-Businesses Looking to Cash Out Sometimes Need to Step in With a Loan as Credit Crunch Continues to Stymie DealsREAD THIS ARTICLE

-Business Due Diligence Process - Article and Two Checklists READ THIS ARTICLE

-"Difficult People, Difficult Situations. . . Demand Someone Like YOU!"(Scroll down)

How to find the right business broker for you

When Trisha and Larry Scheffler decided to sell their small manufacturing company in Jasper, Ga. -- one they had founded 10 years before -- their first instinct was to sell it themselves. Why pay a hefty commission to a business broker? "Things didn't go well," Trisha said. "We didn't know what steps to take or when to take them. When were we supposed to show a prospective buyer our financials? Who was really serious about buying our business, and who was a competitor [trolling for information] to use against us?"

The Schefflers eventually hired a business broker, (Kathryne Pusch of ConsultKAP, Inc.) selling their 15-employee company to a larger competitor. Trisha said she believed they made more money that way than they would have flying solo. "Even more than that, selling a business is a very stressful process," she said. "A business is like a member of your family. You want it to grow and thrive. It was good just to have someone to answer our questions."

Increasingly, business owners are selling their business through a broker, a formal middleman who did not exist in Atlanta until roughly a quarter-century ago. Previously, someone selling a business had only his attorney, accountant or banker to call on for advice, not that this doesn't suffice still for many owners. READ THIS ARTICLE

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Georgia still among fastest growing states

Atlanta Business Chronicle

Alex Volpe was returning to the corporate world and a demanding new job at Georgia-Pacific.

For the couple, that meant one thing: they’d have to sell the family business, which required time they no longer had. READ the Rest of this ARTICLE

Like many, the client company was having a real crisis. Its CEO was witnessing many friends and colleagues filing for bankruptcy. Her banker, CPA, and attorney told her to close her doors. Over 50% of the companies in her industry have gone out of business since 2002, and her company faced a variety of problems across the board:

Losing key customers. Facing tight cash flow. Low employee morale. Inconsistent productivity. Increasing customer demands. Competition from low labor rate countries. Rising raw material prices.

Seemingly attacked from all sides, a determined CEO was seriously considering closing down after 40 years in business—but she decided to fight back!

How our Strategic Partner, Cycle of Success Institute, stepped in to change the course of the future for this company and several others in these REAL LIFE CASE STUDIES. READ the rest of this ARTICLE

Steve Marsden of Alpharetta, GA had a dream for his family. He wanted to build a Marsden Family Portfolio of small businesses and create an entrepreneurial legacy. He imagined his “boys” working together productively, being their own bosses, sharing their passions for business, and supporting their families, long after he was gone. When Steve first met Kathryne Pusch, of ConsultKAP, Inc. Business Brokers in late 2002, he was in transition out of his long time corporate career with IBM. Steve heard Kathryne speak on the topic “So, You Think You Want to Buy a Business?” at an entrepreneurial seminar, and he said “Yes, I Do.”

Steve and Kathryne forged a collaborative relationship during which Kathryne came to understand his business and personal goals for his family. Steve has five adult children, including 4 sons that he believed could run small businesses with his overall strategic and financial assistance. Kathryne needs to understand Steve and his sons’ geographic and financial parameters as well as their skills, experience, strengths and weaknesses to best match them with businesses in which they will most likely succeed. Initially, Steve bought a Brusters Ice Cream franchise, thinking the systematized business procedures and franchisor support would minimize his risk as a first time business owner. He had each of his sons, Stephen, Tom, David, and Chris spend some time in the operation to gain some hands-on small business experience.

In late 2004, Kathryne listed a corporate embroidery business in Forsyth County. The owner was retiring and the business needed an energetic new owner to work with and build the corporate customer base. After showing the business to four buyer prospects, Kathryne had two offers for the seller. Among the best prospects that Kathryne matched up in developing her marketing plan for the business was Steve and his family. In particular, the youngest son, Chris, seemed ideal for this business. Steve was well aware of the market for clothing customized with corporate names and logos from his many years in the corporate world. The business was small enough to acquire with personal funds and seller financing, which the seller had agreed to consider for the right buyer. Chris, only 25 years old at the time, and the seller of Advanced Embroidery hit it off immediately, and Kathryne struck a deal for the parties. With Dad’s guidance and support, and friendly mentoring from the seller, Chris and David have grown the business more than 70%, including a 24% increase in 2008 Revenue YTD over 2007.

