IN THIS ISSUE: Letter From the 2020 Chair A Pandemic Recession? How Virtual Data Rooms Enhance Communication Between Deal Participants The Impact of a PPP Loan on Recasting Differences Between Business Ownership and A Job New CBIs in 2020! LETTER FROM THE CHAIR: We Found a Way Barry J. Berkowitz, PhD, CBI, M&AMI Year […]
Main Street News February 2013
Save the Date for the 2013 Spring Conference
Be sure to mark your calendars for the 2013 IBBA Spring Conference being held in Anaheim, California June 11th through the 14th, at the Hilton Anaheim. Your IBBA board members are committed to providing you with new educational courses, along with the courses you’ll need to gain your certification, engaging workshops, networking opportunities and much more.
More information and registration will become available soon!
George Lanza, CBI, M&AMI, CSBA, MEA
Who Wants to Be an IBBA Member?
Countries around the world want to be a part of the IBBA! Romania has requested to become a chapter of our association, and we are working on the logistics to accommodate them. The reason? They understand the value it represents in front of their clients, and they know that we are the deal making organization with education courses to assist in furthering our profession.
In North America, unfortunately, many deal makers have let their membership lapse and their hard earned Certified Business Intermediary certification expire. Sadly, they are now realizing their great loss. Others can no longer afford it, and despite their desire to remain a member, they must drop out.
Due to the many requests and recent economic hardships so many of our members endured, the IBBA Board of Directors and the Credential Committee have created a re-instatement process to help individuals re-instate their membership and regain their credentials. Please visit the IBBA website for more information.
Keep in mind that, your professional credentials and current up-to-date knowledge are what separates you from the competition and validates you with every new prospect and with each seller’s presentation.
The Board of Directors, Meeting Expectations, and all the committees are dedicated to your professional advancement and education. We are generating six to eight new, relevant courses and several workshops to be showcased at our upcoming Anaheim Conference, June 10-15 to advance your career and prepare you for the market recovery ahead.
If you are experiencing challenging times, you cannot afford not to remain a member or give up your hard earned CBI certification! If you have not yet renewed your membership, I urge you to do so today! It is one of your most valuable assets, and I use it with every new presentation very successfully. These are tools I utilize daily in our advertising and with my customers during the process leading to the engagements.
I look forward to seeing you in Anaheim.
Karl Kirsch, CAE
Executive Director’s Message
Seeing Positive Signs for 2013?
When we talk to members, there is a general sense that the economy is getting better. Many have reported that their business ticked up following last year’s election and prior to the fiscal cliff worries at year end. Now that we are hearing about January, the uptick in business appears to have staying power.
We are seeing other evidence that 2013 could be a good year. The Equipment Leasing and Finance Association’s (ELFA) monthly survey published at the end of January indicated that their respondents said they financed a record $11.5 billion of new equipment in December 2012, up from $10.8 billion in the year-earlier period. While December is typically the busiest month for equipment financing because companies are completing budgeted programs, equipment leasing volume for the year rose 14% over 2011 to $84.4 billion.
There were other positive signs reported in the survey despite the still-unresolved debt ceiling and mandatory government spending reduction in the US. Credit-portfolio quality measured by the percentage of net receivables of loans and leases past due by more than 30 days dropped to its lowest level in two years to 1.6%. That number had been hovering at about 2% or more the month and year prior. Charge-offs, however, amounted to 0.6% of respondents’ net receivables last month, down from 0.7% a year earlier, but up from 0.5% in November.
We think it is a good sign to see that companies were investing in more depreciable assets throughout 2012. This rate of increase is generally an indicator that business is improving and new leasing is not simply scheduled replacement of existing equipment. More sales volume, lower receivables, and newer equipment can also mean increased valuations for companies that go to market.
To find out more on how the market is performing and how to position your business, I hope you plan to attend the 2013 IBBA Spring Conference and Main Street Marketplace scheduled for June 11-14 in Anaheim, CA. There is a lot of energy and excitement around this year’s conference, and we are planning on having an economist and small business administration expert talk to us. Best wishes on a good year and hope to see you all in Anaheim.
