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October 21, 2009 www.cabb.org
New Membership Requirements
October 21, 2009
Are You Scared?
By Gary Bayus, CBI, CBB
Are you as tired of hearing "In these economic times..." as
I am?
What will tomorrow's "Panic of the Day" be?
Terrorist? If not, then some new disease, or an
earthquake, or a tsunami or a hamburger from at fast food
joint?
One thing in common for most, if not all "Panic of the
Days" is that the proposed solutions empower and/or
enrich those who exploit the fears of others. The first
question to ask is: who benefits from "Panic of the Days"
and negative reporting?
Case in point #1: The Wall Street Journal published an
article April 18, 2006, titled "Scientists Who Dissent from
Climate Change Alarmism Are Censured by an Iron
Triangle of Climate Scientists, Advocates, and Policy
Makers," by Richard Lindzen. It says scientists rely on
research grants and scientific journal citations for career
advancement so they tend to deliver what grant
committees and journal editors want. If the scientists want
federal funding they had better be working on research
that confirms human activity endangers the planet.
Lindzen states "ambiguous scientific statements about
climate are hyped by those with a vested interest in alarm,
thus raising the political stakes for policy-makers who
provide funds for more alarm to increase the political
stakes..." Meanwhile the scientists supporting the culture
of fear can be certain of receiving funding.
Do I not believe global warming is caused by man? I
believe it is OK not to have an opinion about everything.
Case in point #2: An Investor's Business Daily article
dated April 13, 2007, "Sarbanes - Oxley Is Outsourcing
U.S. Leadership," by Kay Bailey Hutchinson, claims the
media induced panic over accounting scandals had
Congress responding without serious economic analysis.
The American Enterprise Institute reports that Sarbanes -
Oxley has cost U.S. business more than $1.1 trillion,
which adds about 9% to the cost of every product and
service produced in the U.S.
True or false? I don't know I haven't researched it.
Psychology Professor Paul Slovic says, "It is easier to
scare than to unscare. We trust people who tell us we're
in danger more than people who tell us we are not in
danger."
TV relies on scary stories to attract ratings. Newspapers
and magazines depend on scary headlines to drive sales.
Stop parroting what you hear or read, and do your own
research from numerous sources, then form your own
opinion. Most important, stop saying "In these economic
times...." It scares me!
The opinions, beliefs and viewpoints expressed by the
various authors for this newsletter do not necessarily
reflect the opinions, beliefs and viewpoints or official
policies of the California Association of Business Brokers.
California Association of Business Brokers | 1215 K Street Suite 2290 | Sacramento | CA | 95814
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Social Media for Business Brokers
By Gary Bayus, CBI, CBB
Prestige Business Sales and Acquisition
In this time when social networking is rampant, I am divided between my loathing and devotion to the medium. On the plus side, there has never been a better time in business brokerage to build your brand and to finally be able to explain to the layman, what it is that we do. This social networking works and at no cost to you. If you haven't become "Myselfish" (which means to constantly update your Facebook page), then I hope to impart some words of wisdom on how to market using social media.
Facebook - A couple of months ago, I couldn't figure this site out, now I am compulsively on it. In the last couple of years, <http://www.facebook.com/> Facebook has gone from a college photo-sharing site to a burgeoning business networking platform for self-promotion, advertising, and multimedia interaction. Facebook users can send each other virtual presents, create and host events, advertise their businesses through social ads, and more. When Charlie Gibson <http://onlyabill.com/2008/01/05/abc-facebook-democratic-debate-january-5-2008/> hosted the debate for the 2008 presidential candidates along with Facebook, the little networking site became a powerhouse in the online-marketing community.
For the uninitiated, Facebook is a social networking site where you must accept people as your friends (for your personal site) and you tell everyone what you are doing. It is also a place where you can have a webpage full of information regarding your business brokerage. Unlike the expensive websites, Facebook offers a "Fan" page where you can list designations, services, contact info and more. It also has a discussion board where you can have an open and honest communication with customers.
I have had two clients with brick and mortar businesses use Facebook exclusively with great results. Take your time, spend a moment looking at other businesses fan pages and you will get the idea. It is a completely new way of thinking, but it works.
