When you first start out in business brokering, you’re aware of the statistics of failure. 90% failure rate is intimidating so one can assume that for someone to even attempt to get into the business they have to be aggressive, confident and determined. In the beginning you’ll take almost any kind of listing to get your business moving but over time you realize the sense in being a little more discriminating. I use the word discriminating in its most positive use, choosing listings with cleaner books and records, believable sellers etc.
I'll never forget one of the first listings I ever took. I met with woman who sold me this sob story about how her husband had a gambling problem and after leaving her destitute, with her two kids, had run off (whereabouts unknown). Now after only owning the business 6 months she was forced to sell her little cafe. Then she insisted on an open listing agreement. I wasn't happy about it but the combination of empathy and desperation was fatal and I gave in.
I sent many people there but the fact she had only been there 6 months and there was something odd about the lease turned people off. One day I called her to check in with her and she informed that she sold it. I was shocked, as I had to call her to find this out. I asked her if she opened escrow and she informed me that she and the buyer had opted to not go through escrow. I asked the purchase price and then informed her that it was illegal to not go through escrow according to the bulk sales law, she didn't seem to care. It irked me and I vowed to not take any more listings like that. I want to work with my seller not view him or her as my competitor.
About 5 months went by, then one day I was in a meeting and a strange number came up on my cell and I was compelled to see who it could be, 000-0000. It was the justice department; they wanted to know what my involvement was in the listing of this little cafe. I told them what I knew, of course. They informed me that this woman was a professional con artist.
This woman's husband had a job in a flower shop where he process telephone orders. Except that he opened a very similar credit card account for himself and was filtering the money into his personal bank account, his wife, his accomplish. When I met her to take the listing she knew exactly where her husband was - in jail! She racked up tons of bills and then declared bankruptcy but she listed the little cafe as having no value to her trustees, then she sold it to a unsuspecting older lady and convinced her to not go through escrow to save a couple bucks, silly move. The buyer then became liable for the sellers debts associated with the business and it became a huge nightmare for the buyer. When I spoke to the district attorney's office they planned on prosecuting her. I’m not sure whatever became of this woman but if she did have children (that could have been a lie too) I feel sorry for them.
It was a good lesson for me to learn early on in my career. If it doesn’t feel right, don't take the listing. There are plenty of good people out there, just exercise a bit of patience and you’ll find them.
About The Author: Christina Lazuric is an Orange County Business Broker who shares her broker experiences with BizBen readers and has had varied direct small business experience in the past but now assists small business owners sell their business and offers business buyers find their dream business to operate. Phone Christina direct at 949-257-7823.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services
Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.
|Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses
Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.
|Helen Yoo: Escrow & Bulk Sale Services - Southern California
New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.
|Diane Boudreau-Tschetter: Escrow And Bulk Sale Services
California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.
|Peter Siegel, MBA - SBA Loans, Non SBA Financing Assistance
For over 25 years I have provided niche business purchase financial advisory and loan placement services with SBA and Non-SBA Loans, Retirement Plan Conversions, Private Investors, etc. Financing amounts available: $20K to $7MM. Call today to get pre-qualified or receive financing: 866-270-6278.
|Joanne Weber, Broker - Preschool Specialist - Southern California
The Ryan Craig Company is in its 35th year as the recognized expert in Southern California, dealing exclusively in the sale of preschools, Montessori schools, day care centers, and private schools. Our extensive list of references speaks for itself. Phone Joanne at 818-760-3684 for more info.
|Chuck Post: Laundry Buyer Representation, Consulting, Due Diligence
Chuck Post has 32 years experience in the laundry industry, specializing in assisting laundry buyers (and entrepreneurs) with buying or starting up, building, re-tooling, laundries throughout California. Laundry buyer representation, consulting, due-diligence, lease negotiations, laundry valuations.
|Brad Steinberg, Broker - Laundromat Specialists
PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.
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