Kevin Dempsey, CBI, CMC, CMEA
M&A Source Chairman’s Message
Come to the M&A Source Conference Middle Market Expo
In addition to the IBBA conference, you should consider attending the M&A Source Conference to not only learn how to do the larger deals, but also use some of the techniques to do a better job of serving main street clients. This will help you stand out as better than your competitors.
Our educational courses are on topics that will build techniques that surprisingly may apply to your deals. Our workshops offer the knowledge of experts in legal, accounting and deal negotiations, but also allow you meet people who have been in the deal making field for many years.
One of the key benefits for our members is forming relationships with representatives of Private Equity Groups, which they tell us is also a benefit to them. Watch the YouTube video to hear what other Private Equity Groups are saying about the M&A Source Conference and Expo.
We typically have anywhere from 40 to 55 PEGs that meet our EBITDA size requirements of slightly below one million dollars and up in which most of our clients reside.
I hope you will attend the IBBA Conference, but also consider coming a few days earlier to benefit from the M&A Source Conference, which as you know is a valuable asset of IBBA.
Kevin Dempsey, CBI, CMC, CMEA,
2013 M&A Source Chairman
Cress V. Diglio, CBI, M&AMI
2013 Education Update
Education is the backbone of the IBBA. The Education Committee is happy to announce many new, much anticipated educational benefits for our membership in 2013. We have been working diligently to enhance IBBA’s learning opportunities; including improving the quality of current courses, creating fresh course material just in time for the Anaheim conference, and ensuring education is delivered in a more effective and accessible manner.
While the IBBA has an existing online learning program that allows members to access courses at their own convenience without incurring the cost of travel, the course offerings are limited. This spring marks the expansion of this program to include course #130 – Accounting Basics for Business Brokers, a prerequisite for CBI-required course #210, in the e-learning format. The Education Committee has further identified several additional courses to be made available online.
Another comprehensive program launching this year exclusively for members is the monthly webinar series. Starting earlier this month and occurring the second Wednesday of each month thereafter, the IBBA will provide hour-long webinars on timely topics to educate and assist business intermediaries in their everyday practice. These webinars will keep members up-to-date on important issues within our industry, enhance skill sets and provide additional knowledge that will increase earning potentials. To find out more about the scheduled webinars, please visit the new webinar webpage.
In addition to these new e-learning events, the IBBA will continue to host a variety of in-person learning opportunities. The annual Spring Conference will be held in Anaheim, California June 11-14 at the Hilton Anaheim. The Education Committee is proud to announce that five new courses will be unveiled at this time! The official schedule and registration will be posted shortly. Also, go ahead and mark your calendars for the Fall Conference to be held in Savannah, Georgia November 18-23 at the Hyatt Regency Savannah. New courses are planned for this conference as well! We encourage you to attend both conferences, enjoy the new courses and gain credits for CBI certification or recertification.
For newcomers to the IBBA who hope to gain our Certified Business Intermediary (CBI) designation, the Spring Summit will be held in Atlanta, Georgia April 14-17. This Summit should be a priority for those working towards achieving the CBI or who wish to sit for the exam in Anaheim. Led by Warren Burkholder, the Summit will offer CBI prerequisite courses including #210 – Analyzing and Recasting Financial Statements, #220 – Introduction to Pricing Small Businesses and #221 – Pricing Small Businesses. This is an extraordinary opportunity to learn in an intimate and engaging classroom setting. Space is limited for this event, so register and reserve a room now.
As you can see, much necessary and enthusing work will occur over this next year and, as Chair, I am honored and privileged to be a part of it. With so many projects going on, the Education Committee is searching for additional volunteer support. These volunteers would serve on our committee and ultimately work on projects like those listed above – new course creation, course updates, online course conversion, etc. Any current IBBA member is encouraged to join by emailing us at [email protected]. If you have any interest in becoming an approved IBBA instructor or subject matter expert, we’d like to hear from you, too! Our organization is based on volunteerism; your help is not only greatly appreciated but also much needed. This is an opportunity to more deeply engage with a worldwide leader in business broker education.
We look forward to seeing you at an upcoming IBBA event in 2013!