Twitter - Twitter is a mini-blog (you can only post 140 characters at a time), that can be posted without Internet service. Most postings are sent to the followers via text message or you can opt for e-mail. For those of us with a Smart Phone, Twitter has become an addiction. My wife has had Twitterhea (an over dose of Twitter) for a while now. For her, a working author and food critic, it is heaven. When we were in San Francisco for the CABB Annual Convention, she was eating at six restaurants a day. It is as if her followers are on the trip with her. You can name your Twitter account your brokerage name, so your real name need not be mentioned. To build a following, go to other Twitters and ask them to follow you.
Blogging - Blogging is a very personal thing, but if you are a business broker, than each day you have a new story. I use Google's Blog Spot, but there are many other free services. You can make up the rules on who can see your blog and find like-minded people thru search. Even if you don't feel like you can write, it is a way to let the public see what makes you and your brokerage special. That kind of personal branding has never been available. You might find that you attract more like-minded clients, therefore making daily life as a broker more tolerable.
E-mail campaign - I ask all buyers and sellers to give me their e-mail address and use it to promote new listings, price reductions, etc. The content of the e-mail is new listings with a brief explanation and a link to a funny YouTube video. This ensures that the e-mail will become viral (like the flu, spreading from person to person) and brings in new buyers and sellers. I choose a funny dog or cat video so I never offend. I have as much fun searching for my monthly video, as they do watching it and spreading it around. This e-mail list grows because it has an opt in link at the bottom, so people who want to be part of my special offers and twisted sense of humor can join in.
Chamber mixers and social clubs - As old fashioned as it seems, sometimes a little face-to-face with the business people of your community is all the marketing you need. In addition, at these chamber events there is always free food and drink. I always take a sheet of "make-up" stamps, paperclip them to my card and give them away to everyone I meet. With the post office consistently raising the price of stamps, no one knows how much stamps costs these days. Giving out free stamps is like handing people money. They are shocked, delighted and feel they owe you, even though it is only 40 cents. If you handed someone two quarters they would be insulted, but given free stamps they go all wiggly in the knees.
Also, put yourself out there as a guest speaker to networking groups (like Rotary, Lion, Toastmaster, Realtor groups, etc.). I recently spoke at a Rotary meeting regarding preparing your business ready to sell.
It is a brave new world out there, so embrace the new social networking and get the word out!
The opinions, beliefs and viewpoints expressed by the various authors for this newsletter do not necessarily reflect the opinions, beliefs and viewpoints or official policies of the California Association of Business Brokers.
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California Association of Business Brokers | 1215 K Street Suite 2290 | Sacramento | CA | 95814 |
Press Release
June 18, 2007
Gary Bayus Named Top Ten Business Brokers in California
Gary Bayus, CBI, CBB of Prestige Business Sales and Acquisitions in Pismo
Beach, attended IBBA® conference at the Memphis Cook Convention Center in
Memphis Tennessee on June 3 - 9, 2007. The semi-annual conference offered
classes, receptions, workshops, and courses designed to allow the
opportunity for advancement in the field of Business Brokerage and Mergers
and Acquisitions. Gary Bayus instructed programs that count towards the
designation of Certified Business Intermediary (CBI). His class focused on
how to creatively advertise and sell small to middle market businesses.
“Gary is one of our most creative and innovative business brokers. We are
excited that he would share his knowledge in teaching this workshop to
other businesses brokers.” Sited Gary Andersen, President of California
Association of Business Brokers. “It was also my pleasure to announce that
Gary has been named as the ‘Top Ten Business Brokers in California’, he is
an inspiration to us all in this profession.”
The International Business Brokers Association ® (IBBA ®) is the largest
international non-profit association operating exclusively for the benefit
of people and firms engaged in the various aspects of business brokerage
and mergers and acquisitions. Today, the IBBA has more than 1,800
cooperative business brokers and intermediaries across Canada, Mexico,
Asia, Europe, Australia and the United States.
Mr. Bayus has been an advisor to owners of privately held companies,
institutional and private investors. His business dealings primarily focus
on business sales, acquisitions and mergers. His specialty is closely held
companies in which annual sales are usually less than $10 million. His
advisory engagements have entailed a wide array of clients in the
manufacturing, distribution, and service industries.
For more information, contact Prestige Business Sales and Acquistions at
(805) 773-5447 or at gary@garybayus.com.
