American Business Brokers & Advisors - May 2019

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American Business Brokers & Advisor Founder & President PROFESSIONAL INTERMEDIARY & MARKET MAKER FOR PRIVATELY HELD COMPANIES Advisor • Consultant • Speaker Market Valuations Involved in Closing 500+Business Transactions & Over $500 Million Author of “The Art of Buying and Selling a Convenience Store”

MAY 2019

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The Best Advice You Can Get “If you’re at a turning point with your HowMy Experience Helps You Buy or Sell a Business

B usinesses are a lot like relationships: easy to start but hard to end. Before I became a professional intermediary for businesses, I was a business owner myself. In fact, I owned 40 of them, including 10 national franchises. I had what I call “deal-itis.” I loved making business deals and buying all these new businesses. Because of how many I could buy and how easily I seemed to acquire them, I overestimated how great I was as a business owner. It was only after experiencing some operator errors that I realized I might not be as great as I thought I was. Through my experiences, I found that what I was actually good at was brokering the deals in which I had, for so long, played either the buyer or the seller. I loved the process of managing transactions, and I found that I could really help business owners by advising them whenever they were

biased against would-be buyers from the start. If a buyer points out something that’s wrong with the business, the seller might feel insulted. This is understandable. No one wants to hear something is wrong with their child; they’ll deny it as long as possible. Here’s what I’m getting at: If you want to sell your business, you need to have access to an objective opinion throughout the process. At first, I thought all it would take to be a successful broker was just be good with numbers. But what I found is that people’s feelings, their very livelihoods, are wrapped up in these transactions. They won’t just be thinking about the numbers. As someone who has been both a buyer and seller, I can empathize with both parties’ situations, and I still keep an objective viewpoint on how to achieve the best outcome for my clients. To date, I’ve sold over 500 businesses and worked with over 1,000 buyers. What I love about my job is that I get to guide people through one of the most significant decisions of their lives. A lot of the people I work with have run their business successfully for years. When they decide to sell, they’re stepping out of their comfort zone for the first time in a long time. Knowing this, I don’t sugarcoat my advice to my clients. If I think they should take a certain deal, I’ll tell them. If I think they’ll be better off keeping their business, I’ll tell them. If you’re at a turning point with your business, you deserve to be given the best advice, even if it’s hard to hear. At American Business Brokers and Advisors, we can be your voice of reason.

business, you deserve to be given the best advice, even if it’s hard to hear.”

buying or selling a business. When you’ve had a career as a business owner as long as I have, you somehow manage to make every mistake there is and navigate every difficult situation possible. It puts me in an ideal spot to help my clients to know what to do in those same situations. One thing I learned is that, as a business owner, you can form an irrational attachment to it, almost as if it were your child. That means that when they’re ready to sell, many business owners are

—Terry Monroe

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Why Seniors Are Flocking to Home-Sharing Platforms

An Opportunity for Easy Money and Social Engagement

who find themselves rich in assets but struggling with liquid finances. Home-sharing allows them to tap into these resources. According to Priceonomics, U.S. Airbnb hosts bring in a monthly average of $924. But home-sharing can do more than boost your income. By opening a room in your home to travelers, you’ll encounter all kinds of people you might never otherwise meet, prompting dynamic social interactions and meaningful connections. The rating systems on Airbnb and similar platforms almost entirely prevent would-be troublemakers from entering your property, and users report that when a rare negative experience does occur, the company typically has your back. It’s a great way to stay socially engaged while staving off loneliness. Best of all, running a modestly successful Airbnb usually doesn’t take much work. It simply requires you to set up a neat, welcoming space, keep in contact with your guests, and ensure the check-in and check- out processes are as straightforward as possible. In fact, senior hosts seem to have a leg up on their younger counterparts, as elderly hosts earn the most consistently positive ratings across the globe. Airbnb and The Freebird Club won’t make you rich, but they’re relatively low effort enterprises that come with some massive benefits. If you’re looking for a little busywork, some extra cash, and a little social interaction in your retirement, hosting may be your best bet!

The freedom of retirement certainly comes with its perks, but challenges of post-work living exist as well. Chief among them, for most elderly folks, are fears of social isolation and financial insolvency, as having coworkers and a regular income are not as common in retirement. Perhaps this is why so many retirees are flocking to home-sharing platforms like Airbnb or its seniors-only cousin, The Freebird Club. Airbnb reported last year that the 60-plus age bracket is its fastest- growing demographic worldwide, with the number of senior hosts as much as doubling every year.