Scott Buskie, CBI, M&AMI
Marketing Committee’s Update
The Q4 survey is complete, and we are currently working on analyzing the results; a big THANK YOU to all who took the time to fill it out. We continue to gain traction in the media. Last quarters’ news release was picked up by several media outlets including Forbes.com, which gets a lot of eyeballs on its site every day. Again, my personal goal is the following: by being a member of IBBA, you will get more business, land more deals and have a more sustainable business!
We also put together a tool for the people who participated in the survey. Not only do you get the full report with all the answers broken down into easy to read charts and graphs and a chance to win prizes over $600, but now you also get a “how-to guide” to get the news release in your local paper. The news release is even set up for you to customize it with a spot for your name after a predetermined quote; this way you can be the local expert for your local media. ALL THIS FOR 5-7 MINUTES OF YOUR TIME 4 TIMES A YEAR!
I can share with you that I followed the easy steps in the “how-to guide” and the IBBA news release with my quote was in the premier regional business newspaper. Several people have mentioned the article as I have met with them. This is one way that you can not only help build the brand of the IBBA, but also build your professional brand in your local/regional market.
We have many more exciting things to bring you this year that you will read about in the future months. Stay tuned! Also, if you have any ideas for the survey or marketing in general, please email me at [email protected].
Again, I thank all those who participated in the survey! Look for new ways we will be providing value to you, as an IBBA member—HINT, you won’t want to miss the next IBBA conference!
Steve Wain, CBI, M&AMI
Technology Committee’s Update
Getting Ready for “Tomorrow”
As we progress into 2013, I thought it would be a good idea to start getting you familiar with the new systems we are putting in place. I’m only going to briefly review some of the new features here and leave a detailed review for a later article, and hopefully, a more complete overview at an upcoming conference.
The name of the system that we are implementing is MemberSuiteTM. MemberSuiteTM is a complete professional association management tool that allows both the member and the association manager to more effectively control operations, push information to members, and allow members to manage the crucial parts of their membership.
Additionally, we will be creating brand new websites (both for the IBBA and M&A Source) that will integrate into the MemberSuiteTM database. This will afford you with a gateway to help manage your membership and enhance your practice with our additional marketing, research, and operations tools that will be ‘hooked’ into the web/MemberSuiteTM systems.
So, what will you be seeing? Here are some of the features:
A central view of your membership, including an easy way to renew membership and check out
other members in your area, region, or country
Protect your privacy by either opting in or out of particular messages or groups
- Ability to easily purchase new available products or services offered through the association, including education, seminars, and webinars
- More easily deal with integrated solutions that will be offered by our strategic partners
- Sign up for local and national courses offered by the IBBA or M&A Source
- Keep track of your education, certification, and recertification progress online
- Online access to the new IBBA webinar series – available free to members, a library of webinars
will be established for your review if you weren’t able to participate online
- Seamless integration to member only areas such as the business listing feature. Additional partners will be added to this in the future, and will impact information you may find crucial including comps, mailing lists, marketing campaigns, and more. Because the new websites are being constructed to work with MemberSuiteTM , integration of internally built or partner built systems will be easier to use and hopefully become an improvement to your internal operations.
This is our first step. It has been a long time coming. In 2008, the Technology Committee put together a strategic plan to improve our service delivery to members with the understanding that any system must be efficient so as to offer you, the member, a reason to contribute so long as the collective outcome helped your practice flourish.
The system is to be continually enhanced, as we find ways to help differentiate IBBA and M&A Source members from non-members. And likewise, to help separate those with a CBI and M&AMI versus others who just call themselves business brokers and intermediaries.
As you will see more over time, the system and more specifically, your input into the system, will pay you back far more than both the cost of membership, or the value of your effort to input the necessary data. Making the IBBA member portal a place for you to visit daily is our goal. Our mission is making it valuable to you.
We will be moving over to our new system shortly. When our new websites go live, I will be giving you a preliminary tour so you may begin to see the changes and start using the features available initially at launch. Over the year, more features will be added.
Have a great month!
