Start up brainstorm (outside the box thinking exercise)

[snowbank]

So, let's play a game. Here is a business where most businesses offer the same thing, without doing a great job of differentiating themselves: business brokers

Obviously some have better lists of buyers, some have a bit better web presence, but for the most part, they're all the same.

Let's hear your best ideas on how you would differentiate yourself if you were to start a business in this space.(think outside the box)

 

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[orinoco]

most of them deal with only larger businesses

it seems there are few brokers who will deal with the sale for a smaller business

I see a gap in the market here

perhaps a different approach to supplying services, smaller services with clear pricing and packaging, which would appeal to smaller business owners

most brokers don't show their fees up front which would put smaller businesses off, so changing this to more transparency

targeting a larger market: higher volume of smaller transactions

would need to see if this model is profitable though

 

[Runum]

Interesting Bill. How are they all the same? What services do they all provide? What is the norm? I have never dealt with one.

 

[snowbank]

Interesting Bill. How are they all the same? What services do they all provide? What is the norm? I have never dealt with one.

for the most part, they are just going to list your business on the same places all the other brokers are going to, and promote it to their list.(obviously they do more the bigger the business is- investment bank would be different than what i'm talking about here)

the gist of what they do- list on some sites, promote to their list, maybe ask around to other brokers. think realtor, but just for businesses. most suck, and their whole pitch is more or less trying to convince you they suck less than their competitors. they do the back and forth with potential buyers for you, and help put together your sales packet with information about the company you're selling, and take a % of the sale.(often 10%) if you ask, "why should i hire you instead of any one of their competitors", they all have answers, but they are all shitty answers because none of them are any better than their competitors for the most part.

 

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[The-J]

I asked my dad this question, you know, to start some conversation.

His response: Choose a niche or industry that you have great expertise in and a nice big rolodex of buyers, sellers, managers and executive officers.

 

[Runum]

The broker could send his listings to HR people all over the world. When there are lay offs the HR people could show the listings to the former employees.

 

[wade1mil]

I have no experience with business brokers, so none of this may apply I don't know. I would make my site user friendly, offer an escrow service, offer negotiating managers to handle the negotiating for you (you give them the amount, and they try to maximize the price - this might not appeal to many people, but could appeal to the younger and inexperienced buyer/seller), if it doesn't sell within X days get a free X days, verified listings with proof of earnings and expenses for X months/years. Maybe that spawns some thoughts idk...

 

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[snowbank]

Choose a niche or industry that you have great expertise in and a nice big rolodex of buyers, sellers, managers and executive officers.

you can really do this in any business, and is often a good route to go to find an area where maybe someone isn't filling well.

however, it wouldn't work in the example we're trying to solve. this wouldn't be getting outside the box to give better value so that you were the person they should be using, this would just be playing in a much smaller box.

 

[snowbank]

I would make my site user friendly...

oh come on wade! that post you made the other day gave me high hopes for you. is someone really going to go, "HOLY SHIT, this is the guy i HAVE to hire. see the way he coded that website shit up!" because your site is user friendly?

don't think about generic little tweaks to a site or business that would help the business. think about insane value for the person you're trying to provide value to.

 

[snowbank]

if there are little tiny differences between you and your competitors, everyone is the same. that's the way it is now. some people have better sites, some people are better negotiators, some people have better lists, etc... none of that stands out.


OUTSIDE of the box is where a major differentiation will probably come from. You have to be able to provide massive value where it isn't provided currently, and make it stand out to the customer. So you need to be able to check these boxes:

-massive value
-is obviously a benefit to the customer(they can see it)
-other people aren't doing it

 

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[Runum]

Provide the sellers list to career centers at universities. Also to business/entrepreneur programs.

Never seen a business broker with signs on their cars like a Realtor.

 

[snowbank]

Provide the sellers list to career centers at universities. Also to business/entrepreneur programs.

