How to Write an Effective Business-for-Sale Listing
Georgia Association of Business Brokers can now post business-for-sale listings on the new GABB website. But, as BizBuySell points out, it’s important to create a well-written online listing. You want to attract qualified buyers. According to BizBuySell’s latest demographic survey, business buyers tend to be college educated and earn over $100,000 per year. Buyers are more likely to respond to listings with these specific attributes, according to the website.
1. Specify a location.
Most buyers search for a business by state, many by a specific county. Confidential listings receive more views when they included a location.
2. The listing appears in their search category.
More than a third of prospective business buyers search in a specific category of business. You can improve that percentage by selecting two or more appropriate categories for your listing.
3. Include key financials.
Most buyers want to know the asking price, followedg by cash flow. Including these important financial details makes it easier for serious buyers to find your listing in a search and contact you.
4. A great headline.
“Profitable coffee shop in busy shopping mall,” and other headings with key details are better than “popular cafe.”
5. A well-written description.
A good description has all the essential facts, such as the business’s strengths and potential, number of employees, the owner’s reason for selling, and opportunities for expansion. Beware of exaggerations. A hyped-up listing will alienate serious buyers.
6. An attractive photo.
Even if you cannot use a photo of the actual business for confidentiality reasons, you should still post a stock photo. A good site to find generic, free stock photos is Pexels. The GABB administrator can also help you find photos. Buyers are more likely to notice listings with photos.
7. Seller financing!
Experienced business brokers know that financing is one obstacle in selling a business. So it’s a huge advantage if the owner is willing to carry part of the financing. Seller-financed businesses are more likely to sell than those that are not.
8. Broker contact details.
Your listing should include details on how to reach you easily. Every prospective buyer should receive a response from their inquiry within the first 24 hours. A slow response might mean you miss a qualified buyer.
The GABB website’s new listing feature is still undergoing improvements, so please let us know if you have suggestions for using this feature. To date, this feature is included in your GABB broker membership at no additional charge. For help with this feature, please contact GABB Executive Director Diane Loupe at georgiabusinessbrokers@gmail.com or GABB President Dean Burnette at 912-247-3209 or dean@b3brokers.com.
Read MoreHow Not to Fail as a Business Broker
By Lou Vescio, CBI, M&AMI, Managing Partner, Coastal Business Intermediaries & Agency Brokerage Consultants
2017 Chairman of the IBBA, Fellow of the IBBA, Fellow of The M&A Source
Having been part of the Business Broker or Business Advisor Profession for about 16 years, I have seen many new Brokers come and go! I have also seen many grow their practice into very lucrative and profitable enterprises. Why do some Brokers succeed and prosper, while others give up in six months to two years? Having participating in several professions in the past fifty years, from flying jets in the Air Force, to a 15 year career with a Fortune 500 company, to building a couple computer training businesses and selling them, and finally becoming a Business Broker, I believe I have identified a few traits that make the great Brokers great and why some Brokers fail.
Perseverance – If you have ever read anything about Navy Seals, they never give up! The Basic Underwater Demolition/SEAL (BUD/S) school includes some of the most difficult training that exists, and most participants drop out due to the physical and mental stress. Perseverance is the key to their success.
This is not to say that becoming a great Business Broker comes close to becoming a Navy Seal, but all successful Business Brokers that I know exhibit the “failure is not an option” mentality. The Business Brokers workday is not a “9 to 5” type of day; it’s an “I will do whatever work I need to do, whenever I need to do it” type of day!
Education – Great Business Brokers are always learning more about their profession. Education obviously includes taking IBBA and M&A Source courses and workshops attending professional conferences sponsored by associations like the GABB, but it also includes reading everything available that is pertinent to the profession. Great Business Brokers also network with other great Brokers across the country and even across the world. Every business is different, every deal is different, and sharing and networking with other professionals offers new and fresh ideas and concepts.