But wait, this entrepreneurial success story is far from over. . . In late summer 2004, Kathryne was contacted by Charlie Kaplan, the owner of a custom window covering business, specializing in the very popular high end treatment, plantation shutters. Charlie was thinking about selling his business, Shutter Installation and Supply Company in Forsyth County. He loved sales and customer interaction, but did not enjoy the management and administration a business requires. After a thorough analysis of the business financials and operations, Kathryne counseled Charlie that it was not the ideal time to sell the business. Results indicated that the business lacked sufficient personnel and systems infrastructure to allow for a smooth transition to a willing buyer. If he could make some recommended improvements, his business would sell more quickly and for a better price. Kathryne and Charlie resolved to continue their dialogue as he developed the business, fine-tuning it in preparation for eventual sale.

Fast forward to late 2007 -- Charlie, who has taken on a financial partner whose business skills have had a positive impact on the shutter distribution business, tells Kathryne that he wants to meet to discuss the possible sale of the profitable going concern. Kathryne listens to what has been happening at the business in terms of staffing and systems, and requests copies of financial statements and tax returns. The news is good for the owners. This business is very saleable and should be attractive to a number of buyers. ConsultKAP lists the business, develops the marketing prospectus and begins to actively sell the business. As a conscientious business broker, Kathryne uses all resources at her disposal to achieve her clients’ goals. A long-time member of the Georgia Association of Business Brokers, Kathryne knows the value of local and national networks, which allows her to immediately offer her listings for co-brokering amongst other professional brokers. A big part of her marketing plan is always to contact buyer prospects in her own data base and network data base whose criteria match any particular business. She has already mentioned to Charlie that she has in mind the Marsden family.

The business received a tremendous marketing response from ConsultKAP’s advertising, with 15 qualified inquiries in the first two days. Kathryne felt strongly that Steve and his sons would be ideal for this opportunity, so she sent him the business summary and a confidentiality agreement. Steve agreed the deal looked promising, and after reviewing the full business offering prospectus, he met with the sellers and Kathryne to advance the process. The Marsden’s was one of two full price offers submitted on the business. It generally takes buyers 6-8 weeks to close on a business deal, as there are many tasks to be undertaken after the principals have signed a Purchase & Sale Contract and before a closing. The Marsdens worked with their small business CPA, who co-ordinated with Kathryne on her due diligence requirements. The sellers’ CPA also co-ordinated with Kathryne in providing the required items. The buyers needed to obtain required Federal, state, and local tax ID’s and licenses, finalize financing and insurance and transfer certain vendor agreements and a premise lease for the business to operate seamlessly after the sale. Kathryne assisted by providing a list of referrals as needed for all professional advisors, financial, administrative, and government agency contacts, and working with the principals’ advisors and the landlord. The sellers had questions about transition practices, handling personnel inquiries, managing inventory and accounts documentation. Their broker was there with answers, to ensure the transaction stayed on track, manage the stress all parties naturally feel, and keep open the lines of communication between the many players in the deal.

Under Georgia law, a person cannot represent, solicit, or negotiate with/for a buyer or a seller for a fee in the purchase or sale of a business that has a lease or other real property to transfer unless he or she is a Georgia-licensed real estate broker. Proper licensing is a requirement for membership in the GA Association of Business Brokers. Buyers, sellers, and their professional advisors can rest assured that they are dealing with a licensed professional. As a complex legal transaction, a business sale should also include at least one attorney. An attorney is required under Georgia law to conduct a Real Estate closing. In the case of both Marsden deals done with Kathryne and ConsultKAP, Helen Stahel acted as the closing attorney for the transactions. In this role, Helen checked for liens and lawsuits, drafted all closing documents, and co-ordinated on requested changes with both Principals’ attorneys. She conducted the closing and filed required security liens. GABB affiliate members include a wide range of professionals who support business transactions. Member Brokers always have a list of lenders, CPA’s, attorneys, due diligence support, business coaches and other experts in whom they have confidence to whom the Broker can refer buyers and sellers.

