Wrapping Up 2021
New Highs on the Horizon
Winter 2021
The insights and opinions expressed herein are those of the authors and do not represent professional counsel nor an endorsement by the IBBA.
A Q u a r t e r l y D i g i t a l P u b l i c a t i o n o f t h e I n t e r n a t i o n a l B u s i n e s s B r o k e r s A s s o c i a t i o n
T H E B E S T I N S I G H T S O N B U Y I N G A N D S E L L I N G S M A L L B U S I N E S S E S
Plus Insights on:
+ When to Cancel a Listing
+ How to Use Zoom and Snail Mail to Your Advantage
+ The On-Demand Business Model’s Impact
+ Case Study: Using ValuSource Market Comps
+ Legislative Updates
and More!
The best insights on buying
and selling small businesses
In this Issue
10
15
20
28
30
LETTER FROM THE CHAIR
WHEN TO CANCEL A BUSINESS BROKERAGE LISTING
THE POWER OF ZOOM COMBINED WITH OLD SCHOOL SNAIL MAIL
THE IMPACT OF AN ON-DEMAND ECONOMY
THE INSECURITY OF J-O-B SECURITY
LEGISLATIVE UPDATES
CASE STUDY: WHY MICHAEL VANN
RELIES ON VALUSOURCE MARKET COMPS
New Highs On The Horizon
Lisa Riley, CBI, CM&AP, CBBI | Delta Business Advisors
It’s hard to believe I’m writing my final Chair’s le�er for the year. In doing so, it’s
given me cause to reflect back on all that has been 2021. In certain ways, I’m sure we
all wished things were be�er…eradicating COVID and achieving political stability
might come to mind. But aside from the things that are beyond our direct control,
I believe it has still been a remarkable year with much to be thankful for.
As we all work thru the end of year deal madness, let us not think of this as just the end of a year –
but rather the start of another. We’re all on the brink of ge�ing another year to do this great and
fulfilling work, and to see what new peaks we can achieve in our success.
I know that 2022 will be a banner year for the IBBA and its Members. At the time of this le�er, we are
already at 1,820 members – that’s nearly triple where we were just six years ago! Seeing the chart below
makes the numbers more real and, more importantly, tells the story of our historically fragmented
industry strengthening its commitment to professionalism, education and excellence.
Some of you may recall that a few years back we set an aggressive goal of 2020 Members by the end of
2020. While we didn’t hit that goal, foundations were set then for our long-term success and I’m 100%
confident making this prediction to you now: The IBBA will surpass 2,022 Members in 2022 and
achieve a new all-time high in membership!
WINTER 2021
Yes, the IBBA is aiming high for the year ahead with a continued emphasis on maximizing Member
value-add. We know that IBBA can only grow by remaining relevant and beneficial to our individual
successes as Business Brokers. With the IBBA and all its benefits beside you, I encourage you to also
boldly aim high for the coming year. Remember, it’s always be�er to aim high and miss than aim low
and hit.
Stepping up to lead the way as IBBA Chair for 2022 is my friend and colleague, Randy Bring. Randy’s
vast experience in business brokerage is only surpassed by his heart for this business. I know that
he, in collaboration with our Board, volunteers, partners and staff, will make great things happen
and achieve many new highs for the association (I’m hoping this includes our highest Conference
a�endance yet in the Mile High City this May!).
Finally, let me say how honored I’ve been to serve as your Chair this year. I feel like us Chairs always
say the same thing, but it’s true: I’ve enjoyed the privilege of giving back to the association that has
given me so much. It’s particularly gratifying to see younger professionals stepping up into various
leadership roles, as they are truly the future of our profession and will continue to find ways to do this
business that tenured folks never imagined.
All my best to you and yours this holiday season, and I wish you both peace and prosperity as we begin
the new year.
Sincerely,
LISA RILEY
2021 IBBA Chair, CBI, CM&AP, CBB | Delta Business Advisors
lisa@deltabusinessadvisors.com
LETTER FROM THE CHAIR
IBBA is pleased to welcome
497 New Members this year!
When to Cancel a Business
Brokerage Listing
Jeffrey D. Jones
ASA, CBA, CBI
Advanced Business Brokers
The life blood for a business broker is obtaining a new listing. It is the beginning of a
lengthly process that includes preparing the business profile, writing and publishing
advertising on various business for sale websites, interviewing buyer prospects,
conducting inverviews between buyers and the seller, assisting the buyer through the
due diligence process, obtaining a lease assignment, arranging financing, and perhaps
coordinating with a franchisor. We do all of this for the most part on a contingent fee
process. However, there are many reasons why a client relationship might fall apart.
Knowing when to cancel the listing and walk away is important to avoid loss of further
time and money on a project that is likely never going to happen.
Sometimes the problem with a client starts with incorrectly taking the listing in the
first place. In the excitement of obtaining a new listing a business broker may overlook
important issues such as proper valuation of the business, fully uderstanding the reasons
the client wants to sell, agreeing to take a short listing period, not obtaiing critical
documents that will be needed for the buyer’s due diligence process, or not properly
communication with the seller’s accounant and attorney who may be giving the client
advice in conflect with your process of selling a business.
Once the listing is obtained, the following issues are red flags for problems ahead and anyone
of which could cause a transaction not to happen.
•
Shortly after taking the listing, the client decides that the asking price needs to be
increased and/or the terms of sale need to be changed.
•
The client promises, but never provides the requested documents such as tax returns,
copy of the property lease, and/or list of assets to be included in the sale.
•
The client monopolizes your time calling, texting, and/or emailing a barrage of messages
with constant request for information, status reports, or just wanting to talk.
WINTER 2021
•
The client demands overly burdensome requirements of buyer prospects before
releasing any information to them, such as wanting to know who the buyer is prior
to giving out information on the business, or requiring the buyer to provide their
financial information prior to giving out the seller’s financial information.
•
Restricting meeting times and showing of the business facilities to late evenings,
weekends, or many days in advance.
•
The client is slow to respond to buyers’ request for information about the business.
•
The client is not willing to respond to a buyer’s offer even with a counteroffer.
•
The client imposes unreasonable criteria on a transaction, such as wanting the closing
to be at his place of business, not willing to provide a reasonable training period after
the sale, and/or not willing to sign a reasonable non-compete agreement.
Yes, client’s sometimes do change their mind about selling. It is called seller remorse, but
rather than tell the broker to take the business off the market and perhaps incur a fee,
they impose unreasonable provisions that ensure the business will not be sold.
In business brokerage the two things we have to offer a client is our time and knowledge.
When we waste both of these attributes on transactions that are not going to happen, it
is time to cancel the listing and walk away. But first, it may be necessary to review your
listing agreement to ensure you do not violate any provisions of the agreement, such as
having collected an up-front service fee, committed to specific type of marketing services
you have yet provided, or tried your best to communicate with the client to resolve the red
flag issues. When informing the client you are canceling the listing agreement, do so in as
positive manor as possible so that you do not burn any bridges. Reminder, the client is
likely to talk with other people about his/her experience with you and your company.
Furthermore, time does cure a lot of issues and perhaps in the future the client may decide
to relist with you and be more flexible in the criteria imposed on the sale.
JEFFREY D. JONES
ASA, CBA, CBI
jdj@advancedbb.com
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The Power of Zoom Combined
with Old School Snail Mail
George Bradbury
CBI
ENLIGN Advisors