Coast News
Selling Your Business?
Follow These Ten Commandments to Avoid Wrecking the Deal
1. Place a reasonable price on your business. Since an inflated figure either turns off or slows down potential buyers, rely on your business broker to help you arrive at the best "win-win" price.
2. Carry on "business as usual." Don't become so obsessed with the transaction that your attention wavers from day-to-day demands, affecting sales, costs, and profits. Since the selling process could take as long as a year, the buyer needs to keep seeing a healthy business.
3. Engage Prestige Business Sales to insure confidentiality. A breach of confidentiality surrounding the sale of a business can change the course of the transaction. Expert Business Brokers can channel the process and the parties involved to keep the sale within safely silent bounds.
4. Prepare for the sale well in advance. Be sure your records are complete for at least several years back and do all pertinent legal or accounting "housecleaning"--as well as a literal sprucing-up of the plant or store.
5. Anticipating information the buyer may request. In order to obtain financing, the buyer will need appraisals on all assets as well as information to satisfy environmental regulations (when real estate is concerned).
6. Achieve leverage through buyer competition. This can be tricky; you are wise to let your business broker, as a third party, create a competitive situation with buyers to position you better in the deal.
7. Be flexible. Don't be the kind of seller who wants all-cash at the closing, or who won't accept any contingent payments or an asset transaction. Depend on the advice of your business broker--their knowledge of financing and tax implications-- to keep the deal sweet instead of sour.
8. Negotiate; don't "dominate." You're used to being your own boss, but be prepared to learn that the buyer may be used to having his way, too. With your business broker's help, decide ahead of time when "to hold" and when "to fold."
9. Keep time from dragging down the deal. To keep the momentum up, work with your business broker to be sure that potential buyers stay on a time schedule and that offers move in a timely fashion.
10. Be willing to stay involved. Even if you are feeling burnt-out, realize that the buyer may want you to stay within arm's reach for a while. Consult with business broker to determine how you can best effect a smooth transition.
Article Run on 11-15-04
PREPARING YOUR BUSINESS FOR SALE
As a Business Broker I am often asked “How do I know when I should sell my business?” Businesses are sold for as many reasons as there are reality TV show ideas: serious illness, death, divorce, partnership disputes, retirement, burn-out, financial trouble(“You’re FIRED!” comb-over-man), competition moving in next door, a three hour tour turns into a shipwreck on an unchartered desert isle, and plenty of other devastating issues. If you wait for one of these unfortunate events to force you to sell, then you will probably not receive top dollar. Sell when you want to, not when you have to!
The first step in preparing your business for sale is mental. You must be psycologically ready. The decision to sell is usually an emotional one. Project into the future what you will be doing after your business is sold. But heed these words-“Occupational hazard be when no occupation around!” Will you be so bored you become depressed? If you dream of doing “nothing”, there will come a time when you will have to do something. Let’s face it-your ego and identity is intertwined with your business and selling it means reinventing yourself. Start reinventing now because plans to sell should start at least one year but preferably three years in advance.
Step 1-Commit to selling and commit to keeping your mouth shut. Confidentiality is critical. Do not share your plans with anyone.
Step 2-Review your lease. Will it expire or need to be renegotiated at the same time you plan to sell? The longer the term remaining in your lease the more valuable it is to the buyer, providing that it is transferable. Any equipment leases will require the same scrutiny. Have most of the tax benefits already been utilized? Analyze all leases from a buyer’s perspective. Any leasehold improvements you have made to the property should be itemized and listed as a separate asset.
Step 3-List your assets. This will include land and buildings; machinery, equipment, furniture and vehicles; accounts receivables; contracts; customer lists; patents and copyrights; licenses and permits; intangibles; and goodwill.
Step 4-Get financials in order. Last three years of Profit and Loss Statements, tax returns and a current balance sheet
Time to Sell Your Business
December 3, 2004
Do you think you are ready to sell your business? You should use a Business Broker, not just a real estate agent for the best possible results and a smooth transition. He is your business friend and will make a difficult time easy and even fun. Here is why.
A Business Broker is a specially trained licensed real estate agent. They are professionals who will facilitate the successful sale of your business, making the difference between just getting rid of the business or selling it for the very best price and terms.