Learn to say “No” – One of the Brokers I admire is Jim Afinowich, Managing Partner with IBG Fox & Fin in Scottsdale, AZ. Many years ago, he taught a workshop on saying “no” to bad listings. New Brokers tend to take almost any listing just so they have something to sell, but statistics tell us that 75% to 90% of businesses listed by Business Brokers do not sell! On the other hand, great Brokers sell 80% to 95% of their listings. Learning to price businesses properly (that Education thing above), properly analyzing good businesses when writing a great CIM (again that education thing), and walking away from unreasonable sellers by “just saying no” (in a nice way of course) are a few keys to success.
Marketing – While we all like to receive great referrals, most Brokers would go out of business if they did not market their services. Without going into the details of what kind of marketing a Broker should undertake, the key is marketing costs money and it is a requirement to succeed. The IBBA offers courses, workshops and webinars on every type of marketing, and the costs can vary from hundreds of dollars to tens of thousands of dollars. Fifty years ago, Tom West, author of The Complete Guide to Business Brokerage, suggested mailing a hundred letters a week and calling that same hundred business owners a week later. That is probably the bare minimum and may still be one of the most effective tools. Marketing is one of those “just do it” activities, and do as much as you can afford!
Salesmanship – While many people may disagree with me, we are saleswomen and salesmen. If we do not sell, we don’t make money! Some Brokers like to refer to themselves as advisors, consultants, or intermediaries, but in the end, we are still salespeople! More precisely, we engage in consultative selling, meaning we focus on creating value and trust with the prospect and exploring their needs before offering a solution. Our first objective is building a relationship, and then we provide the right solution to the problem. There are many courses and books on how to sell everything under the sun, but one of the best sales books a Broker can read is How to Win Friends and Influence People by Dale Carnegie (1936). It is more about getting people to like you, and that is the first step in selling. You can download and read it here for free.
Find a Mentor – Having a mentor when starting out as a Business Broker is a big plus, and joining a professional association like the GABB can help with this. Having an experienced and trusted adviser who will assist in training can shorten the timeline from “Start” to “Success!” It is also advisable to work in a successful brokerage when starting out to avoid many costly and time-consuming mistakes. Whether it be a franchised brokerage or an independent brokerage, find a mentor that meets the following criteria: 1) knows how to make a lot of money selling good businesses, 2) promotes IBBA education and certification, 3) assists in valuing and critiquing potential listings and 4) assists in negotiating difficult transactions.
Become an IBBA Contributor – One of the best ways to enhance your IBBA experience is to actively participate in the annual conferences, courses and workshops and share your experiences with others. Join a committee or two and be active. The friends you make and the experiences you share with others will enhance your Business Brokerage experience. (Note, the GABB also offers conferences, committees and monthly meetings.)
Finally, to all you Great Business Brokers out there, make friends with a new member at the next IBBA Conference and offer yourself as a mentor. You will find it very rewarding!
Reprinted with the permission of the International Business Brokers Association.
What Kind of Business Seller Are You?
By Peter Siegel, MBA, Founder and President of BizBen.com.
Almost everyone who owns a company wants to put it up for sale sooner or later. And if the owner doesn’t have employees or family members ready to put up the money and take over the business, the owner must find a buyer in the business-for-sale market. Sadly, only one-third of the hopeful sellers in this market will be successful.
That means two-thirds of owners unable to connect with a buyer will ultimately have to close the business or give it away. The problem may be that the business simply is not desirable. But just as frequently, the reason an owner can’t make a sale is because he or she is one of the many seller types who inevitably will fail.
If the seller can identify what type of seller they are, they can gauge their chances of successfully selling their business.
1. Make a Killing Mike: Also known as “Make a Million, Mike,” this individual believes his business is worth more than any sensible buyer will pay for it. There are a number of ways Mike justifies the asking price. A popular idea is that a similar business recently sold for the price Mike wants. But no two businesses are alike, and Mike doesn’t understand that the “similar” business is much more profitable and in a better location. The market may not reward Mike if he should eventually lower the price to a figure close to its value. Buyers often are not interested in investigating a business that has been on the market for a long time – whatever the reason.
