My Unique Selling Proposition by Bill Roberts

My Unique Selling Proposition by Bill Roberts
My primary business is the sales of small businesses and/or commercial real

estate.
Everybody thinks business opportunity sales are easy. Well, it is true that

finding a potential buyer for a business is easy.
But the trouble starts almost immediately after the offer (letter of intent or

LOI) is signed. Most "deals" never close.

Most Deals Don't Close
You can check the statistics. It is reported that less than 10% of opened

escrows conclude with the transfer of ownership. Most are canceled or die

because the parties disagree about something. Something that should be

resolved, but isn't. Sometimes, but rarely, they die because the buyer doesn't

have sufficient funds or can't obtain adequate financing.
Usually the reason for the failure of the escrow is because things pop up

during the "Due Diligence" period which lead to conflicts between the buyer

and the seller.
As an example, the seller stated before the LOI was submitted that he made

a certain amount of money. During the due diligence the buyer "discovers"

that the seller lied or at least exaggerated or "multiplied" his best month times 12.  You would be surprised how often this happens. The buyer may still be interested,

but at a lower sales price. As part of this re-negotiation, the buyer will accuse

the seller of deliberately misleading the buyer. The ensuing discussion

becomes very personal. The seller ends up "hating" the buyer. This deal will

undoubtedly fail to close.
Even if the seller agrees to a price reduction, he will harbor ill-will towards

the buyer for whatever the buyer said to him to get the price reduction. The

buyer depends on the seller to "help" him get off to a good start. After all,

one of the "things" he is buying is the seller's knowledge base.
Discussions about this help from the seller will turn sour if the seller is

unhappy with the buyer.

Dual Agent
I generally represent both parties to the transaction because if another broker

is involved, the chances for un-resolvable disputes is magnified. The other

broker will "push" for concessions so that he can demonstrate his "value" to

his client. This adversarial posture kills more deals than it saves.
As the only broker I practice "dual agency" because I believe both parties

deserve representation. Some business opportunity brokers represent only the seller and leave the buyer unrepresented. Not fair. The goal for each party needs to be the same: to

conclude the transaction with a change of ownership at the optimum price.
If either party wants to benefit at the expense of the other, I can't represent

them. They need to negotiate in good faith. One wants to sell, the other wants

to buy.
If one wants to "steal" or the other wants to "unload" a white elephant to an

unsuspecting buyer, then I can't be involved.
I explain my position to the seller before the property (or business) is listed. I

get his written agreement to the process.

I do not establish the price or terms. I explain to the seller that the final sales price will be negotiated with the buyer AFTER the DUE DILIGENCE period. The Offer Price (the LOI) will most likely NOT be the selling price. It is just a starting point for the process.
I explain my position to the buyer even before I let them look at the property.

I do not get an exclusive agency agreement with the buyer. If they involve

another broker the deal will probably fail. That is the history and the

experience.
On the other hand, if I am the dual agent my "job" is to bring the transaction

to a close that is mutually beneficial. I shepherd the deal through escrow. I

mollify hurt feelings. I negotiate on the basis of what is in the best interests

of all parties and what is uncovered during the due diligence. At one time or another each will think I am "representing" the

other, but when all is said and done, the transaction will close. My success

rate is above 80% compared to an industry average of less than 10%.