Tackling Growth Delusions When Buying a Business

There is no doubt about it, it can be exciting to buy a new business.  However, in the process, it is very important that you don’t become unrealistic about future growth.  Keep in mind that in the vast majority of cases, if a business is poised to quickly grow substantially, the seller would be far less interested in selling. 

Richard Parker’s recent article for Forbes entitled “Don’t Be Delusional About Growth When Buying a Business” seeks to instill a smart degree of caution into prospective buyers.  Parker notes that when evaluating a business and talking to the owner, many buyers come away with a sense that enormous growth is just “sitting there” waiting to be seized.  In particular, Parker cautions those buyers who are buying into an industry that they know nothing about; those individuals should be very careful. 

When buying into an industry where one has no familiarity, there can be a range of problems.  The opportunities that you see may not have been tapped into by the existing owner for a range of reasons.  You couldn’t possibly guess what these reasons might be without more of a knowledge base.  Since you are an outsider, you likely lack the proper perspective and understanding.  In turn, this means you may see growth opportunities that may not exist, as the seller may have already tried and failed.  Summed up another way, until you actually own the business and are running it on a day to day basis, you simply can’t make a proper assessment of how best to grow that business.

The seductive lure of growth shouldn’t be the determining factor when you are looking for a business.  A far more important and ultimately reliable factor is stability.  The real question, the foundation of whether or not a business is a good purchase option, is whether or not the business will maintain its revenue and profit levels once you’ve signed on the dotted line and taken over.  You want to be sure that the business doesn’t have to grow to remain viable.

As Parker points out, the majority of small business buyers will buy in a sector where they don’t have much experience, and that is fine.  What is not fine is assuming that you can greatly grow the business.  Of course, if new buyers can achieve that goal, that is great and certainly icing on the cake.  But don’t depend on that growth.

In the end, everyone has some ideas that work and some that don’t.  You may take over a business and, thanks to having a different perspective than the previous owner, are able to find ways to make that business grow.  But realize that many of your ideas for growing the business may fail completely. 

A professional business broker will be able to help you determine what business is best for you.  A business broker will help keep you focused on what matters most and steer you clear of the mistakes that buyers frequently make when buying a business.


Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Copyright: Business Brokerage Press, Inc.


Avoiding The Commoditization Rat Race To The Bottom

Jean-Eric Plamondon was in the scrap metal business where the stereotypical operator is a shady character buying metal by the ton with a blow torch in one hand and a wad of cash in the other.
Plamondon decided he wanted to do scrap metal differently and discovered farmers were keen to clean up their land. Plamondon offered a full-service clean up wherein a crew would tidy up a farm and dispose of all of the excess waste — including the valuable scrap metal. Plamondon got so good that he was buying farmers’ metal for as little as $3 a ton and was turning around and selling it to a smelter for more than $100 a ton.
It was a license to print money, which is why, when Jean-Eric decided to get out, he was able to sell the business to his employees. In this episode, you’ll discover:
• How to re-position your company to eliminate competitors
• Where to go for advice when you feel overwhelmed
• Why possession is 9/10ths of the law in any negotiation
• The difference between a justice system and a legal system and what this means for your relationship with partners
• How to systematize your business
• What a vendor take-back is and what it means to the value of your company

Listen now


If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

Want Your Marketing To Work… EVERY TIME!


I hope you found the time to watch the marketing video I sent you last week.
It contains revolutionary information about marketing that may have a dramatic impact on your business moving forward.
Click here  if you haven’t watched it yet.

And if you did watch it, I deeply apologize about the fact that you will NEVER look at the FedEx logo the same way again 🙂

Today, I want to emphasize a few of the major points the video made, such as the actual purpose of marketing.

The video said it’s supposed to help facilitate your prospects’ decision-making process.

Remember last week I said that prospects shop value… NOT price.

I emphasized the fact that prospects are always looking for the best deal!

Well, that’s the purpose of marketing… to help prospects determine who is really offering them the best deal.

That’s “facilitating their decision-making process.”

But those are really big words, so think of the purpose of marketing in simpler terms.

It’s entering the conversation taking place in the head of your prospect.

Or here’s another way to look at it… marketing’s job is to answer the number one question on your prospect’s mind… at just the right time.

Now, compare your current marketing to this standard and see if it meets these critical criteria.

Look at your website and see if it does this.

For 99.9% of business today, it doesn’t even come close!

To determine how likely your marketing is to convert, simply fill out my Conversion Equation Evaluator

Once completed, you will know with 100% certainty whether your current marketing will be successful at converting prospects and closing more sales for your business… AND whether your current marketing will actually make you money or not!

If your marketing fails the evaluation process, you will know WHY… and you will know EXACTLY what to do to correct it so it never fails again.

After calculating your marketing conversion level, I can show you exactly what to do with your website and marketing collateral that could double or triple the number of prospects who respond to your marketing.

Just schedule a complimentary meeting with me.

Next week, let’s discuss the 3 fundamentals of marketing that will enable your business to begin to dominate your entire market while out-selling your competition.

Have a great week!

