How to gain and keep customers, and other advice from a Selling Expert
Christopher Lemley, the director of the Georgia State University Professional Selling and Sales Leadership Program
For business brokers or other solo professionals, the most valuable resource is your time.
Outsource, outsource, outsource, was the recommendation of Christopher Lemley, the director of the Georgia State University Professional Selling and Sales Leadership Program, who spoke on Tuesday, Jan. 26, to the Georgia Association of Business Brokers.
Gaining and keeping customers was the topic of Lemley’s presention, which also covered the tension between sales and marketing and social media. Lemley opened by citing Peter Drucker, founder of modern marketing: “There is only one valid definition of business purpose – to create a customer. Companies are not in business to make things … but to make customers.”
Things tend to be relatively easy to sell, Lemley said. “Services are a bit more difficult to sell, as most of you know.”
The reason services are more difficult to sell is that “we are all in competition with each other, but at a high enough level, in firms we have all worked with one another and have somewhat the same background” he said As such it is hard for potential customers to see what differentiates one service firm from another.”
So how can you market commoditized services and get customers to stay with you over time? You must overcome four things: intangibility, perishability, inseparability, and variability.
Intangible items are harder to evaluate. The minute a service is created, it is consumed, meaning the producer cannot warehouse it.
“In your business, if you don’t fill your capacity today, the opportunity to make that money is gone,” Lemley said. “You can never recapture that capacity.” A movie theatre can never recoup the revenue lost from showing a film to a half empty theatre.
Inseparability means “the customer sees us making the service, the customer is part of us making a service.” A factory can “hide all the nastiness,” but in the service industry, the customer sees “every little twist and turn.”
Invariability means that customers experience the service in differing ways depending upon their circumstances. Lemley figured he enjoyed his favorite Italian restaurant more on nights when the traffic getting there wasn’t as bad.
Lemley presented a sample worksheet (See: Gaining and Keeping Customers) on how to calculate the lifetime value of a customer, including revenues, cost and referrals. Showing his academic credentials, Lemley also demonstrated Porter’s Arrow, a graphic developed by Michael Porter of the Harvard Business School. The arrow, also displayed in the Gaining and Keeping Customers PDF, covers five dimensions of competition, including inbound logistics, operations, outbound logistics, marketing and sales, and service. Although marketing and sales are listed in the same group, and SHOULD be friends, Lemley argues that, “They ain’t, They ain’t.”
Why? Lemley says the reason is as old as the story of Cain and Abel. When two people are “doing the same thing, with discrete resources, they will always get in a fight. They are competing to get resources to get their job.”
It’s basic economics. Marketing and sales are competing for scarce resources in many, if not most, business organizations.
The key to avoiding conflict is to recognize their differing strengths, which Lemley went on to discuss in relation to the roles of producer, entrepreneur, administrator and integrator. It’s important to know when a company is considering a move, and not just to get a call when the RFP comes in.
Marketing and sales are the strategic tools firms and individuals use to strive to create a sufficient number of transactions so the firm has the potential to survive and prosper in the short- and long-term, Lemley said.
In a coordinated marketing plan, tools such as social media help “soften the market” so that when “the sales troops come through, they know who you are and will be receptive to a call from you.”
Social media is a key, cost-effective way to market, Lemley said. He cited a company that spent millions on advertising, and gave $100,000 to a social media project. The social media turned it into one of the internet’s most popular business-to-business sites.
“Any business that doesn’t have a social media presence is already five years behind,” said Lemley. Some of the best in social media have a PR background.
Companies should develop a sales force targeted at what business needs, not with what the sales force wants. For example, most universities have been scheduling classes when it’s convenient for faculty members to teach. However in the next few months, GSU will be unveiling an innovative, new project based upon a robust analysis of data, aimed at scheduling classes when students want to take specific courses.
Lemley worked through undergraduate school writing advertising copy at a radio station. Tiring of the “tyranny of the empty page,” he picked up an MBA. Lemley is a 28-year veteran in the marketing field where he has served in senior management positions for two of the largest international advertising agency networks. He is also the former managing director of the Professional MBA program at the J. Mack Robinson College of Business at GSU.
