Best Business Description Ever?

Here’s a quick FAQ to provide a heads up to potential business buyers and sellers.

When looking at the current listings being marketed by the brokerage firms you are considering be wary of excessive superlatives. If every other listings sounds like the best business ever you might want to turn your “BS” meter on.

Do the listing titles include words like “Perfect”, “Stunning”, “Unbelievable”, “Booming”, “Thriving”, “Amazing”, “Awesome”, “Incredible” and my favorite “Recession Proof”?

Sometimes one of these is appropriate, but if you see these superlatives being over used you should be extra cautious when reviewing financials and other materials produced by the broker.

If the business broker and seller are willing to exaggerate the first information viewed by potential buyers there is a good chance that other important information has been exaggerated as well – potentially having a material impact on the true value of the business.

The best business description ever is one that accurately presents the information about the company for sale to prospective buyers. No business is perfect. It’s important that the business description be accurate and provide enough detail to attract prospective buyers.

December 28th, 2012|

Newbie Business Brokers?

Have you seen some of the new “business broker” websites popping up? It appears there are a new crop of individuals calling themselves business brokers out there. You can identify them by the lack of listings. Some don’t even have a real contact person’s information.

People come in and out of industries all the time, but what scares us is the lack of training and experience we’re seeing and individuals claiming they are “experts” in areas that they aren’t and connected and networked in industries that they are not.

Why so many so quickly? We suppose it’s because many people have been professionally displaced and see business brokerage as an easy way to make a quick buck. (We assure you it isn’t) and that is proven by the generally accepted stat that ~80% new business brokers start with little or no training and ~50% of business brokers wash out in the first 12 months and ~80% of newbie business brokers never make it to year three! (Source: franchised and independent business brokerage / merger and acquisition practices and industry associations.) This combined with less successful offices reaching further and further to stay in business.

You don’t want your business brokerage firm […]

December 28th, 2012|

I received a letter from a broker claiming “I have buyers for your business”. Is this for real?

It’s very unlikely. This is a trick used by brokers trolling for new listings. Everyone gets the same letter and they wait to see who bites.

Most times the broker has a generic buyer that they use liberally as being interested then mass mail to hundreds if not thousands of business owners without regard to location, industry or price point. They are buying a list and rolling the dice.

Those that respond are asked to sign an exclusive representation agreement. When the ‘buyer’ doesn’t work out they have you committed to a 12 month exclusive agreement.

If they really had a legitimate buyer for your business wouldn’t you expect them to call you directly and set up a meeting? After all we”re talking about a transaction of hundreds of thousands if not millions of dollars.

I love to call back and ask “What industry is the client you wrote me about interested in?” I’ve never once had a broker be able to answer this question because they don”t really have a buyer. They flounder around with “lots of buyers”, etc. etc. They are always embarrassed when they realize they don”t even manage their direct mail list well enough to remove “ENLIGN BUSINESS BROKERS”!

ENLIGN has […]

October 29th, 2012|