Avoiding Bad Deals, with Ted Leverette

Email: TedJLeverette@partneroncall.com
Website: www.PartnerOnCall.com
LinkedIn: http://www.linkedin.com/in/tedleverette
YouTube: https://www.youtube.com/TedLeveretteTheBusinessBuyerAdvocate
Amazon books: https://www.amazon.com/s?k=ted+leverette

Jason Cutter [00:00:03]:
On today’s episode, I have Ted Leverett. He is the. He is called the original business buyer advocate and founder of Partner on Call Network llc. For decades, Ted has been training and coaching people worldwide who wanted to find and buy the right businesses the right ways. He’s not a business broker, never has been. He says, let’s debunk the hype so you don’t buy the wrong businesses or buy the right businesses in the wrong ways. He has so many tools, so many things out there. We’re gonna dive into a lot of his concepts, his ideas, his experience around working with buyers to help them do the right thing.

Jason Cutter [00:00:41]:
Ted, welcome to the Business Broker Growth Show.

Ted Leverette [00:00:45]:
Hey, glad to be here. Thanks.

Jason Cutter [00:00:48]:
I’m very excited for this because a lot of the conversations that I have are with business brokers, M and A intermediaries, people who are on that side mostly focused on the listings, mostly focused on helping business owners exit their business successfully. And yet you’ve been in the game for a long time, but never as a broker, but always on the other side. So let’s start with that. Like, why the buyer side? Why not going into the. The broker listing side like most do?

Ted Leverette [00:01:20]:
Well, the reason I have never been a business broker is I don’t work for free. And most brokers spend an awful lot of time working on listings that are never going to sell. On my side, I get paid like lawyers and accountants whether there’s a deal or no deal.

Jason Cutter [00:01:38]:
And so where does that show up for those buyers? Because are they expecting that as a service? You know, is there a lot of education and helping them understand? Because you mentioned lawyers, lawyers and CPAs and things like that. People know those as service professionals. But how do you make sure that buyers understand you’re there to help them?

Ted Leverette [00:02:04]:
Almost 100% of the people who contact me have been on Amazon and they’ve read my books and they found my books on Amazon because I’m on various social media talking about buying and selling companies, I’m on YouTube, etc. And so my name’s out there for people who are in this space. And if somebody even just hears my name and Googles it, I mean, there are thousands and thousands of of hits. So generally people have read my books. I’d say 98%. When they contact me by email or DM, they’re sold. They’re just asking me, how do you help me deploy this information from your how to books? So they know what my niche is. They’ve read exactly how I perform and what work we do.

Ted Leverette [00:02:49]:
The Only thing they don’t know is how I price my service. But other than that, they’re ready to rock and roll.

Jason Cutter [00:02:55]:
And what is it like working with buyers? What are some of the challenges you see from your side? That’s especially important for those brokers that are on the listing sides with what you’ve learned about working with the buyers.

Ted Leverette [00:03:11]:
I don’t want to steal from a comment I’m going to make in a while. Mostly what I know about buyers, it’s the same thing that drives brokers and sellers crazy. Typical person wanting to buy a business. First of all, they’re searchers, they’re not buyers. They’re buyers if they ever complete a deal. They’re not prepared, they’re not well advised, they try to do it yourself route. They collect anecdotal information from various social media books like mine, and they think that those glimpses into how things actually work will work for them. And then they talk to brokers not being yet prepared.

Ted Leverette [00:03:50]:
And immediately the brokers are on, on the defense. They basically have to try to tell these buyers, look, you’re not ready, you don’t have the money, you don’t have a plan. And from that point forward, guess what, it’s an adversarial relationship. And I hear this from buyers. They say to me, these brokers, they’re so hard to talk to, they won’t listen to me. I’ll cover all that today.

Jason Cutter [00:04:15]:
So when you think about the buyers, you said something about their searchers, not buyers, is where, where have you seen that change over the years? I feel like right now, and maybe it’s just because it’s, it’s loud and in the space is, there’s a lot of influencers and experts out there trying to help buyers buy businesses telling them to buy, you know, the, the laundromats and the car washes and no money down and all this stuff. Is that always been the case? Have there always been those kind of courses and, and experts and, and coaches out there that are making it difficult with buyers?