Never seen a business broker with signs on their cars like a Realtor.

you run into the same thing with this as the hr idea- it is a cool idea to test to maybe get some buying prospects where people aren't looking, but doesn't do a lot more for you than that:

-massive value (no)
-is obviously a benefit to the customer(they can see it) (no)
-other people aren't doing it (this is the only box it would check off)

 

[The-J]

if there are little tiny differences between you and your competitors, everyone is the same. that's the way it is now. some people have better sites, some people are better negotiators, some people have better lists, etc... none of that stands out.


OUTSIDE of the box is where a major differentiation will probably come from. You have to be able to provide massive value where it isn't provided currently, and make it stand out to the customer. So you need to be able to check these boxes:

-massive value
-is obviously a benefit to the customer(they can see it)
-other people aren't doing it

I don't know what business brokers are doing or aren't doing. All I know is what you told me.

So, what I'm thinking about, with my limited knowledge, is, how can the business broker make more money for their clients, how can they speed up sales, how can they make themselves known?

Can business brokers save people money on taxes?

 

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[Runum]

you run into the same thing with this as the hr idea- it is a cool idea to test to maybe get some buying prospects where people aren't looking, but doesn't do a lot more for you than that:

-massive value (no)
-is obviously a benefit to the customer(they can see it) (no)
-other people aren't doing it (this is the only box it would check off)

I guess we aren't on the same page then.

A realtor's job is to find sellers and find buyers. So you have two sides to the transaction. Who are you wanting to provide massive value to, the buyer or the seller?

As far as not providing massive value, I am not sure what you qualify as massive value? Putting businesses for sale in front of more people that are in decision points in their lives would be a logical strategy to me.

Most people that I know are not in the mental mode of buying an existing business. I hear more talk about starting a business and work for oneself rather than buying a business. Seems effecting a mind shift for potential customers would be in order. That would be through marketing and advertising.

 

[wade1mil]

What about instead of having business for sale constantly to sell them more like an auction house. Have a preview period for each business with a day and time that the bidding will take place. It would give you enough time to generate traffic to that business, give the buyers a sense of urgency by giving a period of time to bid. Each bidder would be there at the same time which could result in multiple higher offers from competition. You could have a live online broadcast on the website talking about the websites that are currently up for sale. Not sure if I'd like the broadcast idea if it were my website because you're getting into human resources systems, but its outside the box.

Oh, and a REALLY nice logo :smx9:

 

[snowbank]

Who are you wanting to provide massive value to, the buyer or the seller?

if you are working for someone selling their business, you want to provide value for the seller.(not talking about a broker for the buyer-sorry if i wasn't clear)

As far as not providing massive value, I am not sure what you qualify as massive value? Putting businesses for sale in front of more people that are in decision points in their lives would be a logical strategy to me.

logical strategies don't make people hire you over people offering the same exact service.

a realtor sending mailers to some places other realtors aren't isn't going to make a client hire them because it doesn't mean anything/the client wouldn't notice any difference.

same with a business broker- if they send it to some extra people that doesn't mean anything for someone who's listing their business for sale. you're saying, 'i'm going to attempt to get some extra eyes that probably aren't seeing these listings, to see your listings.' that won't mean anything to a potential client.

EVERYONE is going to be using that same pitch. "we work hard to find you buyers at places our competitors aren't." that's kind of my point. everyone is claiming that is a benefit, a benefit that's obviously impossible to prove, and basically irrelevant because really who cares how many people see it, they care if people are going to buy it, so it doesn't mean anything to a potential client.

 

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[snowbank]

who cares how many people see it, they care if people are going to buy it, so it doesn't mean anything to a potential client.

what i mean by this is- the pitch you're referring to is a "we're going to try really hard" type of pitch.(this is what everyone is already doing) a buyer is going to make a decision based on who can get them the most money and/or sell their business the fastest. they don't care how hard someone works for them, they want results. you can't pitch them on effort to stand out.

so the question is, with everyone offering the same exact service for the most part,(and you can see how difficult it is to stand out, which is why i think it's so interesting- because even if you differentiate like you're mentioning, it has to be in an area that differentiates a decision for a client) how do you make it a no brainer for them to hire you?

