We have already completed the first quarter of 2024. How time flies. From my communications with members, business seems to remain strong. Let’s keep pushing and make 2024 a monumental year.
Chair’s Letter
As always, there’s a lot going on here at the BBF! Here are some key updates and reminders to help you take full advantage of everything your association is providing.
First, BBF’s Forms Committee has been busy and delivered to us 4 new updated forms ready to use now. These are an APA, Listing Agreement, NDA, and an NDA to be used with Private Equity Groups. The Forms Committee is also finalizing a new Stock Purchase Agreement which we should see in the very near future. Thank you to Ryan Cave for hosting a webinar on April 4th that reviewed the key updates to the APA and Listing Agreement – if you missed it, make sure to check out the recording on the Members Center (along with recordings of our other great educational webinars).
Our Conference Planning Committee is also in full swing planning our statewide Conference, August 23-25 at the beautiful Caribe Royale in Orlando. This is a great opportunity to sharpen your skills with workshops designed for all experience levels of business brokerage, from new brokers to the very seasoned broker. Plan to share in the high energy, camaraderie, and support of our great organization (and have a lot of fun too). We will have a great lineup of speakers and workshops, and this year our Affiliates can showcase their services at the Conference to help us get more deals done! Attendee registration opens in June, but here are some important planning links:
Affiliates, download the EXHIBITOR OPPORTUNITY GUIDE and sign up by April 19th to save. Sponsorships are also going fast so don’t delay!
Anyone interested in presenting a workshop should complete the WORKSHOP SUBMISSION FORM by April 30th. Help us build a great lineup of topics at the Conference!
Start making your plans now by reviewing the AGENDA AT A GLANCE and if necessary, BOOK YOUR HOTEL ROOM early in our block to get a great rate.
Lots more information to come on the Conference, but I’m already confident this will be our biggest and best yet.
This is also the time of year when we recognize the outstanding accomplishments of our Members with our State and District Awards. We have a record number of award recipients this year, and I would like to congratulate each member for their achievements in 2023. Winners will be announced shortly, and the Districts are lining up their awards banquets so be sure to attend. Let’s all work together to make 2024 another record-breaking year!
There’s lots more going on but these are just the highlights. As an association we are in the midst of an exciting time of growth and improvement. That’s why on the Conference Agenda we’re doing a Town Hall session on Sunday where we’ll go more in-depth on all the great initiatives and answer your questions along the way. On behalf of all BBF leadership we hope you will participate as it is YOU, our Members and Affiliates, that make the BBF great!
Best regards,
Paul McNally
Chairman, Business Brokers of Florida®
Just when you think things are going along smoothly
Just when you think everything is going smoothly in a transaction, never say it out loud because you know what is coming next… Something to derail it will pop up. And, sure enough it did on one of our most recent SBA financing transactions that involved a business acquisition of a profitable well-established restaurant.
In June of 2023 we processed a loan request for a borrower who was purchasing an established restaurant on the west coast of Florida. This was the second attempt this borrower made to purchase a restaurant. The first one fell through during his due diligence that had nothing to do with his financing. So, the bank was familiar with this borrower, we liked him, he had solid industry experience, good personal credit and although some of his cash injection was coming from gifted funds, he had the funds to inject and still have some personal liquidity post-closing. All the attributes a lender could hope for.
So, when his second request came to us to purchase an even better restaurant than the first, it sailed through pre-qualification, term sheet, underwriting and into closing. No issues encountered. Our borrower was a model borrower and provided everything we needed for closing very promptly and we were sliding into closing by the end of July.
Now comes the not so smooth part! A week and a half before the scheduled closing the seller informed us that he just received notification that his company was chosen for a standard run of the mill state sales tax audit and, therefore, we were unable to obtain the Sales Tax Certification we needed to close. However, we had a cooperative seller who wanted to sell and we had a motivated borrower who still wanted to buy so an extension was provided to allow for what was supposed to be a quick process to complete and then we could obtain the certification and close. This was the last item of the outstanding closing documents needed.