Home-sharing platforms can be a tremendous boon to a tight retirement budget. It’s an especially attractive option to elderly folks

How to Be a Wealthy Employee

CREATING VALUE IN THE WORKPLACE

At one time or another, we have all been employees. When I was an employee, I was mostly concerned about how much time I had to be at work, when I was going to get paid, and how much I was going to get paid. As an employer, I was concerned about whether the employees were going to show up when they were supposed to, how much was I paying them, and if they would do the job they were hired to do. There are a couple of things I have learned about employees. One is that you can’t reprimand a conscientious employee because they will be harder on themselves than you ever could be. The other thing I have learned is that being an employee is about creating value, which leads me to think about employment in our society today. The future of employees is about creating value. If someone is only getting paid $10 an hour, it’s probably because they are only creating $10 an hour in value. The job they’re doing is probably very basic and can be done by someone else very easily. In order to get paid more money, you have to create more value. For example, I have a number of attorneys who work for me. They get paid between $175 to $400 an

hour. You might ask, “Gee, Terry, why would you ever use the $400 per hour attorney when you can use the $175 per hour attorney?” Because the $400 per hour attorney is very good at what they do, and they create enormous value for me when I use them. The value principle applies to any business. Value dictates what a person is to be paid. If you want to be paid more money, create more value. And how do you create more value as an employee? Ask your employer. They will be glad to let you know what you can do to help create more value.

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WORD SEARCH Take A Break! June Word Search

Looking Outside the Leadership Pipeline WHAT THE PYGMALION EFFECT SAYS ABOUT EMPLOYEE POTENTIAL

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In 1968, two psychologists performed an experiment on an elementary school classroom. They gave each student a disguised I.Q. test and told their teacher afterward that about 20 percent of the students would be “intellectual bloomers” based on the test’s results. They then gave the teachers the names of these students. What the teachers didn’t know was that the names of the “intellectual bloomers” were chosen at random and not based on their test scores. Over the course of the next eight months, the teachers favored these students, supporting and encouraging them in order to nurture their supposed academic giftedness. Then, the two psychologists re-administered the same I.Q. test, finding that the students the teacher had nurtured, on average, scored higher the second time around. The conclusion of the study was that support and nurturing from leaders and mentors can positively affect a person’s performance in academic settings as well as their job. This phenomenon was dubbed the Pygmalion Effect, after a sculptor in one of the stories from Ovid’s Metamorphoses. He creates a sculpture of a beautiful woman from ivory and falls madly in love with his own creation. The story, like the experiment, illustrates how a person’s expectation for someone else can influence their performance. It’s an easy trap to fall into as a leader or a business owner. You may have noted that you have employees with potential for advancement in your company. While supporting and nurturing the potential of certain employees is not inherently a bad thing, don’t let your support for them become a lack of support for your other employees. The Pygmalion Effect demonstrates that an employee’s potential for leadership is based largely on the support they receive. Conversely, a lack of support can lead to a decrease in potential and even performance. As a business owner and leader, it pays to know just how much your demonstration of support for employees can positively affect their performance and your business.

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INSIDE P.O. Box 810 Effingham, IL 62401 1 2 How American Business Brokers and Advisors Got Started Why Seniors Are Flocking to Home- Sharing Platforms

Sudoku Solution

Being a Wealthy Employee

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The Pygmalion Effect and Employee Potential

Take A Break!

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Happy Seasonal Employees

A h, summer. The sun is shining, days are longer, and college kids are coming home. That last part might not sound as appealing to some, but if you’re searching for great employees to help with your summer rush, these broke yet suddenly free college kids can give your business the seasonal support it needs. An essential part of hiring effective seasonal workers is to make them feel like they are part of the team. Follow these tips to create your A-team this summer. Be Honest If you don’t plan to keep your seasonal employees after the summer rush slows down this fall, make sure that detail is made clear to your summertime workers. Nothing is more demoralizing to a person than to find out an opportunity they were looking forward to never actually existed. This will only sour your relationships with seasonal workers, and they will let others know about their experiences, making it harder to hire next summer. Train, Train, Train Studies have shown that employees are happier and more productive when they are properly

trained, and it’s no different when it comes to your seasonal employees. Because they are quickly thrown into the hullabaloo, it’s important to make sure your seasonal employees are well- equipped to handle their duties from day one. Host an orientation day, be clear about employee responsibilities, and teach them about your brand and values. The best part about training seasonal employees the right way the first time is that the employees who want to return the following season will already be up to speed. Include Them If you have an employee shoutout wall or annual camping trip, make your seasonal employees part of the team by including them in the fun side of the company. Additionally, some seasonal employees may thrive in a mentorship system. Set up a mentor and mentee group between your seasonal and permanent employees, or create a special group for them. As long as you prepare them well and make every effort to include them, you will find your seasonal employees thriving in their short tenure.

Thanks for Joining the Summer Team! Make Your Seasonal Employees Feel Welcome

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