Today, after a productive transition with the sellers, Stephen and Tom Marsden are running SISCO, the latest addition to the Marsden Family Portfolio. Both young men have left their corporate jobs for the small business ownership endeavor. As we all know, the years 2008/2009 thus far are a challenge for businesses everywhere, but with proud Dad Steve offering some occasional sage advice, the Marsden team is building a legacy they hope will carry on to their children and further bond this large, strong family. Kathryne says “That’s why I do this! I love to facilitate that next big adventure in people’s lives.” Just another job well done for an accomplished business broker, a happy ending for a seller and a happy beginning for a buyer.

Advanced Embroidery Closing. Pictured Left to Right, Gary Roy( Seller), Chris Marsden, Steve Marsden (Buyer)

Shutter Installation & Supply Company Closing. Pictured Left to Right, Tie-Dye Marsden Family Summer 2008

Who do business leaders really trust?

What creates trust? Research indicates that people look for three essential things: ability, benevolence and integrity. In our research, we examined the relationship between support-seeking behaviour and these traits by studying the support networks of 50 senior executives at a Fortune 50 technology firm and developed eight profiles of executives' contacts. We then looked at how the senior executives looked to these profiled groups in different ways and divided forms of support into four categories: raw information, actionable advice, strategic or political help, and emotional support. We discovered that the leaders rely on different types of trust, depending on the kind of support they want.

To elaborate, the four groups of support entail:

* First, raw information involves facts and figures like budgetary numbers, meeting dates, competitors' activities or inventory levels. It's the most explicit form of assistance and one of the easiest to obtain through technological means.

* Second, actionable advice means recommendations or suggestions aimed at accomplishing something. This type of advice has low emotional demands, but can be intellectually complex. It involves not just data but also draws on a person's experience.

* Third, emotional support involves someone wanting help in working through difficult issues.

* And, finally, strategic or political help is the most complicated, and requires high emotional and intellectual demands.

How do you best enlist support? When do you decide to try to diffuse tension among colleagues? Strategic help gets into questions of this nature.

We broke down the executives' network contact profiles into eight categories. "Harsh Truthtellers" are honest, regardless of whether the truth is painful. "Moral Compasses" have an unwavering sense of right and wrong. "Loyal Supporters" align their values closely with those who are seeking support. They are sympathetic, even if not experts in the relevant material. "Star Players" are experts in their fields, but not necessarily empathic. "Average Joes" have moderate levels of ability, benevolence and integrity. "Dealmakers" get things done. They want to help and can, but sometimes handle issues in ways that clash with the support seeker's values. "Cheerleaders" provide unconditional support, but may not be the most capable colleagues. "Trustworthy Partners" are capable, display high integrity and have the support-seeker's best interests at heart.

We gathered data from 50 of a Fortune 50 organization's leaders -- vice presidents, directors, general managers and other executives -- who were part of a senior leadership development program. Those surveyed reported on 661 contacts who they trusted enough to go to for personal support.

Those studied preferred Trustworthy Partners 86% of the time when they were looking for actionable advice and 57% of the time when looking for strategic or political help. They also looked often to the Harsh Truthtellers, despite the fact that people in this category display little benevolence. The executives looked to the Harsh Truthtellers 73% of the time when looking for actionable advice and 45% of the time when looking for strategic or political help. Those involved in the survey next turned to the Loyal Supporters and Moral Compasses for these types of support.

When the executives were looking for emotional support, they sought out those who displayed integrity and benevolence - and were less concerned with seeking out those who were most skilled. This meant that they turned to Loyal Supporters 78% of the time. And when the executives were looking for raw information, they looked to the Average Joes most often -- again, 78% of the time.

Finally, it seems that high integrity is what support-seekers look for in their networks. When executives perceived that someone among their support group had high integrity, they would go to that person for support that had to do with either intellectual or emotional concerns.

Also of note: While executives sought Trustworthy Partners and Harsh Truthtellers most often, and then looked to Loyal Supporters and Moral Compasses, they didn't generally turn to Star Players. Ability, it seems, is not enough. Further, executives almost never turned to Dealmakers or Cheerleaders, probably because they don't display as much integrity.

This article is adapted from "Profiles of Trust: Who to Turn to, and for What," by Cathleen McGrath and Deone Zell, which appeared in the Winter 2009 issue of MIT Sloan Management Review. The complete article is available here.