 

[snowbank]

could result in multiple higher offers from competition

it could, but it also could not... then what?

put yourself in the buyers shoes. if someone asked you to be the broker on your site and their strategy was to start an auction house and possibly try to convince people to engage in a bidding war(brokers already do this if they're good) which may get you higher bids, what would you say?

seems like you're still using the same pitch as the other brokers, just using a different sales source

 

[Runum]

Thanks for the clarification. I do agree with your observations.

Documented success stories and how their success will translate to selling your business would be the next logical step. But...every other broker will do the same thing.

So then it comes to best sales pitch to convince the seller to list with them.

 

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[FastNAwesome]

Ok, I don't have any clue about this, nor how the business owners typically feel about the busines they're selling. So I'll guess they just want cash and just want out.

So how about a pitch:

1 Phonecall Company Selling - We Turn Your Business Into Cash In 90 Days - GUARANTEED.

-massive value
-is obviously a benefit to the customer(they can see it)
-other people aren't doing it

If motivation is just to be out, and get cash asap, what's better than the company that guarantees turning your company into cash, in maximally 3 months, and with zero effort on your end? You walk in, sign the deal, get the cash in 3 months.

Seems to me you couldn't provide good value to sellers here if you don't provide even better value to buyers.
The way this could work is to try selling business for 2 months intensely (and also having a great contacts -
knowing that you're that unique firm that brings best deals to the table).

If that doesn't work out, then in 3rd month you sell out the company piece by piece:
- sell computers to interested parties (or even better partners who need used computers and know you have a stream of supply),
- sell furniture to partners who deal with used furniture
- sell RE quickly through your very liquid RE friends/partners who know you always have an underpriced RE best deals as you wanna
sell quickly. If you really like the estate, you can buy it off yourself (underpriced again) and then rent or sell at market price, whatever.
- sell any goodwill company has to someone who needs a reputation for their company, or needs to have an older and established company, or don't want their names listed as founders, or just need quick off the shelf company. You could do this easier with your partners in that area.

So practically the system would be, 2 months of intense selling, reaching more prospects than others, pushing harder, making partnerships that make all this easier.

Then if no success, 3rd month you liquidate the company by selling it in pieces, and trying hard to sell all of the pieces - whether it's a used car, RE, office hardware or garage sale material. You sell it all.

Your client - business seller - is not sweating one bit over all this. They've signed the deal, and it 3 months you call them with report of what was done, and invitation to collect their money. The cash they are GUARANTEED only with you.

Maybe less than they expected, but I believe it could be even more. After all you'd sell harder and wider than any other lazy a$$ broker + have the sell out strategy where due to partnerships, you'd get better prices than if your client went alone to scream "I need all this sold in 30 days". (plus the time and effort of selling, which you got covered and almost automated).

ADDITION: if these people are cool with waiting 90 days, and you sell the biz in 1 month, maybe you could use that money for the next 2 months for some quick loans and making some extra buck to your hard working company.

 

[ZDS]

So, let's play a game. Here is a business where most businesses offer the same thing, without doing a great job of differentiating themselves: business brokers

Obviously some have better lists of buyers, some have a bit better web presence, but for the most part, they're all the same.

Let's hear your best ideas on how you would differentiate yourself if you were to start a business in this space.(think outside the box)

Let's give this a shot.


In order to disrupt the market, we're going to have to figure out how to do something other than "1 up" the competition. 6 Minute AB's doesn't disrupt the 7 minute AB's market.


We need to add massive value to our customers.


Our customers value: how long it takes to make the sale and amount of money they receive. However, the only portion that we can realistically control to any degree of certainty is the money aspect.


We're not going to be able to magically make their business sell for more than its worth or substantially more than the competition. Even if we could, there'd be no way to realistically convince the customer of this.


So here's how i propose we differentiate ourselves:

Scratch the cut. If most companies are taking 10% -- Take 0%. Don't profit off the sale, profit off the derivatives of the sale.