From 10 Employees to 10X Revenue

Alex Bates co-founded Mtell in 2006. The software company used artificial intelligence to predict when a piece of heavy machinery like an oil rig was about to fail so workers can preemptively fix what’s about to break.

If that sounds like a niche service offering, it was. Bates and his co-founder were able to grow the company to around $3 million in revenue using strategic relationships to fund growth and boost sales. But, in order to sustain their growth momentum, they needed more money.

Would they attempt to go public, or find a strategic buyer?

In this episode, you’ll learn:

  • The definition of corporate venture capital and how you can leverage it for your company
  • How to identify strategic opportunities to increase your multiple
  • An innovative way to generate sales when you don’t have contacts in your target industry
  • The difference between Series A and Series B venture capital rounds
  • The definition of a ‘whisper number’, and why you want one

Listen Now


If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

Why You Should Fire Yourself

If you find yourself in a position where your customers always insist on speaking with you directly instead of your employees, then you might want to consider shifting your structure so you can improve the value of your business.

Here’s why: a business that can thrive without the owner at the center of all its operations is more valuable because processes can run smoothly with or without you. If you’re too stuck in the weeds, you’ll have a difficult time improving or evolving – and your employees won’t have the opportunity to grow and become advocates for your brand.

To maximize the value of your business, you should set a goal to quietly slip into the background and let your staff take center stage. Here are five ways to make customers less inclined to call you:

1. Re-rank

If you display the bio of key staff members on your website, re-order the list so that it is alphabetical rather than hierarchical.
2. Re-brand

If your surname is in your company name, consider a re-brand. There’s nothing that makes a customer want to deal with the owner more than having the owner’s surname featured in the company name.

3. Hire a President

Giving someone the title of president conveys the message that they have real authority to solve customer problems.
4. Use an email auto-responder

Tim Ferriss, the author of The 4 Hour Work Week among other books, made the email auto-responder famous, and it can serve you well. Set up an automatic response to anyone sending you an email explaining that you are travelling or attending to a strategic project and unable to answer their questions immediately. Instead, train customers to direct questions to the person best suited to answer them quickly.

A word of caution using this strategy: if you continue to answer customer emails after setting up an auto-responder, it’s going to become transparent that you’re just trying to hide behind your autoresponder, which could diminish your credibility. If you set one up, you need to be ready to let others step in.
5. Play hookey

If you have the kind of business that customers visit in person, set up a home office so you can spend more time away from your location.

For a hard-charging A-type entrepreneur, the steps above can be complicated and feel counterintuitive. They may even have a short-term negative impact on your company’s sales, but once you get your customers trained to go to your team, you’ll be able to scale up further and ultimately maximize the value of your business.


If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.


Did You Know This About Your Marketing?

Everything you have ever learned… everything you have ever been taught… and everything you have ever been told about marketing is WRONG!

Please consider this! Next time you’re online, I want you to search out and compare a few websites.

Compare 2 or more moving company websites, or perhaps fencing contractors, or attorneys, or accountants or any other professional or service-based business.


This explains why so many businesses compete on price.

Think about it, when you go to buy something, don’t you always want the best deal?

Well, when businesses look and say the exact same things, isn’t price the ONLY way to determine who is offering the best deal?

The following statement is often shocking to business owners, but price is NOT what customers shop for!

They’re shopping for VALUE. Customers will pay twice the price if they believe they’ll receive four times the value.

Prove this to yourself… do you buy all of your clothes at Walmart? Do you drive the cheapest car on the market? If not, why not?

Value trumps price every time, but when all businesses look identical to each other, the ONLY value proposition left to the customer is the business offering the lowest price.

So let me prove to you right now that everything you have ever learned… everything you have ever been taught… and everything you have ever been told about marketing is WRONG!

Here’s a video I created for you. Trust me when I tell you this may be the most important video you will ever watch as a business owner.

Click here to watch.

It’s a little long… 73 minutes, but I promise you it will be the BEST 73 minutes you will ever invest as a business owner!

I hope you enjoy it, and next week… I’ll help you begin to market your business the right way, and watch what happens to your leads and sales once you do.

Click here to watch.

Talk to you then.


Understanding Corporate Social Responsibility (CSR)

If you don’t exactly understand what corporate social responsibility (CSR) means, don’t worry.  We’ll cover the main points you need to know.  CSR is increasingly seen as something that companies of all sizes need to be aware of, so let’s take a closer look at a few of the finer points.

There are 4 basic pillars in CSR: the community, the environment, the marketplace and the workplace.  The community pillar of CSR refers to your company’s contribution to the local community; this contribution can take a variety of forms ranging from financial support to personal involvement. 

The second pillar of CSR is the environment.  The simple fact is that people around the world are becoming much more environmentally aware.  You can be quite certain that a percentage of your customers and/or clients have environmental concerns. 

Increasingly, consumers want to know that the companies that they are purchasing from have good environmental practices.  There are many ways that businesses can show that they are environmentally aware.  They range from recycling and using low-emission and high-mileage vehicles whenever possible to adopting packaging and containers that are environmentally friendly. 

