Orchestrating the progress of the BBF as usual, the Board of Directors met on the 22nd of September 2023, in the first in-person session since 2019. It was the first of many future third-quarter face-to-face board meetings. The meeting format was scheduled where the board of directors met in the morning half of the session. Then, the afternoon session was open to all members. It was a pretty good turnout for the open session, with many of the BBF’s top business brokers in attendance, asking questions and providing welcomed suggestions.
Shaping the Future of the BBF
We had a full slate of items that needed to be discussed. Some of these items spun off into committees and task forces requiring further in-depth review and discussions to bring back to the board. Beyond the usual financial and Executive Director reports, we had a few items of note. Still, the one that stands out the most is the approval of the agreement and the funding for next year‘s BBF conference at the Caribe Royale in Orlando on August 24 and 25. Many exciting things are happening in the BBF that will soon be announced, so I encourage you to watch for communications through our newsletters and emails.
One item brought up for discussion and unanimously approved by the board was to re-classify/re-name our organization and the wording and acronym that we use to describe our association’s functions from an MLS to the BLS. For many years, we have been utilizing the URL BBFMLS.com. However, MLS or “multiple listing service” is something that typically represents residential or commercial real estate. The BBF, owning the BBFBLS.com, makes it official that we are a Business Listing Service. We start BBF down the path once again as a leader in the industry with the first official BLS in the world.
During the open session of this meeting, we took nominations from across the state district by district. As it was ratified a few years ago in our bylaws, the election process for the BBF Board of Directors and District Advisory Committees now would be conducted by a nomination by individuals across the state for each district. When we implemented this change, we voted as a board to allow any BBF member to sit on the Board of Directors, not just a broker of record. This change allows many more individuals to step up and get on the ballot this year. I’m excited to see this year‘s nominations go out for a vote. You’re going to see a lot of great brokers. Step up into leadership positions to help shape the future of the BBF. So, watch for the election ballot for your state board of directors and district advisory committees over the next few weeks.
What I truly love about being a part of leadership in the BBF is working with such great minds and experienced Brokers. I have built a strong relationship with each individual on the board for the past several years, and it’s good to know that we don’t always see eye to eye. It’s good that we challenge each other and our traditional thoughts so we can introduce fresh ideas. Even though we get along in many different ways, aligning our morals, ethics, and business attitude is critical. We continue to share insight with each other of our personal experiences and ideas to safeguard the future of the BBF and to put it in a stronger position for future leadership to maintain.
I couldn’t be prouder to be a part of laying out the plans for a better, much stronger BBF. I hope that at least one or two of you who read this decide you want to be a part of what makes our association the best. An individual can help out in many ways, even if it’s sitting in on a committee or a task force or dedicating a little bit more time and getting involved in leadership. I hope it encourages several of you to step up and be a part of the leadership and help shape the future of the BBF.
Joe Shemansky CBI, M&AMI, CM&AP
Chairman
Business Brokers of Florida
The Power of Specializing in a Niche
For years, I’d heard the saying: “The riches are in the niches.” Although I believed it, fear prevented me from truly adopting it in my business brokerage practice. I kept asking myself:
- Could I turn away listings outside my niche?
- How much revenue might I lose?
- What if specializing failed?
Though I often considered specializing, I’d revert to listing any business that came my way. However, I met brokers who thrived by focusing on a particular niche. Six years ago, I chose to specialize, and it became the best decision for me.
Why I Chose My Niche: I focused on heating and air businesses. My decision was based on my personal experience owning such a company and understanding its intricacies. I also relocated to a region with low sales volume in this sector. After thorough research, I realized there was potential. A niche doesn’t only mean focusing on an industry like HVAC; it could also be location-based, gender-based, or even based on specific buyer groups. The crucial aspect is to be perceived as the ‘go-to’ or ‘best’ in that niche.
Benefits of Specializing:
- Value Addition: Specializing ensures I deeply understand my clients’ businesses, which wasn’t the case when I was a generalist.
- Focused Marketing: My marketing budget targets a single industry, which increases its efficiency and visibility.
- Targeted Buyers: My potential buyer list has grown specific and valuable since switching.
- Industry Visibility: I participate in all industry events, making sure potential clients recognize me.
- Expertise: My specialization has positioned me as the industry expert, a strong selling point against competitors.
- Deep Knowledge: I focus solely on the nuances of the heating and air business, ensuring I’m always informed.