Well, extension #1, then extension #2, then extension #3…. You get the idea. Each time the seller checked with the state he was told they would be getting to it but that they were horribly understaffed and could not give him a completion date or even when they would start on his file. So, here we go rolling into 2024 with a January 31, 2024, expiration date of the contract yet again and no resolution to the sales tax audit issue. However, this time, the seller determined that his 2023 was a killer year and his revenues and profitability were up over the previous years and demanded a new sales price of over $200,000 more than the originally agreed upon price. He was not going to extend past the January 31, 2024, date unless the borrower agreed to the higher purchase price. The seller was willing to wait for the audit to be completed and then put the restaurant on the market for a higher price. As you can imagine, the borrower who had spent money and not to mention spent all this time waiting and really wanted this restaurant was devastated.
After pleading with the seller and trying to push the state auditors (which we all know went nowhere), we jumped into action, obtained short term interim financing and on January 31st much to the seller’s dismay and disappointment, the borrower was able to close on the transaction and took possession of the restaurant. The bank converted our loan from business acquisition financing to a debt refinance and we closed. The sales tax certification issue was resolved because now the borrower owns the restaurant under a totally different operating company and sales tax ID number so a certification was obtained.
The other good news is that the updated valuation we had to obtain due the time passing came in $479,000 higher than the borrower’s purchase price due to the higher revenues and profitability in 2023. The borrower and the bank are happy.
Lynne Singletary
First Vice President
44 Business Capital
lsingletary@berkshirebank.com
Business Brokers in the Digital Age: A Toolkit for Seamless and Convenient Communication
In late 2005, fresh from getting shown the door at my last “real job” I entered the world of business brokerage. Eager to get after working I hurried to attend training in the Old Transworld Office in Fort Lauderdale. I sat in class with Frank Feiler and listened intently to the wisdom imparted from the likes of Tom Jones, Peter Berg, and Andy Glasgow.
In addition to the wealth of wisdom shared from these folks, my class of 8 got introduced to the Business Brokerage Press and the man known as “The Old Pro” Russ Wright. Wrights lessons cover cold calls, servicing, down payments, and seller financing. I consumed it like a thirsty camel storing up for a long trek into the deserts of Arabia.
Well now some 18 years ago, I am considered by some an “Old Pro” so I want to add to the lessons. This time it will be on Communication:
Classic Channels, Modernized:
- Phone: While it might seem old-fashioned, phone calls remain a crucial and personal way to connect, especially for important updates or sensitive conversations. Tools like call recording and transcription can enhance efficiency and documentation. Check out for Example Otter Ai which syncs to email and records transcripts of calls and meetings into text. But above all answer the phone. I continue to get feedback from customers who are shocked that I answer my phone personally.
- Email: Email continues to be a reliable platform for sending documents, sharing listings, and maintaining a record of communication. Utilize email automation tools for personalized mass communication and drip campaigns. Auto Reply, Auto NDA systems, Video Emails (Check out Vidyard).
Mobile-First Messaging:
- Text Messaging (SMS): Instant, convenient, and widely used, texting allows for quick updates, appointment confirmations, and informal communication. Consider platforms offering group messaging for streamlining communication with multiple parties.
- Messaging Apps: Popular apps like WhatsApp and Telegram offer features like voice messages, video calls, and file sharing, providing a versatile communication channel for on-the-go interactions. Very popular in other countries due to dynamics like the EU, you as a broker need to look outside your world and see how your consumer likes to communicate.
- Social Media: I am blessed to have children that range from 13 to 22. Do yourself a favor and observe how they communicate. Group Chats, Snapchat, Instagram Messaging, and the ever present and ominous Tik Tok are continuing to evolve and serve as messaging tools. Understand who your customers are (demographically) and recognize they communicate in ways comfortable to them…it is your job to receive the communication and not judge it.