A business broker can value a business correctly using financial statements, tax returns, equipment lists, leases and goodwill. They will have access to current detailed industry specific facts and trends. They can do a comparative market analysis. This report is complied from businesses in the same category as yours, in a very close proximity, sold in the last 3 to 6 months- that is more than likely zero. Absent of local business information the business broker will pull information from the state and narrow it down to price your business to sell and sell quickly!
A business broker can sell your business and at the same time keep it a secret! When you sell a home, the real estate agent will want to list all your details on the Multiple Listing Service for everyone, selling a business must be more discrete so you do not loss customers or key employees. It is a catch 22- but in the business market, the more people who know the business is for sale, the less the final selling price. People will think there is something wrong with it. Your employees might start to look for other jobs. Your suppliers might insist on stricter payment arrangements. Your competition will be ready to pounce on any opportunity. When done correctly, no one including your closest people will know what happened. One day you were the owner, the next day you were gone!
A business broker will have a file of serious pre-screened buyers that he has already spent time with to educate on the “process” of the sale. You won’t have someone walk in at your busiest time and say, “YO, is this joint for sale? How much? My check is in the mail.” The business broker will set up and oversee all meetings with potential buyers and will not waist your time with unqualified or under financed buyers.
If you have decide to sell your business and you already have an interested party, the business broker can help you with the structuring of the deal and to make sure that all your interests are secured. A good business broker will explain how seller financing can benefit both buyer and seller. Most sellers are unaware of how much interest they can receive by financing the sale of their business. Moreover, it tells the buyer that the seller has enough confidence that the business can indeed pay for itself!
The business broker can help with special licenses and tax permits that will need to be transferred, along with inventory control and employee transitions. A seasoned business broker is someone who has experience of owning and operating other business, he is your compadre and understands the emotional and business situation when selling and buying a business. When you are ready to sell- call a Certified business broker!
Gary Bayus of Prestige Real Estate is a certified Business Broker working in Pismo Beach. He can be reached at (805) 773-5447
Jan. 15, 2005
Still Thinking About Buying a Business?
Here are some more commonly asked questions by buyers along with responses based on my professional experience and knowledge.
What kind of business should I look for? Obviously, you want to consider only those businesses that you can afford with the cash you have available. In addition, the business you buy must be able to supply you with enough income — after making payments on it — to pay your bills. However, you should look at a business with an eye toward what you can do with to increase the profits — how you can improve and make it more productive and lucrative. There is an old adage advising that you shouldn’t buy a business unless you feel you can do better than the present owner can. It all depends on you!
How are businesses priced? Generally, at the outset, a prospective seller will ask the business broker what he thinks the business will sell for. The business broker needs all the financial information before a price can be suggested. Most sellers have some idea what their business should sell for — and this is certainly taken into consideration. However, the business broker is familiar with market considerations and, by reviewing the financial records of the business, can make a recommendation of what the market will dictate. A range is set with a low and high price. The more cash demanded by the seller, the lower the selling price; the smaller the cash requirements of the seller, the higher the price.
Since most business sales are seller-financed, the down payment and terms of the sale are very important. In many cases, how the sale of the business is structured is more important than the actual selling price of the business. Too many buyers make the mistake of being overly concerned about the full price when the terms of the sale can make the difference between success and failure.
What happens when I find a business I want to buy? When you find a business, the business broker will be able to answer many of your questions immediately or will research them for you. Once you get your preliminary questions answered, the typical next step is for the broker to prepare an offer based on the price and terms you feel are appropriate. This offer will generally be subject to your approval of the actual books and records supporting the figures that have been supplied to you. The main purpose of the offer is to see if the seller is willing to accept the price and terms you offered. There isn’t much point in continuing if you and the seller can’t get together on price and terms you offered. The offer is then presented to the sellers who can approve it, reject it, or counter it with their own offer.
If you and the seller agree on the price and terms, the next step is for you to do your “due diligence,” The burden is on you — the buyer — with the help of a savvy business broker (I supply a comprehensive check list). Once you have checked and approved all documents and terms, the closing documents are prepared, and your purchase of the business is successfully closed. You will now join many others who have chosen to become self-employed!
Gary Bayus of Prestige Real Estate is a certified Business Broker working in Pismo Beach. He can be reached at (805) 773-5447.
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