2. Clarence Can’t Carry: An important selling feature of most any business offering is the willingness of the seller to “carry back” part of the purchase price. Along with a cash down payment, the seller receives a promissory note usually secured by the business assets, to be paid off by the buyer over a period of time. It’s reassuring for a buyer when the seller is willing to help finance, because it demonstrates that the seller believes in the business and in the buyer’s ability to operate it successfully. An offering that can only be purchased with all cash is almost always unappealing compared to other opportunities that come with seller financing.
3. Rita Rosy Picture: According to Rita, her business is about to become as much in demand as this week’s most popular show business celebrity. She has the best inventory in town, the most helpful and loyal employees, and greater prospects for the future than any buyer can imagine. Even a business that does excel in some respects has its problems and disadvantages. Buyers know that and often don’t feel secure about an opportunity that is described only in the most optimistic way. When meeting with a seller who doesn’t come across as honest and credible, many buyers get a negative feeling about the opportunity – the opposite of what the seller intended.
4. Nick Not Ready: Any prospective buyers meeting Nick will wonder how he could be trying to sell his business but not be able to produce current financial information, a list of assets to be included, or a definitive description about the premises lease that the landlord will provide to a new owner. Does the seller have something to hide? Is he really that disorganized? If so, what does that say about the condition of the business? Did he neglect to “get his stuff together” because he doesn’t really believe the business is salable? These are questions that occur to buyers as they decide they aren’t interested in what Nick has to offer.
5. Don’t Worry Dorothy: When Dorothy tells a prospective buyer that he or she shouldn’t worry, the buyer usually worries. Buyers want to know what happens if the customer who accounts for half the company’s income decides to do business elsewhere. They want to understand the consequences if a large competitor moves into the neighborhood. If the seller can’t answer these questions, the buyers really won’t worry about those issues. That’s because they’ll look for another business to buy.
6. Secret Sam: One of the things Sam likes to tell prospective buyers is how much of the company’s income goes directly into his pocket without being recorded on the books. He may be proud of his skimming habit. He may think he’s quite clever at fooling the taxing authorities. He might think the buyer will add the total of unreported cash to the reported income and decide the business is making enough money to justify the asking price. But he’s mistaken. The buyers who investigate Sam’s business soon realize he can’t be trusted and move on to find out about other opportunities.
7. Realistic Ralph: Since he is motivated to sell, Ralph wants to present his business in a way that will generate positive responses from buyers. He understands he needs to be proactive in preparing the business for sale. The asking price accurately reflects market conditions. His books are in order and ready to be investigated by qualified buyers. Ralph met with financial institutions with the help of a niche financial advisor who specializes in business purchase financing. The business has been prequalified for financing. And Ralph is willing to carry back 20% of the price with a note. And he’s hired a professional business broker from the Georgia Association of Business Brokers who can develop a confidential plan to market his business to qualified buyers. His approach is a clear recipe for selling success.
If you identify with any of the first six seller types, you’re limiting your chances of selling your business. But if you assume the characteristics of Realistic Ralph, your business is likely to be among the one-third of business offerings that result in a sale.
About The Author: Peter Siegel, MBA is the Founder and President of BizBen.com. He is a SBA SCORE Counselor, author, consultant/coach (ProBuy, ProSell Programs), and advocate on the topic of buying and selling small to mid-sized businesses in the California marketplace. Having writen three books and hundreds of publication articles he has assisted small business owners/sellers, business brokers, agents, and business buyers for over 25 years. This article was adapted from one that originally appeared on his blog.
Read MoreEthics and Managing Your Brokerage: GABB Fall Conference, Oct. 29, 2019
Learn the skills you need to be a better business broker at the Oct. 29, 2019 Fall Conference of the Georgia Association of Business Brokers.
The morning program, which is intended exclusively for Georgia Business Brokers who are real estate licensees, is focused on various ethics topics specific to the business brokerage profession, such as maintaining confidentiality, working with tax returns, loan applications, handling financial statements, client loyalty, using forms created by the Georgia Association of Business Brokers, and other topics.
During the afternoon program, attendees will learn about common issues in the management of a business brokering practice, including handling escrow accounts, setting commissions, co-brokering, keeping records, branding and marketing, maintaining a database for marketing and tracking clients, and other issues.