- Strong Online Presence: I’ve made sure that anyone looking for a specialist in my niche finds me first on all platforms.
- Building a Brand: Embracing a niche allows me to craft a clear and compelling brand narrative.
While I’m obviously biased, I genuinely believe in the value of specializing. If you’re contemplating narrowing your focus, I hope my journey inspires you. I’m here to assist, so don’t hesitate to get in touch.
Patrick Lange is with Business Modification Group based out of Horseshoe Beach, Florida. He specializes in the sale of heating and air companies nationwide. Patrick is the current North Florida Chapter President.
Patrick Lange
Business Modification Group
105 Reasons to Use a Business Broker to Sell Your Business
Selling your business will be one of the biggest decisions of your business life. It also takes a lot of time. Hiring a professional Business Broker, will help you in the process. Managing a business and selling a business are completely different skill sets. Selling a business requires extensive time, knowledge, confidentiality, deal forms, salesmanship, marketing, negotiating skills, and much more. I have documented my own process into 105 steps that most Business Brokers use to get the deal to closing. I consider these 105 reasons why you should hire a Business Broker to sell your business or help you purchase one. We do not all follow the same steps, but the basic process is the same.
Selling a business is not like selling a house. The average business takes 6-12 months to sell and involves a lot of different steps. A Business Broker can help present your company in the best light to maximize the sale price. He or she understands the key values that buyers are looking for and can assist in identifying changes that can lead to a better selling price. Every business is different, with hundreds of variables that have an impact on the value. Business Brokers have access to business transaction databases that can be used as guidelines or reference points.
Deal structure is also especially important as well as the financing. A Business Broker will be able to help negotiate a structure that is beneficial to both the buyer and seller. In addition, understanding the SBA lending rules takes a lot of time to learn, and most business owners do not know all the available options like a business Broker. A deal must be structured in a way that will qualify for lending if lending is involved.
Since the Business Broker’s sole function is to sell the business, there is a much better chance that a deal will be closed in less time. The faster the sale, the lower the risk of employee problems, loss of confidentiality, and customer defection.
A business owner should be aware that there are a variety of valuation methods available to a Business Broker. There is no one-size-fits-all approach when selling a business. Do not be impressed by the Business Broker who presents the highest listing value – you may only be setting yourself up for failure during the sale process. Determining the right selling price takes a lot of research and time. Setting the right price will have a big determination on the sale. I personally send the details of my “Brokers Opinion of Value,” to my clients. As a Business Broker, we must keep the seller’s expectation in check. If a Business Broker values a business at 1 million, but the seller wants 3 million, that is going to be a problem. This is a common issue Business Brokers encounter.
About Jeff Jump
Broker of Record
Jump International Business Brokers
Jeff Jump is the managing Business Broker of Jump International Business Brokers. Jeff previously owned and operated two printing companies for over 15 years. Jeff has a Florida Real Estate Brokers License and is a Certified Business Intermediary® with the International Business Brokers Association®. He is also a member of the Business Brokers of Florida® Association.
Web: www.jumpinternationalbusinessbrokers.com
Email: jeff@jumpinternationalbusinessbrokers.com
Toll Free: 1-800-314-1365
What Makes a Business “Sellable”?
I have been asked a thousand times what makes a good listing? My answer is simple – I want a business with potential to grow, that has three years of rising sales and profits, has perfect financial records and a highly motivated seller. If you can’t find one of them, you might take some listings that don’t quite check all the boxes.
It might be easier to list the things that can make a business not sellable. We have all run into these conditions – sloppy financials, lack of customer diversity, too much family working in the business. The list is long. At the top of the list are seller motivation and seller expectations. Many of the problems can be overcome if the seller is truly motivated and his or her expectations are realistic.
So many people will only sell one business in their life. Because of our association with real estate, many view selling a business like selling a house. It is not. While we share the same license, we are not real estate agents. We are business intermediaries. Our roles are different.
It is the role of the intermediary to set expectations. You are in charge of that! In my experience, expectations must be set before taking the listing. I recently closed a transaction that I worked on for three and a half years. The sellers would not budge on their price (50% above my initial valuation). Under no circumstances would they hold a seller note. They had to have a buyer with direct industry experience. They also had no financials when I met them 3.5 years ago. I was able to keep the listing and achieve success because the seller’s expectations were set. I told them at the beginning this would not be quick. I educated them about the valuation and what was driving that number. I connected them with an accountant and told them to keep running the business. If you continue to grow the business, it will eventually be worth your asking price. They did and it worked.