Women small businesses owners will be able to use a new online training course to learn how to identify and take advantage of federal contracting opportunities.

The course being offered by the Small Business Administration is part of a government-wide initiative to promote opportunities for women-owned businesses in the area of government contracting.

SBA noted in a news release that it is committed to ensuring that women-owned businesses receive at least 5 percent of federal contracts.

“Federal contracts can provide unique opportunities for women entrepreneurs and small business owners to grow their businesses and create jobs, particularly during these tough economic times,” SBA Administrator Karen Mills said in a news release.

The course, which is designed to help women entrepreneurs learn about the federal procurement process and to prepare them to compete for contracting opportunities can be accessed at http://www.sba.gov/fedcontractingtraining/

Businesses Looking to Cash Out Sometimes Need to Step in With a Loan as Credit Crunch Continues to Stymie Deals

By ARDEN DALE and SIMONA COVEL

Wall Street Journal

November 13, 2008

For small companies looking to cash out, this may be an ideal time -- if they are willing to give sellers a financial hand.

The reason is that fewer businesses are on the block these days as owners fret over the ability to live off their proceeds during the economic and market downturn. A smaller supply of sellers means those companies that show stability, profits and steady cash flow can command a premium price.

But there's a catch: Buyers are generally finding greater difficulty getting commercial loans from banks. Loans backed by the Small Business Administration have dropped off precipitously in recent months. Even private equity firms -- long known for taking a chance on scrappy young companies with high growth potential -- are acting more conservative.

Christina and David Sloan, former co-owners of Li'l Guy Foods, at the company's production facility

The upshot is that some businesses are finding they also need to provide some of the financing themselves in order to get a deal done.

Seller financing "is almost a mandatory piece of the deal," says Domenic Rinaldi, owner and managing partner of Chicagoland Sunbelt, a Chicago-based broker that helps people buy and sell businesses. "When we bring deals to the banks, they want to know that the seller will be in for some portion."

READ THE REST OF THIS ARTICLE

(ARA) - Aaaah. Life without a boss or the fear of firings or layoffs. A life in which you are free to think outside the box and direct your own employment destiny. A familiar dream, right? But how many of us, when talking about our dream of self-employment, begin our sentences with, "If only I had the money, I would?"

Well, now there's a way you can get your hands on the money that will allow you to live out your dream of business ownership. And the amazing thing is -- you probably already have that money in your own possession.

Do you have an IRA, 401(k), Keogh or other retirement plan? If so, you're sitting on a potential goldmine, because those funds can be used right now before retirement age to either buy a business outright or to leverage a loan that will let you secure the enterprise of your dreams. And you can tap into those funds without incurring additional taxes or early withdrawal penalties.

By using a structure similar to that of a self-directed IRA, your purchase of a business or franchise is considered by the IRS and Department of Labor (DOL) as an investment into your business made on behalf of your retirement account. Under this structure, your business profits are realized tax-deferred inside your retirement account or are reinvested back into your business. It's an ideal way to launch your business with lower overhead while building up your retirement account.

Don't have enough money in your retirement account to purchase the whole kit and caboodle? Then use what you do have to secure a good loan and reduce your overall debt.

The more you can put into a down payment for an SBA or other loan, the more favorably the lending institution will look on your request. As a general rule, borrowers will need 20 percent or more down, regardless of whether they're buying a new business or an existing one.

The same account structure that allows for IRA monies to be used as loan leverage also allows for multiparty purchases. So you're free to combine your IRA money with the retirement funds of a spouse or partner.

Low- and no-debt financing strategies require careful structuring of various accounts and entities, so they're not for the do-it-yourselfer. Fortunately, specialized financial services companies set up these types of accounts, so you don't have to. By combining your retirement account money or your home's appreciated value with your entrepreneurial zeal, you may discover the perfect recipe for business success!

The Seller Finance Solution

Seller financing can be a great way to get a business sold without slashing the price. Some sellers are hesitant because they need a large lump sum of cash VS installment payments. . . read on to learn more about how to accommodate this common need.