Lemley has worked with major national and international clients including Sara Lee Corporation, Twentieth Century-Fox Films, Universal Pictures, The Hoover Company, the Southern Company, Los Angeles Times, Newsday, Wrangler Jeans, Polygram Entertainment, Bertelsmann Music Group, Siemens, Federated Stores and Jack Nicklaus Development Corporation. In addition to his teaching duties, currently he consults with CEOs in turn-around and high-growth companies on many marketing areas including organization, sales, marketing communications, strategic marketing planning and the use of new media in commerce.
The Georgia Association of Business Brokers (GABB) maintains a website that lists hundreds of businesses and franchises for sale throughout Georgia in a variety of fields, including automotive, business services, child care, cleaning, construction, electronics equipment, fitness, flooring, floral, food, gas stations, landscaping, manufacturing, medical, shipping, restaurants, retail, security, signs, and businesses related to the internet.
For more information about GABB, email georgiabusinessbrokers@gmail.com or call 404-374-3990.
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Is This the Right Time to Sell?
“Whatever the reason, there should be something other than dollars that motivates you to explore a sale. After all, if it weren’t more valuable to own the business than to sell it, no one would ever buy it.”
Mike Sharp, M&A Today, November 2002
The owner of a successful company is considering selling, thinking now may be a good time. However, he is told by an outside advisor that business is good and that if he holds on to it for several more years he will get a much higher price. On the surface, this makes a lot of sense. After all, when an advisor tells the owner that if he keeps it for three more years the price will double, that’s a terrific incentive to keep plugging away. However, there is another side to what would appear to be sound advice.
The most dramatic downside would be that the business could go downhill rather than uphill as the advisor predicted. Although no one can predict what the economy will do, there are a couple of possible scenarios. The industry itself might be impacted by some new technology or other companies might enter the field. It is also possible that the owner, having considered selling, is just worn out and can’t or won’t maintain the zeal necessary to keep the business competitive. After all, after many years of running the business, the owner may be tired, “burnt out,” or just plain ready to slow down.
There are other areas to consider as well. For example, equipment may need upgrading or replacement, products or services may be aging and need revitalizing. Additional capital may be necessary to keep the company up-to-date and competitive. Leases may be expiring and long obligations required to renew them. In short, what originally looked like a good strategy to increase the selling price, has backfired. The costs of continuing to operate the business have increased dramatically, the owner has lost interest – and now the company is offered for sale.
The right time to sell may be when the company’s industry, product line or service is at or near the height, of its success. There comes a point when the business or its industry is peaking and everyone wants “in” – and that is the time to sell. There is the old story that the time to sell the buggy whip business was just before Ford started producing the Model-T. As they say, “timing is everything.”
The right time might be when the company is at the top of its game. Sales are robust and growing, the balance sheet is squeaky clean, and the employees are productive and happy. Another good time to sell is when there is a solid buyer who is seriously interested in purchasing the company, or perhaps, when a manager within the company is ready to take over in a buy-out of some form.
So, when is the right time to sell? Perhaps when the owner first decided it might be time. However, there is really no best time to sell. No one can tell the owner when it is the time to sell. Outside advisors are well intended, but no one knows when it is time except the owner. And, when it’s time – it’s time!
Copyright: www.bigstockphoto.com/devon
Tips on Avoiding the Dealbreakers
One of the most important steps is to hire the right advisors. This begins with the right professional business broker/ M&A specialist. The right attorney should be added to the team. The right one is an attorney who has been through the sales process many times – one who is a deal maker seeking solutions, not a deal breaker seeking “why not to” reasons. The accountants must be deal oriented, and if they are the firm’s outside advisor, they should be aware that they may not be retained by the buyer, and must still be willing to work in the best interest of putting the deal together.
Getting through due diligence
One of the three or four times a deal can fall apart is half-way into the due diligence phase, when the buyer finds something he or she did not expect. No one likes surprises, and they can’t all be anticipated. An experienced buyer will probably work his way through it, but a novice may walk away. Although sellers too often hope a potential problem doesn’t surface, it always does. Avoid the surprises by putting everything on the table even if it seems inconsequential. It’s much better to expose all the warts up front than to have them surface later.