Ted Leverette [00:04:53]:
It’s gotten worse. Really, it’s gotten worse. The, the buyer world now is an online world before the Internet. All of us brokers, me, lawyers and accountants, we all networked together, we knew one another and we would trade leads and we would work on cases, period. When the Internet came along, all of a sudden anybody, as they say, even a dog can be good on the Internet. Give you an example on LinkedIn, there are dozens of people posing as advisors to buyers and sellers. These are people who last week were doing something completely different and they read a book or they’re reading postings online and they repackage it. Or nowadays, as of like a year ago, they go to AI, artificial intelligence and they say, set me up so I can automatically respond to smart people on LinkedIn.

Ted Leverette [00:05:55]:
And it appears as if they’re actually writing stuff. They’re not. It’s all robots. So it’s gotten very complicated because it’s now an online world. Meaning there are a lot of charlatans.

Jason Cutter [00:06:08]:
Yeah. And I asked that because I know it’s something you and I talked about before this when we’ve met in the past. And then I also know from talking to many brokers, intermediaries dealing with the listing side, where they’re just getting these messages and these assaults from these potential buyers where it seems like they’ve gone through a course or bought a book or follow someone online. You know, like, like when the trend was about, you know, buying houses with no money down. And you know, you just see those kind of people out there pushing that with the buyers that you see that are successful, that are buyers, not just searchers. I know one of the things you said was the challenges of what they bring with them in their experience, in their past and, and what works, but also what doesn’t work, what kind of baggage they have, you know, where do you see that as important with the ones that you work with and how do you help them set themselves up for success?

Ted Leverette [00:07:04]:
The first question I ask if anybody contacts me is have you read my books? If they say no, I say goodbye. Call me when you have. So I don’t bother with these people who choose to be ill informed. And this is what I hope brokers will do. Just stop talking to these people. Waste of time. So if they don’t show some ability that they’ve, they’ve learned what they need to do. And second question I ask is, who’s your team? If they don’t have a lawyer who specializes in deal making or an accountant, I’m not interested.

Ted Leverette [00:07:35]:
Not interested. And by the way, I don’t work on mom and pop businesses. I don’t care about hair salons and the kind of stuff you drive by every day. Probably the smallest deal we would even think about would be a price of a million dollars. Most of the deals we do are in the 3 to 8 or 10 million range every now and then. Much big, but not the little stuff. And it’s that little stuff. A lot of those people are going to those courses, you know how to buy a Business with no money.

Ted Leverette [00:08:01]:
Hey brokers, I am with you on this. I don’t want to talk to them either.

Jason Cutter [00:08:08]:
And, and so how, how do you filter that? So is it about just, you know, I know you said the book and them having their service professionals and then it’s about what they’re looking for, ensuring they’re not just a tire kicker, not just a searcher.

Ted Leverette [00:08:22]:
Oh yeah, yeah. One of the things that they learn in my book is to go to my website. If they go to my website, I have something. It’s about a nine or a ten point checklist. It’s called the searcher marketing plan. And in there list nine or ten steps and when, and when I, we all start with a zoom. A zoom. So we’re in a zoom meeting.

Ted Leverette [00:08:42]:
I have that up on my screen, they have it on theirs. If we’re not screen sharing and I question them. So what’s your resume? What’s the money? What’s your acquisition criteria? And most of them, it’s pretty embarrassing for them because they’re not prepared. And that’s why I want them on that webpage because they see they’re not ready to talk to brokers. Soon as they acknowledge that in this zoom, and that’s when they lose color in their face, they say, can you help me? Bingo. And that’s where the job begins. So we begin with what we call a searcher marketing plan and we anticipate all that stuff that brokers need to know in the first conversation. We handle that.

Ted Leverette [00:09:20]:
We practice that my clients can get an Academy Award for their performance in their first meeting with brokers and sellers because I run them through all the stuff broker’s going to run through. So in other words, they get slapped around a lot. I do the broker role playing with them. Brokers then love talking to my clients because they know if he’s working for Ted, he has enough money to do the deal. It’s not, he might have the money, he has the money. Which by the way is a requirement. I don’t work with people who don’t have the money to do the deal.

Jason Cutter [00:09:51]:
And, and where’s the. So there’s the prep. What are the other benefits of a buyer working with someone like you instead of just dealing with the listing broker?

Ted Leverette [00:10:04]:
Well, that’s a good question. On my website, I have a popular page for business brokers. It’s called 62 Reasons for Sellers Hiring Brokers. Dozens of brokers have copied that page and it’s on their website because it promotes them. Here’s what Buyers bring to the table the guy who did their divorce, that’s the lawyer, the accountant who did their taxes, that’s their accountant. I show up and say both of them get fired. Here’s who you need somebody who specializes in this work right there is a big benefit and then we just go from there.