By recognizing the millions of people who can't get traditional financing as potential buyers, resourceful sellers (and their agents) can minimize their time investment in getting a property sold. Even better, sellers who offer financing can usually get a higher asking price for their property, even in the slowest markets. Clearly this is a win-win situation.

Most sellers never consider financing the buyer directly because they are not aware of the benefits or don't fully understand how creating a note works, and what can be done if the installments will just not work for them. Let's take a closer look at the advantages of owner/seller financing, as well as the option to sell that note. READ THE REST OF THIS ARTICLE

Tax Advice from a Former IRS Auditor

Small businesses face a relatively higher risk of audits than individuals. Here are some pitfalls to avoid to make sure your returns are accurate

By John Tozzi

Everyone wants to maximize their tax deductions and reduce what they owe the government. But remember: If you report income as a small business owner, you face a higher risk of getting audited than individuals with just payroll or investment income. That's because it's much easier for small business owners to understate their income or overstate their write-offs than it is for individual employees, who have their wages reported by their employer. Indeed, the IRS devotes the greatest share of its enforcement budget—41 percent in 2006—toward small businesses. The agency in recent years has tried to increase compliance through education and enforcement. The Schedule C, which sole proprietors use to report income, is the single most audited business form, says Jeff Collins, a tax attorney and former IRS auditor in Schaumburg, Ill.

Small business owners can save themselves grief by avoiding common tax slip-ups. One big trap some fall into: failing to pay payroll taxes. These contributions, which include the employer's half of Social Security and Medicare taxes, are due monthly, but business owners with cash-flow problems sometimes fail to pay them because they need to cover other fixed costs like wages and rent first, says Collins. Companies can avoid that temptation by hiring a payroll service to make the tax contributions along with each payday.

Independent Contractors

Some small business owners try to avoid payroll taxes entirely by classifying workers as independent contractors. That's legitimate if workers truly are independent—the distinction has less to do with the hours they work than it does with the degree of control the business owner has over them. Misclassifying workers can come back to bite businesses if the IRS determines the company should have been withholding taxes and contributing the employer's share of payroll taxes. "If you have a payroll of $100,000 and you did that, well now you've got a $15,000 bill," Collins says.

Businesses that pay workers and vendors in cash are also at risk in an audit. If a company doesn't have a paper trail to back up those costs, the deductions will be lost. Collins says this is often an issue among first-generation immigrant business owners or those who pay undocumented workers with cash. Such practices can put employees at risk as well. "If those expenses are deducted and you can't show documentation, you also jeopardize the employees. Then they become subject to the willful failure to file taxes," Collins says. Those who don't have records might be tempted to tell an auditor that they were lost in a flood or fire. But Collins says in that case, they should be prepared to produce an insurance claim—otherwise the auditor has no evidence to show that there was any damage to records.

But even though small businesses face a relatively higher risk of tax audits, Collins says business owners shouldn't worry—as long as their tax returns accurately reflect their business records, and their deductions are reasonable. And businesses shouldn't be afraid to take a legitimate deduction for fear of explaining it to an auditor. "Who cares if it's a red flag?" says Collins. "Bring the audit on."

Tozzi covers small business for BusinessWeek.com.

In the News . . . .

One of the questions I get most is should a buyer form an LLC or an S-Corporation?

Most of the time people form an LLC without getting adequate legal and tax advice because someone told them “ that is the best way to do it. “

There is no standard answer to this question. Each individual situation should be analyzed for the best choice of entity. A buyer should always seek legal counsel regarding liability and business reasons for the choice of entity.

Here are a few of the main differences between the two in layman’s language. READ THE REST OF THIS ARTICLE

Article courtesy our Strategic Partner, Greg DeFoor
In the News . . .

Cash-Out Now or §1031 Exchange:

A Look at the Potential Effects of Higher Capital Gain Rates on the Effectiveness of a §1031 Exchange

With the Change Administration set to take the Executive Stage this month, the eyes of investors and their trusted advisors have focused on what effects the incoming president will have on the tax codes that so many have benefited from in the past and the rates of which determine the impact of those codes.