Marcie Woolworth, CBI, FIBBA
Membership Committee’s Update
Thank you for your continued membership and support, and a big thank you to those who have already paid their 2013 dues! Your Membership Committee has been diligent in making personal contact with members who have yet to pay their dues. We are eager for the new website going live soon, so that we will all be able to enjoy easier and friendlier ways to renew our membership.
Benefits, resources, and discounts are being considered, implemented and will soon be found on the new and much improved website! Since we have essentially started from scratch, our hope is that these benefits, resources and discounts will be very meaningful and useful to each of our members.
The new billing, renewal notifications, and payment options have been implemented by ME, which we hope will benefit the entire membership from here on out. If you have any questions on the renewal process, please feel free to contact ME with your questions. We are excited to have consistency and commitment in maintaining the membership with IBBA.
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].
Here is to a successful 2013! Remember, the secret to success is to never give up!
Bryce DeGroot, CBI, CMEA, CSBA
Wisdom from a Member: Bryce DeGroot
5 Reasons You Should Hire an Intern
I recently brought on a student intern, and I want to encourage other firms to consider doing the same. We brought him through a concise training process, and he is now starting to work on valuable projects and \ continuing to learn on the job.
Here are my five reasons for hiring an intern:
- Training and coaching an intern keeps you sharp.
- The cost is relatively low.
- Giving is better than receiving. An intern may learn more by working over a summer or semester with your firm than they will learn in a semester of school.
- You may receive more than you expect. A star intern can contribute significant value and fresh energy to your firm.
- It can be an excellent recruiting tool if you need to hire for a junior level position. You get to work with the person long enough to confirm whether you made the right pick.
We have an opportunity to serve more than just our clients. An intern contributes to you low-cost labor and the satisfaction of mentoring a young professional, while they receive a wealth of knowledge and experience. That is a win-win deal-something we deal makers should jump all over.
Bryce DeGroot, CBI, CMEA, CSBA
Clyth MacLeod, Lifetime CBI
News and Views
What Business Buyers Really Want to Know
We are indebted to Len Krick, a Certified Business Intermediary in Las Vegas. He is a very experienced professional business broker, and suggests four questions every business buyer should ask – and the business broker answer:
- If this business is so good, how come they’re selling it?
- How much money does it make?
- What’s the upside if I buy it?
- Where the heck did you get that price?
Most probable selling price (MPSP) – Asking price is different to selling price Statistics from the USA show that, on average, business sell for 13.9% below asking price. On every listing that my firm takes, the salesperson provides the owner with a written appraisal of the business based on recent comparable sales and market conditions. We find that the vast majority of businesses sell within 7% either side of the appraisal price. However, sometimes a business will sell at a price that astounds us because it has special appeal to a particular buyer. For that reason, we almost always take businesses to the market at an asking price considerably higher than the appraised figure. This allows for the premium buyer and for negotiation. Deal structure can also affect sale price significantly.
Joe D. Lindsey, CBI, M&AMI
Credentialing Committee’s Update
Call for Volunteers
The Certified Business Intermediary (CBI) is IBBA’s prestigious designation that identifies a dedicated business broker with proven professional excellence through verified experience and education. The Credentialing Committee, consisting of Gary Papay, Stacy Alario, Mike Adhikari, Paul Klinge and myself, has long held the belief that gaining and maintaining the CBI is one of the best things Main Street brokers can do for their career.
As such, it is important that this committee ensures and upholds the high criteria necessary for gaining this designation and maintaining its integrity. Via this newsletter article, we are extending an invitation to current IBBA members who hold the CBI credential to join us as an active participant on this critical committee.
Overall, we devote our efforts to:
- Maintain current certifying, recertifying and reinstatement requirements
- Review and recommend policies and procedures related to certification, recertification and reinstatement
- Review and recommend courses and programs from other professional organizations for consideration for outside education credits for recertification requirements
- Provide overall guidance, support and supervision to the CBI Task Force
- Coordinate with Meeting Expectations (ME) staff for all activities associated with the committee’s function
- Assist ME staff with special situations and requests from members regarding certification, recertification and reinstatement
- Review and recommend candidates for the Fellow of the IBBA award
- Assist with the annual awards ceremony for various IBBA awards and designations
- Report all findings and recommendations to the IBBA Board of Directors
Please submit any questions, requests for more information or offers to volunteer to:
Joe Lindsey, CBI, M&AMI
CBI Credentialing Committee Chair
Education & Certification Manager
Keith McLeod, CBI
From the Editor’s Desk
Do you possess writing skills while putting deals together? If so, please craft an article on our industry and send it to me. The committee will review it for inclusion in one of our monthly newsletters.