Brokers will earn a total of six continuing education credits courses certified by the Georgia Real Estate Commission. The class will be held at the Georgia Association of Realtors Conference center at 6065 Barfield Rd, Sandy Springs from 9 a.m. until 4 p.m. Lunch will be provided by Leigh Milton and Claudia Wilson of Center State Bank, and breakfast will be provided by Eva Farag of Oconee State Bank.
Registration for the conference will be $150, but GABB members can register for $99 if they register by Oct. 10. If you want to just take half a day of classes, that’s $85. Scroll to the bottom of the page to register.
GABB Code of Ethics and Ethical Concerns
Morning Session 9:00-12:00, 3 Continuing Education hours
Learning Objective: Attendees, all of whom are licensed real estate agents, will become familiar with the GABB code of ethics and how to handle various ethical concerns related to financial statements and other representations by clients.
Instructors:
Susan Kite, Senior Vice President, Government Guaranteed Lending at Georgia Primary Bank
Susan J. Kite has more than 30 years of experience in commercial and SBA lending. She began her career in Jacksonville, Florida, as Director of an SBA 504 lender, moving to Atlanta with Bank South in 1990. Susan has worked with several Atlanta banks including Crescent Bank, Brand Bank, and Renasant Bank before moving to Georgia Primary. She is skilled at SBA 7a Term loans, SBA 504 loans and SBA Express credit lines. She specializes in business acquisition lending. Susan has served as Chairman of the Board of Directors of the Georgia Lender’s Quality Circle, a professional organization of SBA lenders in the Southeast. She also sits on the loan committee of Capital Partners Certified Development Company. Kite earned a bachelor’s in Business Administration from Terry College of Business at the University of Georgia.
Lawrence Domenico, Managing Partner Mozley, Finlayson & Loggins LLP
Mr. Domenico joined Mozley, Finlayson & Loggins in 1990 and practices in the areas of estate planning and probate, commercial and business litigation, and general litigation. Mr. Domenico also has extensive experience as a business lawyer in assisting start-up and existing businesses. In addition, Mr. Domenico has broad experience in alternate forms of dispute resolution including arbitration and mediation. Mr. Domenico was born in St. Paul, Minnesota, on April 29, 1963. Mr. Domenico received a B.A., cum laude, from the University of the South in 1985. He attended the University of Georgia School of Law where he received a J.D., cum laude, in 1988. Mr. Domenico is a member of Phi Beta Kappa and Omicron Delta Kappa honorary fraternities. He belongs to the Atlanta and American Bar Associations, the State Bar of Georgia, and the Defense Research Institute. Mr. Domenico is active in a number of civic organizations and is a member of the 1995 class of Leadership DeKalb and the Rotary Club of Dunwoody.
David Chambless, Business Broker, former President of the GABB Board, member of GABB’s Million Dollar Club., president of Abraxas Business Services. He has extensive experience in business development; finance; operations; sales; marketing; and international channel development and management. He has a Master of Business Administration in Finance degree from the Wharton School of the University of Pennsylvania and a Bachelor of Industrial and Systems Engineering degree from Georgia Tech. In 1982, he became a Certified Public Accountant.
Brokerage Management
1:00-4:00 p.m., 3 continuing education hours
Instructors:
Dean Burnette, Business Broker, President of the GABB Board, past member of GABB’s Multi-Million Dollar Club, Managing Broker of Best Business Brokers of Savannah. Mr. Burnette is a member of the Savannah Area Realtors – Real Estate Commercial Alliance (RCA), The Georgia Association of Realtors, and the National Association of Realtors. He is a member of the Savannah Area Chamber of Commerce, the Savannah CFO Council, Savannah Traffic Club, is a member and was the 2013-2014 President of the Savannah Small Business Chamber.
Jeff Merry, Business Broker, former President of the GABB Board, current GABB board member, platinum member of GABB’s Multi- Million Dollar Club, and founder and president of the BUSINESS HOUSE, inc.SM. As a Business Intermediary, Jeffery has been involved in more than 200 mergers and acquisitions that have ranged in acquisition price from $60,000.00 to more than $15,000,000.00. Jeffery specializes in serving the manufacturing, distribution, veterinary, service, and medical industries. Jeffery holds a Bachelor’s Degree from Mercer University, a Masters of Business Administration from the University of Illinois, and a Juris Doctorate from Atlanta Law School. Jeffery is also a licensed real estate broker in Georgia and Florida. Further, he is an Adjunct Professor of strategic management, accounting, and finance in MBA programs.