As a core business market, Blue Oak has heard many investors and tax professionals say that since it is clear that the Obama administration intends on increasing the capital gains rates, now is the time to sell investment real estate, elect not to do a §1031 tax-deferred exchange and “cash-out” while rates are low. But is that the right choice? . . . . . . READ THE REST OF THIS ARTICLE

contributed by Jim West, Vice President of Dynasty Capital Advisors (Article Courtesy our Affiliate)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The stock market is crashing. Government bailouts are rampant. The political climate
is uncertain. Credit has all but disappeared for ready buyers if you can even find
one. Yet, your dreams of retirement remain. What can you do? There is an answer
that you may have overlooked. By understanding the power of an ESOP you could be
well on your way to your retirement in the next 90 days. READ THE REST OF THIS ARTICLE

For more information about how an ESOP could be the solution to your exit strategy,
e-mail us today. We will facilitate initial information collection and put you in touch with our ESOP specialists.

Friday, October 5, 2007 Surprise. . . this business is Yours. (An ESOP Case Story)

Atlanta Business Chronicle - by Justin Rubner, Staff Writer

Nearing retirement, 68-year-old entrepreneur John Farra had a decision to make about
his Norcross-based printing supply company. Sell the quiet, but lucrative, small
business empire he had created -- or hatch a surprise twist for what might have
been an unassuming legacy.

On Aug. 22, Farra, CEO of Laser Supply & Service Inc., treated his 13 employees
to dinner and delivered the big news -- he was retiring. Furthermore, he said, the
company no longer belonged to him. Visions of layoffs filled the room.

Instead, he explained, the company had been sold and now belonged to new owners.

It belongs to you, he told his workers.

READ THE REST OF THIS ARTICLE

Training & Business Development: Slippage & Real Estate

RISMEDIA, July 18, 2007 —I read a lot of Stephen King. Many of his stories involve people crossing some invisible boundary lines into the realm of evil. King uses a term “slippage” to describe the events, behavior, and conditions surrounding a gradual, sometimes nearly imperceptible (except in retrospect) decline or crossing over to the “dark side.” As you read the story, you start to get “the creeps,” the feeling that something wicked this way comes. I think slippage also applies to our integrity in our business dealings as well.

We have certainly seen a great deal of slippage in our world in recent years. The business world is tough and extremely competitive these days. Some people might be feeling that it would be easy to lower their own standards of honesty and ethics, and rationalize that they are still “better” than a lot of other people we have read about and seen on the daily TV news. Allowing yourself to be weak in your own values may allow others to misguide you into behavior that will later strike you as very poor judgment. One poor decision has a way of leading to more bad decisions, often to cover up the first one. This creeping decline in values is slippage, and is accompanied by denial which allows people to convince themselves it is OK to behave this way.

In fact, it is not possible to keep your positive self image and integrity while lowering your own standards to the level of mediocrity or even worse. The late Dr. Norman Vincent Peale was a prolific writer and a wise man. He had a “test” for integrity. When evaluating any given situation and choices for behavior, he suggests that we ask ourselves:

Being dishonest saps energy, adds to the “bad stress” in our lives, and damages personal and professional relationships. In our business, you could be at risk for loss of license, fines, or legal sanctions. Who needs that? If you or someone close to you seems to be succumbing to slippage, take action (before you wind up in a Stephen King story.)

q Live up to your commitments, taking responsibility for your own actions and expecting others to do the same

q Communicate truthfully and clearly, without casting aspersions or shifting blame

NAR surveys confirm that your prospective clients are looking for Brokers and Agents that demonstrate honesty and integrity, so you will see your business blossom and referrals increase. As a bonus, you will feel good about yourself and be healthier, happier, and more confident! You deserve it.

About the Author:
Kathryne Anne Pusch is president & broker of ConsultKAP, Inc. She is a Licensed RE Instructor in

Georgia

You can contact Kathryne at kap@consultkap.com.

Did you know that Entrepreneurs can use a trust to operate their business which will enable them to NOT pay ANY taxes?

Did you know that Entrepreneurs can use a trust to operate their business which will allow them to bypass virtually ALL gift and estate taxes?

Do you know that Entrepreneurs can use a trust to operate their business which will shield their assets from ALL cr edit ors and judgments?

Did you also know that Entrepreneurs can wear a pair of red slippers, click their hills together three times and have their wishes come true?