As you review this month’s newsletter, you will find it filled with valuable information. Bryce DeGroot shares a reason for his success: 5 reasons you should hire an intern. Think of an intern’s excitement when he/she assists in putting a deal together. One of the expressions I use is, “There are $5 an hour jobs and $50 an hour jobs. Hire someone to do the $5 an hour jobs and concentrate on the $50 an hour jobs. Bryce’s article reinforces this point.
A Company Retreat
We are now deep into February, and now is the time to review your progress on your business New Year Resolutions. As a company owner, you might find it beneficial to launch a company retreat to hold your staff accountable for performance on promises made and to be sure all are working on the same page.
A) Begin your gathering by each giving a positive story; for example, joining your firm, a success at work, the things your company does – give them 10 minutes to record their thoughts and then express them, only positive thoughts allowed. It sets the stage for a successful retreat.
B) Going forward, what do you need to focus on, to build on, and to begin thinking differently? I refer to this as what does it take to grow? I provide the following points:
- You must begin to think differently. It is other things to be done, rather than more of what you’ve been doing. What additional things can we do for our clients? It is thinking outside the box.
- A market assessment is needed. Do you dominate your market? What about entering new markets? I suggest the health market. GNP is the total growth of all our goods and services and 20% is the health market. The health industry is your bank. It is Red Ocean and Blue Ocean: red is the blood taken from your competitors in your existing markets; blue is any new market you enter with your expertise, skills and intellectual property. Being a generalist in manufacturing allows you to grow and thrive.
- Assess your offerings; delete and add new ones, license them, sub-contract them, offer consulting.
- Assess your fee structure; raise it where possible to increase your margin. Emphasize “value instead of cost”, provide fee options based on services provided or speed of delivery. Build in future increases. Offer new services. Your service is about value, not fees.
- Improve your visibility, multiply your message avenues – you should not be a well-kept secret. There are multiple avenues to explore: speaking at conferences, newsletter, start a blog; be edgier, provocative, contrarian to stand out amongst your peers. Be a new secret everyone is talking about.
- Let go to reach out; get rid of old baggage, unproductive listings, eliminate or sell the bottom 10% of your business, examine your margins closely, streamline your operation, get rid of this mental weight. You need emotional and psychological exercises to be fit.
- Target larger listings.
- Create new original thinking in your sweet spot, your special strength in your business arena. This is your I.P. (intellectual properties). It should be applied to new markets. For example if you are handling health services, what about health product manufacturing or distribution? Provide examples of your I.P. in new markets for your team.
- Take prudent risk; if not taking risks, there’s no reward. You can’t play it safe, so be aggressive to attain new business. It is not more of your existing industry offerings, but what can you replace for new avenues for growth.
- Finally, establish a formal referral program for all employees. Referrals are the gold standard of prospect leads in our industry. We don’t spend sufficient time asking for them, seeking them, or building them into our presentations. It should be a part of our everyday existence. It is a testimony that you have done a first rate job, and others contemplate working with you. It is the cheapest and most effective way to get new business. Unfortunately referrals don’t just occur; a planning and a disciplined approach are necessary. Referrals benefit three people: the individual contacted, the one giving the referral and you. It is a win, win and win scenario. Make it a habit with current clients, former clients and prospects.
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Independence, OH – October 2, 2020 – The International Business Brokers Association (IBBA), the world’s largest not for profit association for the business brokerage industry, is pleased to announce the formation of its first domestic Chapter, IBBA Mid-America, with a primary service region of Missouri, Arkansas, Kansas, Kentucky, Oklahoma and Iowa. Going forward, IBBA members […]