Where is all the money going?
Prior to offering their business for sale, sellers should figure out what the net proceeds will be after paying off any debt not being assumed, current payables, closing costs and tax obligations. The middle of due diligence is no time for the seller to realize that the proceeds from the sale aren’t what he or she anticipated. On the buyer’s side, there are times when current sales and profits are suddenly going south. If the seller anticipates this happening, the buyer should be told up front the reason for the rapid decline. Otherwise, if it comes as a surprise to the buyer, it might cause some restructuring of the deal.
No chemistry between the buyer and the seller
If everything goes smoothly (a rare occurrence), the buyer and the seller don’t have to be good buddies. However, if problems or surprises develop, good chemistry can save the day. Sometimes a golf outing or a good dinner can bring the parties together. If both parties want the deal to work, having them get together socially – and privately – can, many times, overcome a stubborn legal or financial issue.
Obviously, not all deals work. However, the odds of the deal closing are greatly improved if both the buyer and the seller consider the areas discussed above. Surprises can work both ways, and the buyers too should place their cards on the table. However, when all else fails, it is the desire of both parties wanting the transaction to work that will ultimately close the deal!
Mistakes that Sellers Make
- Not being flexible in structuring the deal
- Not checking out the prospective buyer
- Not believing that time is of the essence
- Negotiating to win everything
- Nit-picking every item
- Not maintaining confidentiality – and failing to insist that the buyer proceed on a confidential basis
- Not retaining competent advisors
- Not meeting the buyer halfway
Copyright: bigstockphoto.com/digitalista
GABB Donates Toys, Other Items to Foster Children
GABB President Greg DeFoor (left) and Board Member Jeff Merry collect toys and other items to donate to the Foster Care Support Foundation.
ROSWELL, GA – Georgia Association of Business Brokers (GABB) president Greg DeFoor delivered several bags filled with more than 50 toys, clothing items, gift cards and other supplies to the Foster Care Support Foundation (FCSF) in Roswell.
The foundation provides free clothing, infant equipment and developmental toys to thousands of children in foster and relative care throughout Georgia. The GABB, the state’s only professional association of business brokers, collected the items during their annual holiday party.
“These supplies, gift cards and toys will go a long way to helping our children during this holiday season and throughout the year.” Rachel Ewald, executive director and founder of FCSF. “Children come into foster care throughout the year with nothing to call their own and rarely have enjoyed a Christmas as our children have. The items we provide them year round help give a little bit of “normal” in an abnormal situation and provides hope that the world may be a little brighter in the near future. We appreciate all of the support we’ve received from GABB to make this happen.”
The FCSF serves basic-care foster children who reside in Georgia’s foster homes, administered by the Division of Family and Children Services (DFCS), and children housed by private agencies. The foundation also serves grandparents raising grandchildren and parents caring for relative’s children for a limited time. The non-profit group partners with Georgia’s DFCS for child referral, verification, foster parent recruiting, and foster parent training.
GABB members represent owners of Georgia businesses in extremely important transactions: the sale of their business. GABB members help owners determine the asking price of their business, create marketing plans and strategies for selling their business, identify and qualify buyers, and have the knowledge and skills needed to help maintain the confidential nature of the process.
If you didn’t make it to the GABB Holiday Gala (and if you didn’t, you missed a wonderful evening and a terrific meal), you can still support the charity. The foundation operates year-round and needs just about everything, from batteries and bike helmets to shampoo and body wash for teens, to volunteer time and monetary donations.
Contact the FCSF by email or call 770-641-9591.
Read MoreTen Georgia Business Brokers Named to 2015 Million Dollar Club
Ten members of the Georgia Association of Business Brokers (GABB) were named to the 2015 Million Dollar Clubs for helping to broker the sale of small-, medium-sized and large businesses in 2015.
GABB members represent owners of Georgia businesses in extremely important transactions: the sale of their business. GABB members help owners determine the asking price of their business, create marketing plans and strategies for selling their business, identify and qualify buyers, and have the knowledge and skills needed to help maintain the confidential nature of the process. .