Usually, the biggest expectation we deal with is price. If my valuation says $500k and the seller wants $1.5 mil, the meeting is over – call me if you need my help. I think it would be unethical – as a professional – to take a listing far above my valuation. By taking that listing you are telling the seller it is possible. That feels like misleading to me.
You can make your listings more sellable. Set reasonable expectations at the beginning. Dig in deep and find the issues that could be a deal stopper. Be prepared to explain the issues and propose solutions. Stay in close contact with your sellers. Update financials monthly. They need to show growth even if it is modest. The trend (direction) is critical.
Your knowledge and training brings a lot of value to the transaction. They can’t do this without us.
Happy selling.
About John W. Hoyt Jr.
Owner
Goldcrest Commercial
Goldcrest Commercial is owned and managed by John Hoyt, Licensed Real Estate Broker. John was first licensed in California in 1975 and obtained a Florida license in 1987. In 1995 John acquired AAA Business Brokers and merged with Goldcrest in 2001. In prior careers John was a Commercial Division Manager for a large national real estate firm overseeing the activities of 10 or more commercial and business brokers. While working as a lender John originated and closed over 500 loans – many to small business owners.
Since joining the industry John has served on State and local Boards of Directors for both Florida Business Brokers Association (FBBA) and Business Brokers of Florida (BBF). He has been recognized as a million dollar plus producer multiple times since 1996 and was recognized as Top Producer Statewide in 2006. John has owned and operated businesses in both the manufacturing and service industries.
To Co-Broke or Not to Co-Broke, Which Will It Be?
Suppose it were possible to simplify what we do as business intermediaries. In that case, we would be best described as trusted advisors or confidential facilitators between the buyers and sellers of a business deal. One of our many objectives is to help business owners sell their businesses for the best possible price while ensuring buyers get a good deal. In some cases, however, a single intermediary may find it challenging to provide their clients with the best possible service. This is where co-brokering comes in.
I understand that co-brokering is not a popular idea for many intermediaries throughout the world. However, for the Business Brokers of Florida® (BBF) is not only a governing rule of our association; it is a proven fact that co-brokering completes more deals for buyers and sellers. Additionally, this is confirmed in the numbers where almost thirty percent of the deals completed in the BBF in 2022 were co-brokered between our members.
For the unknowing public, co-brokering is a process where two or more intermediaries work together to facilitate the sale of a business. The benefits of co-brokering are numerous, and they can help both intermediaries and their principals. One of the main benefits of co-brokering is that it allows intermediaries to pool their resources and knowledge to provide better service to their buyers or sellers. For example, if one broker has more experience in a particular industry, they can share their expertise with their co-broker, allowing them to provide better advice to their principals.
Another benefit of co-brokering is that it will allow intermediaries to reach a wider audience. However, this mindset could be overlooked by an intermediary who is more concerned about splitting the deal. By working with another intermediary, they can tap into a larger network of contacts and potentially reach more potential buyers. This could be particularly useful for an intermediary who may not have a strong presence in a particular geographic area or industry. This is also an added benefit when an intermediary doesn’t have a specific type of business for a buyer in their inventory, allowing options of co-brokering other firms listings.
Co-brokering can also help intermediaries manage their workload. As many of us have experienced, selling a business can be time-consuming, and it can be challenging for a single intermediary to manage all aspects of the transaction. By working with another intermediary, they can share the workload, allowing each intermediary to focus on their strengths and provide better service to their buyers and sellers.
Additionally, co-brokering can help brokers mitigate risk. Selling a business involves a significant amount of money and many legal and financial factors that are to be considered. By working with another broker, brokers can ensure that they follow all necessary procedures and that their principals and the firms, are protected throughout the process.
Co-brokering can help brokers build stronger relationships with buyers and sellers. By working with another intermediary to sell their business, buyers and sellers may feel they are getting more attention and support. It can help build trust between the principals and intermediaries, leading to future business opportunities.
In conclusion, co-brokering can be a highly beneficial arrangement for business intermediaries. It allows them to pool their resources and knowledge, reach a wider audience, manage their workload, mitigate risk, and build stronger buyer/seller relationships. By working together, intermediaries can provide better service, ensuring buyers and sellers get the best possible deal.
To all my fellow business intermediaries out there, do you co-broke? If not, why?
Joe Shemansky CBI, M&AMI, CM&AP
Chairman
Business Brokers of Florida