Visual Engagement Platforms:
- Video Conferencing: Tools like Zoom, Google Meet, Teams enable virtual tours, consultations, and meetings, overcoming geographical limitations and offering flexibility for clients with busy schedules. We should take a lesson from our Realtor friends and develop video walkthroughs of listings to be provided upon execution of NDA and available on private links. I predict Video CIMS, Video Tours, complete with Audio and even seller video interviews to drive efficiency and speed.
- Social Media: Utilize platforms like Facebook, Instagram, and YouTube to showcase listings, share market insights, and engage with potential clients through visually appealing content. Some folks are already attacking these tools like Andy Cagnetta with The Deal Board and Jim Parker. Platforms like reddit, substack, and quora are other non-traditional information resources we can use to communicate to customers.
- Social Scheduling: Buffer, Hootsuite, Soci et al are scheduling tools we can use to proactively communicate to customers and audiences. We can even train and
Collaboration and Productivity Apps:
- Project Management Tools: Platforms like Asana, Slack and Trello help manage tasks, share documents, and collaborate with clients, ensuring everyone is on the same page throughout the transaction process.
- Client Relationship Management (CRM) Systems: These systems centralize client information, communication history, and tasks, facilitating personalized communication and efficient lead management. Deal Studio and Deal Relations are just a few of the off the shelf tools. But I tell you what… it is not the software, it is the process. There are ample tools within the Google Suite of extensions that you can efficiently manage our business through that economically.
Emerging Technologies:
- Virtual Reality (VR): Offer immersive property tours to remote clients, showcasing spaces in a unique and engaging way.
- Augmented Reality (AR): Utilize AR apps to virtually stage properties or overlay listing information onto real-world environments, enhancing client visualization.
- Bard/Gemini and Chat GPT: We have all heard of it and if you are not trying it out you are standing…strike that…laying down. It is here to stay and can create speed for you in your work products from CIMS, to Listing blurbs and correspondence.
Choosing the Right Tools:
The best communication tools will depend on your individual preferences, clientele demographics, and the specific needs of each transaction. But unlike the world, “The Old Pro” wrote about how our world is changing by the minute. New tools and trends for communication emerge and evolve and you must evolve your communication tools as well and master them early. Experiment with different options, track their effectiveness, and tailor your communication strategy to optimize client engagement and satisfaction. Remember, effective communication goes beyond just choosing the right tool; it involves building rapport, being responsive, and tailoring your message to each individual client.
By mastering these diverse communication tools, business brokers can become true masters of connection, building lasting relationships and achieving success in the ever-evolving digital brokerage landscape.
Michael Shea
CBI, CMAP, BCI
How to Save a Deal
Few business owners truly understand the complex dynamics of making a deal. Having never participated in selling a business before, the majority of business owners are blissfully unaware of what it takes to turn the dream of selling a business into a reality. Having a brokerage professional by their side is an easy way for a business owner to avoid the dangers that can easily torpedo a deal.
Keep Your Eye on the Ball
One of the most common reasons that businesses will fail to sell is that the business owner becomes obsessed with the pending transaction, and in the process, fails to keep up with the day-to-day operations of the business. The sales process can take months, or even years, and that means that the owner needs to pay attention to every aspect of their business or a prospective buyer could become very concerned.
Keep Confidentiality a Top Priority
Another mistake that business owners can make, one that will quickly kill a deal, is a breach of confidentiality. If the sales process involves too many parties, then confidentiality often falls apart. Often the owner will call off the deal in frustration. A business broker or M&A advisor understands the tremendous importance of maintaining confidentiality and will prevent leaks from occurring.
Seek Out Another Perspective
Being the boss for years, or even decades, means that a business owner may become rather set in their ways. Commonly, business owners may become rigid where compromises are concerned, especially when it comes to their business. As a result, a business owner may wish to negotiate every single item and detail which can send buyers running for the door. Some fights make sense and others should be avoided. Everyone can benefit from this essential third-party perspective, and this is another of the important ways that business brokers can help sellers.
