20 things Business Brokers should 🚩NEVER🚩 do:
1- Keep up listings after they've already sold as Buyer bait.
2- Fail to mark under contract listings as such.
3- Projections.
4- Set an asking price based on what the Seller wants for it with no defensible logic or support.
5- Set asking price that won't appraise and definitely won't meet minimum debt coverage ratio standards for SBA lending.
6- Go to market before they've reviewed P&L's and Tax Returns of Sellers and have them available for Buyers on the other side of an LOI.
7- Feign massive Buyer interest in a deal to create FOMO.
8- Fail to negotiate critical pieces of the deal at LOI that will avoid deal-killing fights near closing (allocation, WIP, inventory or W/C adjustments, Seller Financing details, timeline, etc.)
9- Make more money from up-front fees and retainers than success fees at closings. (a few well-known names- this is their biz model!!!)
10- Ask anyone to fax you anything.
11- Use the last Broker's CIM / Photos / Sales Materials in your marketing.
12- Talk bad about someone else's deal/s or brokerage to persuade a Buyer to prefer your deal/s.
13- Fully rely on BizBuySell for Buyers.
14- Ask another Broker for a share of their fee after a closing that was not agreed to in writing beforehand.
15- Not disclose when a bank you recommend to a Buyer pays you fees.
16- Take on more engagements than you can have time capacity to properly work.
17- Use the words "Cash Flow" or "Profit" carelessly. (always specify SDE, EBITDA, etc...)
18- Be unwilling to talk to a Buyer about one of your listings, even high level, non-confidential stuff until they've sent you a Personal Financial Statement.
19- Represent a Seller that brags to you privately about tax fraud (cash they take home not on the financials etc.)
20- Put making your fee above the best interests of the Buyer or Seller. (not saying be willing to surrender your fee to make a deal work, but don't get someone into a bad deal just so you can get paid)
How many of these have you seen happen over the years?
/END THREAD