Mike Ramatowski, Business Broker, current member and Past President of the GABB Board, member of GABB’s Million Dollar Club. CBI, owner of RamBizGroup LLC, works with business owners, sellers and candidates for merger by acquisition from manufacturing, distribution, and service businesses. He has owned and managed businesses that included a real estate master franchise, a property management networking company, and a service business. As COO of a banking conglomerate he managed brokerage operations, title companies, home and service warranty programs, and a relocation company. Mr. Ramatowski has served on the board of directors of 12 different organizations with diverse specialties including real estate brokerage, mortgage companies, title insurance, banking, health care, fitness center operations, and office supply operations, providing marketing and organizational growth expertise. He served as an Electronic Specialist in the U.S. Navy Submarine Service. He attended Cleveland State University and Baldwin Wallace College. He has earned the Certified Business Intermediary professional designation by the International Business Brokers Association.
Jon Roman, Business Broker, Treasurer of the GABB Board, member of GABB’s Multi-Million Dollar Club, and owner of Transworld Business Advisors of Atlanta Perimeter, an award-winning group of ten agents, a Franchise Director, an office manager and a marketing sales specialist. For nearly 18 years, prior to Transworld, Jon had helped entrepreneurs to obtain funding when acquiring, selling or franchising businesses. He established, acquired, operated and sold his own businesses for over 20 years. Mr. Roman is a former commercial banker with experience in a multitude of deals. Throughout his career, Jon financed mergers and acquisitions, business expansions, construction and development projects. He evaluated businesses, built and consolidated financial records and shared opinions regarding business plans, and/or exit strategies. Jon is a multi-million-dollar member of the Georgia Association of Business Brokers (GABB) and is currently serving as a treasurer for GABB. Among other qualifications, Jon is a CCIM (Certified Commercial Investment Member) since 2005.
This class has been organized by the Georgia Association of Business Brokers and the GREC certification is through the Capitus Real Estate Learning Center.
Read More
What is Marketing, Really?
By Diane Conklin
Diane is the founder of Complete Marketing Systems. She will be speaking on Wednesday, Aug. 21, to the Georgia Association of Business Brokers meeting at the Georgia Association of Realtors auditorium at 6065 Barfield Road, Sandy Springs, GA, 30328. More information on the GABB blog.
Marketing sometimes gets a bad rap…
People will say things like “it’s yucky” or “it makes me feel dirty” and the list goes on and on.
If that’s true for you, then what you’re experiencing is Not Marketing – at least not marketing done the way it should be.
Marketing can be defined in many ways. Simply put, it’s really everything you do in your business to put yourself in a situation to sell your programs, products and services.
While that may seem like a big, broad definition, if you think about it, it may be the truest definition of marketing you’ve ever heard.
So, what does that really mean?
It means that marketing is about building the relationship with your prospect and your client so they will want to know more about you and what you do and then buy from you.
By that definition what does marketing include…
√ Social Media √ Articles
√ Emails √ Interviews
√ Snail Mail √ Speaking
√ Print Ads √ Ads
And, so much more…
If you put you in your marketing and stop thinking about it as some formula you have to follow or how you can use the latest tactic to get a sale, you may just discover that marketing is fun.
Marketing is how you let your clients and prospects get to know you a little better, it’s how you ultimately SERVE your clients and how you make money.
Do some people use tactics that might not resonate with you? Sure, they do. We’ve all had less than stellar experiences with people marketing to us or trying to sell us something that didn’t sit right with us.
The key for you is to not do those same things…to be more personal, caring and to come from a place of serving and doing what’s right for your clients and prospects (please don’t think I’m saying here that the client is always right – I don’t believe that, but that’s a discussion for another day).
I’d love to hear your feedback or stories of great marketing.
- (866) 293-0589
- Email: info@completemarketingsystems.com