Matt Slappey
The top producer for 2015 was former GABB president Matt Slappey, the owner of the Decatur branch of Murphy Business & Financial Corporation.
“I take great pleasure in representing business owners in what is arguably the most important financial transaction in their life,” said Slappey. “I accept my assignments with a great sense of responsibility to the client and to their future. Buying and selling companies are complex transactions and my hope is that all business owners will seek qualified business brokers who are members of GABB to ensure they receive the representation they deserve.”
Business brokers in the top five with multi-million dollars in sales for the year were Steve Josovitz, vice president of The Shumacher Group; Jeffery Merry, owner and founder of the BUSINESS HOUSE, inc.; Jon Merry, a senior business broker with the BUSINESS HOUSE, inc.; and Kim Romaner, president of Transworld Business Advisors of Augusta, Ga. Other multi-million dollar sellers were Eric Gagnon, the president of We Sell Restaurants and wesellrestaurants.com; David Still, founder, designated business broker, and lead business appraiser of Capital Endeavors, Inc., and C. David Chambless, president of Abraxas Business Services, Inc. Rounding out the Million Dollar Club are Dean Burnette, Managing Broker for Best Business Brokers based in Savannah, and Paul Cushman, founder and managing partner of Cushman & Associates, LLC.
Chambless and Gagnon earned the prestigious GABB Phoenix Award for having earned the Million Dollar Club designation for ten years.
The Georgia Association of Business Brokers (GABB) is the state’s only professional organization dedicated to buying and selling businesses and franchises. The GABB maintains a website that lists hundreds of businesses and franchises for sale throughout Georgia in a variety of fields, including automotive, business services, child care, cleaning, construction, electronics equipment, fitness, flooring, floral, food, gas stations, landscaping, manufacturing, medical, shipping, restaurants, retail, security, signs, and businesses related to the internet.
According to Greg DeFoor, GABB’s 2015 President and 2016 President-Elect, selling a business is a complicated process with multiple steps and a lot of moving pieces.
“Our broker members are licensed business brokers, whereas everyone in the industry may not be properly licensed,” said DeFoor, who owns DeFoor CPA and Business Services. “GABB members benefit from continuing education, networking, promotion of professionalism and ethics in the industry, research tools, and forms prepared by a team of attorneys specifically for our association. “
“We are the go-to organization for business sales and acquisitions as a result of our dedication to the profession and our members being among the best in the state at what we do. Our members have represented probably over a thousand transactions, and we have a dedicated membership of business brokers, lenders, attorneys and other professionals to assist business buyers and sellers at every step of the process. We work behind the scenes and go mostly unnoticed, but we’re an integral part of Georgia’s business community.”
The Awardees:
GABB Lifetime Multi-Million Dollar Club Member and 2013 GABB President MATT SLAPPEY is the owner of the Decatur branch of Murphy Business & Financial Corporation. Mr. Slappey was awarded the #1 M&A Advisor for 2014, out of more than 200. Matt has a wide array of experience on transactions typically in the $1 million-$50 million range. Mr. Slappey, a native of Decatur/DeKalb County has earned the Mergers and Acquisitions Master Intermediary (M&AMI) and Certified Business Intermediary (CBI) designations, and he also completed the Kennesaw State University Coles College of Business “Certified M&A Professional” program in 2015. He holds degrees in accounting, economics and business from Presbyterian College and has twelve years of experience in management for a Fortune-100 healthcare company. A 7-year active duty veteran, Mr. Slappey was a pilot and military intelligence officer in the U.S. Army. He is an active member of Oak Grove United Methodist Church, the IBBA and M&A Source, and the Hall County Chamber of Commerce and enjoys spending time with his wife and three daughters, playing music, and enjoying the great outdoors.