Prepare Early
It can take years to properly get a business ready for sale. All too often, business owners will not prepare for the sale of their business until the 11th hour. Some business owners may even decide to sell on a whim or because of burnout. Unless a business owner prepares for the sale of their business well in advance, the business is unlikely to be ready to be sold.
A business broker or M&A advisor knows precisely what it takes to get a business ready. For example, some areas that are particularly important for business owners considering selling a business are buying out minority stockholders, dealing with any pending lawsuits and cleaning up their balance sheet.
Keep Your Pricing Realistic
A fifth deal killer comes in the form of placing too high a price on a business. It is understandable that a business owner wants to receive top dollar as a business usually represents an owner’s life work. However, an unrealistic asking price can quickly destroy any chances a business has of being sold. A business broker can work with or without an appraiser to achieve a fair and realistic price and in the process dramatically increase the chances of a successful deal.
Buying or selling a business can have many twists and turns. Working with a brokerage professional stands as one of the simplest and most effective ways to avoid problems before they arise and, in the process, save the deal.
Copyright: Business Brokerage Press, Inc.
The post How to Save a Deal appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
How Business Owners Can Leverage AI
Artificial Intelligence has certainly received more than a bit of attention in the last two years. It’s no wonder that many business owners wonder how best to use this tool to gain an edge over the competition.
Currently, the cost of ChatGPT-4 is only $20 per month, which is a very nominal cost considering its capabilities. For that cost, users gain access to a powerful large language model or LLM. ChatGPT-4 allows users to put in a prompt and quickly receive an answer. Since ChatGPT-4 is a neural network, it is possible for you to customize how data is generated.
An AI Virtual Assistant?
Almost anyone can appreciate the benefits a virtual assistant can bring. With ChatGPT-4, it is possible to use the technology as a digital VA that can simulate the work you might otherwise need to hire people to do. AI tools have become better and better at providing pinpointed information. More and more, business owners are viewing artificial intelligence as a tool that can serve the function of a virtual assistant or in some cases even a trusted business advisor.
One example of how you could leverage ChatGPT-4 is to help you with your website’s SEO. Instead of hiring an expert, AI can assist you by generating lists of valuable keywords and SEO instructions.
Other ways business people have used ChatGPT include everything from customer services and support to employee training. Its functionality is incredibly versatile and can serve many niches.
Creating GPTs
GPT stands for “Generative Pre-Trained Transformer.” This term basically refers to a language model and framework used for artificial intelligence. This type of AI uses neural networks for tasks that involve language.
Through GPTs, people now have the ability to create assistants or bots. To date, over 20,000 GPTs have been created. These are highly specific programs that have the ability to use internal data in ways that users deem fit. The more refined the prompt you put in, the more precise the information that you will receive.
Another tool that could be helpful to business owners is Voice Chat GPT, which can transcribe what you are saying in real time. There is also Visual Chat GPT, which can verify visual information, for example, identifying the type of bird in a photograph.
Creating Personas
In order to get the most out of ChatGPT-4, you can prime it and tell it what you want and need. Through ChatGPT-4, it is possible to create “personas” to bounce ideas around and get different information and feedback. For example, it is possible to create CEO and marketing manager personas, to name just two. The information you receive will differ depending on the persona you turn on. Different information and responses will then be generated via these different personas. This tool allows you to ask and receive responses on a wide variety of business-related questions.
Protecting Information
One word of caution in using these tools is to be careful regarding importing confidential information into ChatGPT or other AI tools. While efforts may be made to keep information confidential, it is still possible that other companies will use this information for training purposes. Any sensitive information about your business, employees or customers should be carefully guarded.
The bottom line is yes, you can use AI to improve and expand your business, and you can start doing this right away. It’s important to note that artificial intelligence is a fast moving and evolving technology. For that reason, the way you can utilize it today may be entirely different in the coming years.
Copyright: Business Brokerage Press, Inc.
The post How Business Owners Can Leverage AI appeared first on Deal Studio – Automate, accelerate and elevate your deal making.