and support from staff and volunteer committee chairs and members, they also collaborate to maximize the value of conferences and summits.
Today I’m writing to let you know about how the Credentialing Committee, with the confirmation of the IBBA Board of Governors, has worked to enhance the value and reputation of the Certified Business Intermediary (CBI) credential.
The CBI has long been established as the premier credential for business brokers and practitioners. Having a solid foundation of education, validated by applicants having to pass the comprehensive CBI exam, the credential has now been further enhanced.
Transactions submitted for initial CBI certification or for recertification now must meet an expanded list of criteria. In addition to the prior requirements, transactions must now ALSO meet 2 of the following 5, except as noted below*:
This clarified transaction criteria was implemented to enhance the value of the CBI credential to you, your peers and in the marketplace. Prospects will now recognize that the CBI is not just a ‘paper’ credential, but indicative of a practitioner who has received the requisite education, passed the comprehensive CBI exam and completed at minimum three qualifying main street transactions. These changes are not punitive or intended to unfairly make earning and maintain your CBI credential more difficult. It was the intent of the Credentialing Committee and your Board of Governors to maximize the value of your designation in the marketplace.
For those who may be wondering there is a 3 year look back period to have completed these 3 qualifying transactions leading up to the CBI application or CBI recertification.
For answers to additional questions please feel free to reach out to IBBA staff at 888-686-4222 or me personally, your Credentialing Chair and 2019 IBBA Board Chair, at [email protected].
Enjoy your Fall season and Good Selling!
Jeff Snell, CBI, M&AMI | Enlign Advisors | [email protected]
written by Lou Vescio, CBI, M&AMI
Having been part of the Business Broker or Business Advisor Profession for about 16 years, I have seen many new Brokers come and go! I have also seen many grow their practice into a very lucrative and profitable enterprise. The question is why do some Brokers succeed and prosper, while others give up in six months to two years? Having participated in several professions in the past fifty years, from flying jets in the Air Force, to a 15 year career with a Fortune 500 company, to building a couple computer training businesses and selling them, and finally becoming a Business Broker, I believe I have identified a few traits that make the great Brokers great and why the Brokers that do not succeed fail.
Perseverance – If you have ever read anything about Navy Seals, they never give up! The Basic Underwater Demolition/SEAL (BUD/S) school includes some of the most difficult training that exists, and 75% of the participants drop out due to the physical and mental stress. Perseverance is the key to their success.
This is not to say that becoming a great Business Broker comes close to becoming a Navy Seal, but the “failure is not an option” mentality exists is all the great Business Brokers I know. The Business Brokers workday is not a “9 to 5” type of day, but more of “I will do whatever work I need to do, whenever I need to do it” type of day!
Education – Great Business Brokers are always learning more about their profession. Education obviously includes taking IBBA and M&A Source courses and workshops, but it also includes reading everything available that is pertinent to the profession. Great Business Brokers also network with other great Brokers across the country and even across the world. Every business is different, every deal is different, and sharing and networking with other professionals offers new and fresh ideas and concepts.
Learn to say “No” – One of the Brokers I admire is Jim Afinowich, Managing Partner with IBG Fox & Fin in Scottsdale, AZ. Many years ago, he taught a workshop on saying “no” to bad listings. New Brokers tend to take almost any listing, just so they have something to sell, but statistics tell us that 75% to 90% of businesses listed by Business Brokers do not sell! On the other hand, great Brokers sell 80% to 95% of their listings. Learning to price businesses properly (that Education thing above), properly analyzing good businesses when writing a great CIM (again that Education thing), and walking away from unreasonable sellers by “just saying no” (in a nice way of course) are a few keys to success.
Marketing – While we all like to receive great referrals, most Brokers would go out of business if they did not market their services. Without going into the details of what kind of marketing a Broker should undertake, the key is marketing costs money and it is a requirement to succeed. The IBBA offers courses, workshops and webinars on every type of marketing, and the costs can vary from hundreds of dollars to tens of thousands of dollars. Fifty years ago, Tom West suggested mailing a hundred letters a week and calling that same hundred business owners a week later. That is probably the bare minimum and may still be one of the most effective tools. Marketing is one of those “just do it” activities and do as much as you can afford!
Salesmanship – While many people may disagree with me, we are saleswomen and salesmen. If we do not sell, we don’t make money! Some Brokers like to refer to themselves as advisors, consultants, or intermediaries, but in the end, we are still salespeople! More precisely, we engage in consultative selling, meaning we focus on creating value and trust with the prospect and exploring their needs before offering a solution. Our first objective is building a relationship, and then we provide the right solution to the problem. There are many courses and books on how to sell everything under the sun, but one of the best sales books a Broker can read is How to Win Friends and Influence People by Dale Carnegie (1936). It is more about getting people to like you, and that is the first step in selling. You can read it here for free: https://images.kw.com/docs/2/1/2/212345/1285134779158_htwfaip.pdf.
Find a Mentor – Having a mentor when starting out as a Business Broker is a big plus. Having an experienced and trusted adviser that will assist in training can shorten the timeline from “Start” to “Success!” It is also advisable to work in a successful brokerage when starting out to avoid many costly and time-consuming mistakes. Whether it be a franchised brokerage or an independent brokerage, find a mentor that meets the following criteria: 1) knows how to make a lot of money selling good businesses, 2) promotes IBBA education and certification, 3) assists in valuing and critiquing potential listings and 4) assists in negotiating difficult transactions.