Being able to operate a business without paying ANY income related taxes, without paying ANY gift or estate transfer taxes and without having ANY asset exposure is --- Pure Fantasy. READ THE REST OF THIS ARTICLE

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"Difficult People, Difficult Situations. . . Demand Someone Like YOU!"
By Kathryne Anne Pusch- BBN Affiliate, Atlanta, Georgia

If selling businesses were easy, everyone would be doing it, right? The turnover in the industry alone is a sufficient indicator of the difficulty of succeeding in business brokerage. Business brokers specialize in dealing with complicated, often difficult situations, and with the people embroiled in those complex situations. Who could blame these people for sometimes seeming “difficult?” That’s why YOU are needed! This is a demanding profession that requires you to be on your toes every day. Who knows how many deal crises could be resolved if YOU were willing and able to do a bit of crisis management with your broker’s tool kit.

So, what does it take to be ready for effectively dealing with difficult people & difficult situations?

Ø   You need to be well (and continually) educated to keep abreast of all the available financial, marketing, and analytical tools, techniques and resources. Take advantage of any opportunities available to you to improve your knowledge base and skill set. BBN has educational classes and conferences, of course. There is continuing ed available thru traditional educational institutions, as well as professional associations. Your ongoing education should include “free” opportunities such regularly scheduled local or regional business or community meetings. Do not discount the everyday opportunities to learn from your peers, your Broker, a mentor, other BBN Members (who are always ready to freely share their wisdom), and even your clients and their advisors. And read! There are books on everything from understanding financial statements to surviving self-employment.

Ø   You need to be creative in your thinking, so that you can flexibly adapt to the diverse situations and individuals presented to you each day. Do not be stuck in “one way, my way” thinking. It will not get you much farther than your own bathroom each morning.

Ø   You need to be patient with potential clients, with sellers, with buyers, with lenders, with other brokers. Then you need to be patient some more. And when you think you have been as patient as you can be, be patient a bit more.

Ø   While you are being patient, you must be listening. While you are listening, you must be really hearing what that person is trying to tell you, even if they are having some difficulty expressing it in words. Call on your empathic skills.

Ø   And while you are being patient, and listening, hopefully you are using your time wisely. Are you sitting still, appearing to listen, but feeling agitated and aggravated, and impatient on the inside? Are you just waiting to tell the other person what you think. Stop that! You are capable of not reacting. Just listen and focus on what is being said.

Ø   If you are a global thinker, or multi-tasking, as many business brokers are, you are capable of processing, and thinking of alternative solutions during that patient listening period. If you are a linear thinker, and a single task focus person, you may need to take some time to process what you have heard. If you are not willing to avoid that instant reaction response and focus on the resolution, you are cheating yourself and your clients.

Many people, even the “ultimate” brokers, have trouble dealing with people who are upset or angry. Unfortunately, business deals are just full of opportunities for people to get upset or angry! There are specific activities that you can practice to deal with these situations. This process may not feel natural at first, but think of it as a new tool that will fit comfortably in your broker tool kit after you have practiced using it. You can do it, and it is worth the practice:

1.       Listen actively for specific words & phrases used by the upset person to express themselves. Do not react, defend, or judge. Be patient & listen.

2.       Repeat back to the person what you heard them say, starting with words like, “So, you are saying that..” and then repeating what the person said using their words and phrases. They will now know that you were actually listening to them, and that you understand their problem. This goes a long way towards calming the person. A state of calm will make them easier to effectively deal with because it greatly increases the likelihood that they will listen to you.

3.       Focus on a resolution. You have now communicated that you heard and understand the issues. You do not need to tell them that you think they are wrong to solve the problem. If you want to resolve this productively, resist your prideful urge to disagree and agitate the person you have just calmed.

4.       When you think you know what will make this person “happy” in terms of their dissatisfaction, state it for them in a simple and positive way. What do they need? Do not go on until you have agreement as to what the problems or issues are.

5.       Your training, education, and flexibility will now allow you to outline some corrective actions to address the issues. There may be immediate actions, near term actions, and long-term actions required. After all, we are often dealing with complex situations. State clearly and positively, what you are prepared to do to resolve the issues and help the angry or upset person.

6.       Wait patiently for a response. Hopefully, this will be positive. You have “saved the day,” and converted a potential detractor to another loyal fan. If it is not positive, you have a decision to make. Do you want to continue this exercise, trying to pacify this person? Or do you draw the line? If your intelligence, experience, and discretion tell you that your time and resources are better spent elsewhere, make your last offer of remedy, and be prepared to act accordingly.