The third pillar of CSR is the marketplace.  Proper corporate social responsibility includes the responsible utilization of advertising, public relations, and ethical business conduct.  Another key element in the marketplace pillar is adopting fair treatment policies towards suppliers and vendors, contractors and shareholders.  In other words, the marketplace aspect of CSR means rejecting exploitative business practices in favor of fairer and more equitable business practices. 

The final pillar of CSR concerns the workplace.  In the workplace pillar, CSR encourages the implementation of fair and equitable treatment of employees, as well as observing workplace safety protocols and embracing equal opportunity employment and labor standards.

Adopting CSR practices in today’s business climate is a prudent decision, as it serves to increase both shareholder and investor interest, while simultaneously encouraging a company’s value.  Likewise, embracing CSR practices can make it easier to attract a buyer and that party may be willing to pay a higher selling price.

Typically, buyers want a business that has many of the attributes supported by the four pillars of CSR.  Buyers want businesses that enjoy a high level of customer loyalty and have good overall relations with the local community.  Additionally, buyers want businesses that have quality relationships with their suppliers and vendors as well as loyal and dependable employees. 

Sellers must realize that buyers want products, goods and services that are in line with the current trends of the marketplace and have an eye towards future trends.  Finally, buyers want as little “baggage” as possible.  You can be certain that buyers don’t want to find any skeletons lurking about in the company closet.  The proper utilization of CSR can address all of these concerns and, in the process, make your business more attractive to a potential buyer.


Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Copyright: Business Brokerage Press, Inc.


The Snag Of Selling To Private Equity

Sherry Deutschmann got the money to start LetterLogic Inc. – a company that printed and mailed patient statements for hospitals – by having a yard sale. She made her first desk out of an old door.

From these humble beginnings Deutschmann built LetterLogic into a $40 million juggernaut which she recently sold for more than seven times Earnings Before Interest Taxes Depreciation and Amortization (EBITDA).

Deutschmann credits her success to the culture she built based on empathy, transparency and a juicy profit-sharing plan which is why she was so surprised when her acquirer decided to shut it down.

In this episode, you’ll discover:

  • The downside of selling to a private equity group
  • How to create a positive cash flow cycle using your customer’s money
  • Why Deutschmann paid her profit-sharing plan monthly
  • The definition of “Major in the majors” and why Deutschmann credits this philosophy for helping her sell
  • How your Trailing Twelve Months (TTM) financials impact your value

Listen now


If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

Ownership Has Its Privileges

Walk down Nashville’s Lower Broadway any night of the week, and you can hear aspiring artists belting out cover tunes from Elton John to Garth Brooks.

In many cases, these musicians come to Nashville to be discovered but pay their rent using the tips they get by playing other people’s songs. Most are lucky to eke out a modest living while the stars they impersonate run thriving empires.

Forbes estimates[1] that Luke Bryan, country music’s highest-paid star last year, earned 52 million dollars on the back of his stadium tour and duties as an American Idol judge and Chevy spokesperson.

What’s going on here? Is Bryan that much more talented than the dozens of artists playing his songs in Nashville every night?

Probably not.

The difference comes down to who controls the product. In Bryan’s case, he owns the music and the personal brand he has created to perform it. The cover artist is just reselling his stuff.

The Value Of Your Brand

The music business can be a helpful analogy in explaining why creating a unique brand is such a big contributor to the value of your company. Acquirers want what they could not easily copy. If you’re reselling other people’s products and services, an acquirer will likely argue that there are probably dozens of competitors driving down your margin next to nothing. Further, they may even conclude that they too could earn a license to resell whatever you’re distributing and will, therefore, place little value in the company you’ve built.

However, if you have something exclusive – a unique product or brand that makes people believe what you do is different – an acquirer will pay more, arguing it is difficult to reproduce what you have created.

If you find yourself reselling other people’s products or services, you can still drive up the value of your business by creating a brand around the way you do it. You could argue that Peloton is just selling a stationary bike. Still, it is the unique company they have created around the bike –including the community of riders that subscribe – that has recently driven Peloton’s value north of $7 billion (almost eight times trailing twelve months revenue at the time of their recent Initial Public Offering).

To drive up the value of your company, own the stuff you sell. If that’s not possible, create a unique brand that makes consumers feel as if you do.



If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.


When Disaster Strikes A Founder

Tom Pisello built Alinean, a consulting company which offered a set of tools to help salespeople express the value of picking their solution. The business was cruising with about half of its revenue coming from recurring licensing fees and the other half from consulting when disaster struck the Pisello’s family.

Pisello’s wife succumbed to a seven-year battle with cancer. Pisello knew he needed to focus on his family and decided to sell quickly and picked an existing partner as a new home for Alinean.

In the episode, you’ll discover:

  • How life events can change your motivation in an instant
  • How to value consulting compared to recurring revenue
  • How to evaluate a potential acquirer
  • Why your best acquirer may be an existing partner
  • How to vet the likelihood you’ll hit your earn out
  • Pisello’s biggest regret and what he might do differently if he could sell Alinean all over again
  • The definition of “Evolved Selling” and how it applies to B2B companies

Listen now


If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.