You're generating two leads off every sale. We're gonna profit off sending business to other people.

You get paid on a referral for any legal aspect needed to transfer the business(I think there's a ton of paper work involved in this)

For the person buying the business, there going to need necessary things to run the business / spend money every month on certain items. EX: Restaurants are going to need to buy X amount of dishes every month. We can profit by influencing where they buy it. Not to mention if you have a buyer, there's no reason you can't partner with a company and sell him "x" package to help his new business grow.

Your pitch is effectively: There's no fees. We don't take a cut of your business. We'll set you up with everything you need to get this sale done. We make our money by helping the buyer get his business set up smoothly.

I'm sure as you dive into it, there's other derivatives/after market services you could profit off of.

We're adding massive value to the seller by giving him a no fee's option to sell his business. A no-lose situation that doesn't involve him giving away a chunk of his business to a "salesman"

 

[snowbank]

We Turn Your Business Into Cash In 90 Days

Something like this works well. Thought you were going somewhere else with it, but this concept in general is a good one.

This was popular marketing with realtors, "I sell your house in 90 days, or I will buy it"

 

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[Fermovian]

How about a service from the buyer's perspective. The buyer give them the criteria and they find a business. the problem with traditional brokers seems to that they focus only on what they already have. They should instead focus on finding businesses from other brokers other sources and be compensated on the flow of profits.

 

[PatrickP]

Is there a MLS for businesses like there is for houses?

 

[snowbank]

Our customers value: how long it takes to make the sale and amount of money they receive. However, the only portion that we can realistically control to any degree of certainty is the money aspect.


We're not going to be able to magically make their business sell for more than its worth or substantially more than the competition. Even if we could, there'd be no way to realistically convince the customer of this.


So here's how i propose we differentiate ourselves:

Scratch the cut. If most companies are taking 10% -- Take 0%. Don't profit off the sale, profit off the derivatives of the sale.

You're generating two leads off every sale. We're gonna profit off sending business to other people.

You get paid on a referral for any legal aspect needed to transfer the business(I think there's a ton of paper work involved in this)

This is along the lines of the stuff I'm talking about. Good one Zach.

Couple hurdles with some of it, but nothing that couldn't necessarily be figured out.(example- some businesses there aren't going to be many fees needed and/or they'll have people for those things already)

 

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[Runum]

Seems to me that you could better serve the seller by educating the buyer. You could show the potential buyer your EV calculations and educate them on how this is the deal of the century.

 

[kurtyordy]

This was popular marketing with realtors, "I sell your house in 90 days, or I will buy it"

I was thinking along those lines as well. if they list the biz where you say it should be listed, then you will buy after 90 days.

I have worked with a number of biz brokers in the past. 100% were arrogant and required multiple calls to get a call back. fixing that right there would attract buyers for you.

 

[snowbank]

Is there a MLS for businesses like there is for houses?

Nope, not that I know of. Lot of places that a lot of businesses list, but not a definitive 'business listing' mls to my knowledge

 

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[PatrickP]

Nope, not that I know of. Lot of places that a lot of businesses list, but not a definitive 'business listing' mls to my knowledge

that might be something to do.


There is a business broker who I get emails from when they have new companies up for sale. I singed their NDA a few months back and they sent me details about the listings they had. Well now for some reason they no longer return emails nor voice mail.

So basically I can't get any info on the 2 businesses I am interested in because no other broker has any info on them.

I am SURE the company owners who have their businesses listed for sale with this broker would MUCH prefer if they had an MLS for businesses.

 

[snowbank]

I have worked with a number of biz brokers in the past. 100% were arrogant and required multiple calls to get a call back. fixing that right there would attract buyers for you.

well, this is associated with the post/the problem of an industry like this. if someone works more or less than the competitors it's not overly noticeable since everyone is relatively the same. so, what happens is most people are not very good, yet, it's hard to differentiate between the ones who are or aren't for people looking to work with them.