Good job! Hopefully, leading to a good deal. If it doesn’t work this time, it will the next. Just be patient and use every tool you have in your ever-expanding Broker’s Tool Kit.

Kathryne Anne Pusch
BBN Atlanta, GA
President, ConsultKAP, Inc.
kap@consultkap.com
770-918-9390

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ANSWERS from the Experts!!

Question: Can I sell a business NAME as opposed to assets? Hi, I own a tour company. The customer comes to me via Internet ads, print ads, brochure racks. We will do about 380,000.00 gross and $150,000 net this year, and have for several years. My situation is unique. I run tours on a piece of property, it's privately owned and we are losing the lease. Don't want to stay in business, but we know the phone will continue ringing, so were wondering: If someone wanted to get in the same tour business we're in, and had some property on which to do the tours, would selling my company, which is really just a name and good will, referral and repeat business and new business , be of interest to him, and how to arrive at a price/value?

Answer #1: The business NAME is, in fact, one of the many intangible assets that someone buys when they buy a business. A large part of the business goodwill is vested in the name, as this is how customers identify the company providing them with goods and services that the business provides. Many businesses have little, or virtually no, tangible assets, so the greatest portion of the business value is attributable to the goodwill, a large portion of which IS the business name, along with the customer and vendor lists.

You could sell just the business name, but most buyers would also want the customer and vendor lists, unless you are planning to license your name or set up franchises. It sounds to me like the specific location is not relevant, so long as it is close enough to be the your market area.. The value will be dependent upon what the name can bring to a buyer in terms of revenue and profits. I am unsure if you are saying that the PIECE of property is, in fact, the ATTRACTION site. If so, it will really not be the same business if you lose the attraction, so this will heavily impact the perceived value to any buyer.

Kathryne Pusch
BBN Atlanta, ConsultKAP, Inc.
kap@consultkap.com

It seems like it would be easy to find a tax-friendly place to while away your golden years. Nine states don't have an income tax. Five don't levy any sales tax. By this measure, a perfect state to retire to is Alaska , since it falls into both groups. There's just that minor issue of the weather.

Think a little snow -- OK, maybe a lot -- is a fair trade to avoid state taxation? Don't pack your parka just yet. Alaska isn't totally tax-free.

Some Alaskan municipalities do charge local sales taxes. Some cities and boroughs (roughly equivalent to counties) also collect property taxes, although the first $150,000 of assessed value is exempt if it's owned by residents 65 or older. And for the time being, the state still has an estate tax, something to think about if you're worried about what you'll leave the grandkids.

The Land of the Midnight Sun is a prime example of the complexities you could face when looking for a domestic retirement spot on the basis of tax considerations. You've got to sort through 50 states and the District of Columbia , each with its own set of tax rules, not to mention the assortment of local taxing jurisdictions they contain.

Even then, if you simply use tax rates as the overriding factor in deciding where in the United States to retire, you could make a big mistake.

Rex Barker here again with “Suggestions for Success”

1) Marry the right person. This one decision will determine 90 of your happiness or misery.

2) Work at something you enjoy, that’s worthy of your time and talent.

3) Give people more than they expect and do it cheerfully.

4) Become the most positive and enthusiastic person you know.

5) Be forgiving of yourself and others.

6) Be generous.

7) Have a grateful heart.

8) Persistence, persistence, persistence.

9) Discipline yourself to save money on even the most modest salary.

10) Treat everyone you meet like you want to be treated.

11) Commit yourself to constant improvement.

12) Commit yourself to quality.

13) Understand that happiness is not based on possessions, power, or prestige, but on relationships with people you love and respect.

14) Be loyal.

15) Be honest.

16) Be a self-starter.

17)Be decisive even if it means you'll sometimes be wrong.

18) Stop blaming others. Take responsibility for every area of your life.

19) Be bold and courageous. When you look back on your life, you'll regret the things you didn't do more than the ones you did.

20) Take good care of those you love.

This is Rex Barker C.S. (Continuing to Strive for success) saying last, but not least…Don't do anything that wouldn't make your mom proud!

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