Steve Josovitz
STEVEN JOSOVITZ is vice president of The Shumacher Group, where he heads the restaurant business brokerage division and provides commercial retail and restaurant real estate site selection, sales and lease negotiation expertise. A former restaurant owner and trained professional chef, Steven has an extensive background in restaurant and hotel management. He also offers consulting and appraisal services. He has been retained by law firms for his expert opinion to help settle disputes. Mr. Josovitz, a resident of Peachtree Corners, earned a Bachelor of Science in Hotel/Restaurant Management from Florida International University in 1981. Mr. Josovitz is a member of the Georgia Restaurant Association, International Council of Shopping Centers, and the Retail Brokers Network.
Jeffery E. Merry, Sr.
JEFFERY E. MERRY, SR., past president of the GABB, has been the GABB’s top producer numerous times, and has been a part of the Million Dollar Club since its inception in 1999. Mr. Merry, owner and founder of the BUSINESS HOUSE, inc. of Gainesville, is a member of the International Association of Business Brokers. For more than two decades, his firm has specialized in serving the manufacturing, distribution, veterinary and medical industries. As a business intermediary, Certified Exit Planner, and consultant, Mr. Merry has been involved in mergers and acquisitions that have ranged in acquisition price from $60,000 to more than $15 million. He is an adjunct instructor for the MBA program at North Georgia College. Mr. Merry holds a bachelor’s degree from Mercer University, a Master of Business Administration from the University of Illinois Edwardsville, and a Juris Doctorate from Atlanta Law School. Mr. Merry, a resident of Dahlonega, is a licensed real estate agent in Georgia and Florida, a senior business analyst, and a member of the Exit Planning Institute. He has three children and five grandchildren, and enjoys travelling, reading and riding his motorcycle.
Jon Merry
JON MERRY is a senior business broker with the BUSINESS HOUSE, inc. of Gainesville. Mr. Merry has a keen understanding for the buying and selling process, and is well versed in the industry handling a wide range of deal making activities for the firm and has assisted with numerous M&A transactions. In 2012, 2013 and 2014, Mr. Merry received recognition as one of five brokers to join the Multi-Million Dollar Club for closed M&A transactions. In addition, Mr. Merry has been a Certified Machinery/Equipment Appraiser (CMEA) with the National Equipment Business Builders Institute (NEBB Institute) for more than 10 years, and became a Master CMEA this year, the only one in Georgia. A CMEA is intensively trained in the legal requirements involving the USPAP standards, as well as the methodological approach employed in establishing fair market value, orderly liquation value, and force liquation value in any market condition. Mr. Merry is owner of M&E Appraisals, Inc. of Dawsonville, Ga., and is a member of the International Business Broker Association (IBBA), the International Society of Business Analysts (ISBA), and the Georgia Lenders Quality Circle (GLQC). A native of Georgia, Mr. Merry was a professional umpire for Minor League Baseball for 11 years. He and his wife, RaeLynda and their two sons, Jacob and Joseph, live in historic Dahlonega.
Kim Romaner
KIM ROMANER is the president of Transworld Business Advisors of Augusta, Ga. Ms. Romaner is an alumna of Barry University in Miami, and currently lives in North Augusta, S.C., with her husband and business partner, Michael. She serves on the advisory boards of the Salvation Army and the Greater Augusta chapter of the Technology Association of Georgia, is a founding member of theClubhou.se (cq), an innovation academy in Augusta, and serves as a mentor with Startup Augusta. Ms. Romaner has two children, ages 25 and 26, and is proud that her son Zack has just started his first business, and daughter Alexis is on her way to getting her real estate license.
Eric Gagnon
ERIC GAGNON is the President and founder of We Sell Restaurants and wesellrestaurants.com. He is a past President of the Georgia Association of Business Brokers and has been named to the GABB Million Dollar Club, has received the GABB Lifetime Million Dollar Club Award and this year, earned the prestigious GABB Phoenix award for a decade of reaching these milestones. Eric has been designated an industry expert by Business Brokerage Press and is a radio personality, frequent speaker and writer. Eric co-hosts a syndicated radio show for the restaurant industry and in 2012, launched his restaurant brokerage brand, We Sell Restaurants, into a national franchise. He co-authored Appetite for Acquisition, his book on buying restaurants that was named “Best of 2012” by Small Business Book Awards. In addition to GABB, Eric is a member of the International Business Brokers Association (IBBA) and has served as a speaker at its national meeting. He is also a member of the Business Brokers of Florida (BBF), the Southeast Franchise Forum (SEFF) and the International Franchise Association (IFA). Eric is licensed as a broker in Georgia, South Carolina and Florida. He holds degrees from major universities in the United States and Canada.