Become an IBBA Contributor – One of the best ways to enhance your IBBA experience is to actively participate in the annual conferences, courses and workshops and share your experiences with others. Join a committee or two and be active. The friends you make and the experiences you share with others will enhance your Business Brokerage experience.
Finally, to all you Great Business Brokers out there, make friends with a new member at the next IBBA Conference and offer yourself as a mentor. You will find it very rewarding!
Lou Vescio, CBI, M&AMI | Coastal Business Intermediaries & Agency Brokerage Consultants
submitted by Jordan Green, BizBenNetwork.com
In a year long study conducted by Peter Siegel, MBA, hundreds of business buyers, owner/sellers, and business brokers/agents utilizing long time platform BizBen.com were interviewed in conjunction with the development of BizBenNetwork.com in order to determine the best practices for advertising a business for sale listing online.
The focus group of active BizBen Users consisted of:
It is estimated that over 70% of all small businesses for sale that are put on the market by business owner/sellers, agents, and business brokers have a difficult time selling because they don’t utilize the proven advertising and marketing concepts outlined below.
Writing an effective posting to sell a small to mid-sized business takes a little more time in the beginning but will pay off in the end, resulting in faster sales and more businesses sold.
Timing (Day Of The Week) Is Everything When Submitting A Posting To A Website
In order to receive the best response to your postings online, timing is critical. The old school method for inputting new business for sale listings involved calling in new postings at the end of the week, most commonly on Fridays for the weekend newspaper’s Sunday edition (heavy buyer readership).
As the search for available businesses transitioned from newspapers to the internet, the trend of potential buyers searching for businesses also pivoted from the weekend to earlier in the week, Monday through Thursday. The bottomline: place your business for sale listings earlier on Monday to catch the Email Alert functionality going out to potential business buyers. You’ll then get their attention for several days when the traffic of business buyers searching to buy a business is heaviest.
Make It Easier For Potential Business Buyers To Contact You
To start, you must make it easy for potential business buyers to contact you. Be sure to include all phone numbers (including cell, letting them know they can text you) and email addresses where potential buyers can reach you immediately. When contacted, make sure you call or email them back promptly (within 3 hours).
The strongest feedback we received from business buyers on this topic was that they wanted to reach brokers directly and not have to navigate an office phone system with 10 different options when calling for more information on a posting. Best practices dictate that if you want to sell a business quicker, let buyers contact you via cell or text. Also, buyers told us 50% of all emails they sent to brokers requesting more information went unanswered.
4 Critical Things To Remember When Posting A Business For Sale:
We have found that the following phrases have provided business owner/sellers, business brokers, and agents, with the most success:
Best Text And Phrases To Utilize In Your Business For Sale Posting (Only Use If True):
Good Books And Records, Verifiable Financials, Growing Sales, Growing Revenues, Consistent Earnings, Stable Revenues, High Adjusted Net Income, Provable Cash Flow, SBA Loan Pre-Qualified, Owner Carry Back Note, Owner Will Carry, Owner Financing, Owner Will Carry A Note – Help Finance The Deal, Owner Will Train, Owner Is Retiring, Training Will Be Provided By Owner, Training And Support Provided, Great Location, Real Estate Included, Health Forces Owner To Sell, Staff In Place, Absentee Run, Semi-Absentee Run, Relocatable, Home Based, Long Established, Employees In Place, Management In Place, Easy Operation, Easy To Learn, Room For Growth, Steady Clients/Clientele, Computerized Operations, POS System In Place, Updated Client Database, Good Track Record, Long Lease In Place, Great Lease Terms, Will Cooperate With Brokers And Agents.
Remember, buyers of small businesses are most interested in location and specifics about the business, what the provable annual adjusted net income is, and what opportunities the business has for growth in the future. The more information you can give them about these items, the higher probability you will get a better response to your posting.
When posting a business for sale listing, being sure to use the correct text, phrases, and strategies is just as important as avoiding the worst.
Worst Text & Word Phrases To Avoid Using – Business For Sale Postings:
Worst Posting Strategies To Avoid:
Your business for sale postings will shape a prospective buyer’s first impression of you, your client, and your client’s business. Well written postings for today’s buyers and the best practices discussed above serve as the foundation for successful sales in shorter periods of time.
Jordan Green | BizBen.com and BizBenNetwork.com | [email protected]
Written by Kyle Griffith, CBI
Every company has a natural lifecycle. While the name on the business may remain the same, the philosophy, goals and objectives change as the ownership changes. Unfortunately, many owners unwittingly sabotage the value of their business by failing to plan for its eventual sale far in advance.
Selling your business may be the farthest thing from your mind right now, but time waits for no one. At some point, your company will be passed on to the next generation, closed or sold. If you envision selling anytime in the future, it’s important to avoid some common pitfalls that undermine the value of your business during negotiations.
Plan for the Sale of Your Business
Most companies are small, private family-owned businesses. There are far too many heartbreaking stories of companies sold at fire sale prices (or not sold at all) because of sudden illness, death or retirement. If you fail to plan for the sale of your business years before you’re ready to sell, you’re almost guaranteed to receive a lower offer. Many small business buyers are professionals, and they love a distressed sale. You’ve spent a lifetime building equity into your business, so don’t let it slip away due to poor planning. Take the time to develop a strategy for selling your business to benefit yourself and your family.
Kyle Griffith, CBI | The NYBB Group | [email protected]