David Still
GABB Lifetime Multi-Million Dollar Club Member and former GABB President DAVID R. STILL is the founder, designated business broker, and lead business appraiser of Capital Endeavors, Inc., established in 1995 and located in Lawrenceville, Ga. He was recently elected without opposition to the Lawrenceville City Council. He earned a Bachelor of Business Administration from the University of Georgia. As a Certified Business Intermediary, he specializes in the mergers and acquisitions of privately held companies with gross sales between $1 million and $50 million. Mr. Still was a co-owner and publisher of the Gwinnett Post-Tribune newspaper. Mr. Still received the GABB Lifetime Achievement Award in 2002. Mr. Still is the Chairman of the Downtown Development Authority of the City of Lawrenceville and active in multiple non-profit organizations. He is married and has two grown children, one daughter-in-law and two grandchildren.
C. David Chambless
A lifetime member of the GABB Multi-Million Dollar Club and 2014 GABB President, C. DAVID CHAMBLESS is the president of Abraxas Business Services, Inc. This year, he earned the prestigious GABB Phoenix award for a decade of reaching the Million Dollar Club. Prior to Abraxas, he held various positions in sales, marketing, and executive roles in technology firms; as CFO for Aaron Rents as well as for private companies; and as a management consultant. Mr. Chambless has a Master of Business Administration in Finance from the Wharton School of the University of Pennsylvania and a Bachelor of Industrial and Systems Engineering from Georgia Tech. He is a certified public accountant (inactive). He is a longtime member of the International Business Brokers Association (IBBA). Active in community work, he has served as a board member of the Technology Association of Georgia, on the membership committee for the Atlanta chapter of Business Executives for National Security, and the Sporting Clays Tournament committee for the Atlanta Area Council of the Boy Scouts of America. Mr. Chambless is very involved in the All Saints’ Episcopal Church community. He was a fifteen-year board member of The Samaritan House of Atlanta and is on the Advisory Council of 24/7 Gateway, a homeless-services center under the auspices of the United Way of Atlanta. Mr. Chambless maintains his family‘s home in historic Grant Park while his wife and 14-year-old son spend several years in Guangzhou, China, where she leads an educational joint venture for Georgia State University.
Dean Burnette
DEAN BURNETTE is the Managing Broker for Best Business Brokers based in Savannah, Ga., serving the Coastal and South Georgia area. Mr. Burnette is a member of the Real Estate Commercial Alliance (RCA), a subsidiary of the Savannah Area Board of Realtors (SABOR). He served as the 2013-2014 President of the Savannah Small Business Chamber, and he is also a member of the Savannah Area Chamber of Commerce, Georgia Association of Realtors (GAR), International Business Brokers Association (IBBA), and sponsors the Georgia Logistics Summit. Dean has bought, sold, owned and operated businesses since 1986. Best Business Brokers specializes in Manufacturing, Technology and Logistics related business and real estate valued between $1- and $30 million.
Paul Cushman
PAUL CUSHMAN is the founder and managing partner of Cushman & Associates, LLC. He is also the CEO of CM Payroll & Business Services, founded in 2001; the founder and managing partner of Lawnscapes of Georgia, LLC, a landscaping firm; the qualifying broker for John Hunsinger Inc., a Commercial Real Estate firm, and is the General Manager of CM Properties, a property management firm. He is a disabled veteran of the U.S. Air Force. He holds a BSEE and Master of Science in Engineering Management from the University of Alabama in Huntsville, where he also played collegiate basketball and soccer. A former member of the GABB Board of Directors, Mr. Cushman, is also a member of the Commercial Board of Realtors, and he is a Certified Business Intermediary and a member of the IBBA. He is also a choir member at First Redeemer Church in Cumming, Ga.
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