Jason Cutter [00:10:42]:
Yeah, makes sense. What’s the biggest thing you see with a buyer who’s gone through the process? They the, you know, all of your checkpoints along the way, but they’re still not ready or they’re still not right. Is there anything that jumps out as far as like the buyers who maybe they, they did the homework but they’re still not a good fit or not right or not ready.

Ted Leverette [00:11:12]:
The process with me is that searcher marketing plan takes about 20 hours for my new client, the buyer to handle that work. In that 20 hours, we have done a deep dive. If I tell them they are qualified, brokers will agree they are qualified. Lenders will agree they are qualified. So the first step is that marketing plan which basically says why should anybody pay attention to me? We show our stuff to the brokers and the lenders and the lawyers and accountants. Once they pass that test, we immediately go to search. How do we go to search? Well, like, well, I know this seems like common sense, but not everyone does this. We only go out and look for the businesses that we think sellers would be willing to sell us.

Ted Leverette [00:12:02]:
So we have very narrow search parameters. We go first, we go to business brokers. We’re looking for the low hanging fruit. We say, do you have a listing like this or something similar that could capture this criteria. If the broker says yes, we jump on that because brokers got the incentive we have get a done deal. If it’s a good business, priced properly and financeable, we go to pre loi due diligence. If it passes our initial tests. And brokers know what that is.

Ted Leverette [00:12:31]:
Everybody knows, I mean anybody knows anything about pre aloy due diligence if it passes the buyer’s test, meaning we touch base with the lawyer, we touch base with the bank, we touch base with the potential lender, a deal maker, a guy like me guiding this process says yep, we’re on track. We submit the loi work done. At that point, as you know what happens, it goes into formal due diligence. That’s a completely different ballgame.

Jason Cutter [00:13:00]:
And then last question before we move on to the next section is talk to me about the times when brokers, like the listing broker side of things, don’t like you being involved. I know there’s a lot of positives. I know there’s a lot of good parts to you being involved. Right. Like, we both are aware of that. I think it’s great. But I’m just imagining those scenarios where they don’t. And I have my guesses at why they wouldn’t.

Jason Cutter [00:13:25]:
But I’m curious what you have experienced in all your years.

Ted Leverette [00:13:31]:
Well, I make their job easier. That’s number one. They know that they’re talking to my client. If they don’t serve them, that buyer is going to own a business down the road. So there’s that. You know, I’m not sure what would be more important than that. They know if they’re working with me, I’m going to help them get a done deal. No.

Ted Leverette [00:13:52]:
Okay. If you’re, if you’re asking me, do we kill deals? Yeah. If it’s a deal only a would go for, we’re going to kill it. So look at hundreds of brokers out there. Know me. Hundreds. I’ve done deals with hundreds of them. They, they know that my clients are not the people they present mediocre businesses to.

Ted Leverette [00:14:12]:
They know that Ted Leverett and the lawyer and accountant are going to kill that deal in the first moments. But if they can show us finance ability up front and they can show us the seller is prepared and they’re prepared and they treat us well, we are going to get a done deal with them. But if they’re posing crap, we won’t. This never, almost never happens. I mean, this hasn’t happened to me in decades. It did happen decades ago. I’m in Florida now. But this business basically came out of Seattle.

Ted Leverette [00:14:44]:
When I was in Seattle in the early years. I’m talking decades ago, I was a broker basher. Why? Because I was a new kid on the block. Nobody ever heard of a business buyer advocate. There were only two books written on the topic back then. So I was making it up as I went along. And one of the ways I did it is I’d say, you know, brokers are going to take advantage of you. You really need to pay.

Ted Leverette [00:15:04]:
You know, that kind of stuff. Well, that shut me out of Seattle instantly because the brokers were friendly back then, probably like they are now. And they just sent emails to one another and said, oh, we’ve got this idiot in town. He’s a broker basher. Tell all buyers he’ take advantage of you. He’ll suck your money and you won’t ever get a deal. Yeah, that did happen. But I figured out how to stop doing that about 27 years ago now I’m on the deal making table with brokers to get the done deals as long as the deal is worthy of being done.

Ted Leverette [00:15:36]:
So no brokers out there, if they know me and have seen my work, they, they know they can trust me. In fact, they read my book. That’s how I hear about them.

Jason Cutter [00:15:48]:
And I love the story too, because we talked about this when we’ve spoken before, how you really just upset everybody with the mode that you were in in the early days in Seattle. And then you kind of had to, you know, switch your, your, your mode and your conversations and really like, you know, put your, put your, put your hands out and kind of get back into the good graces in the industry. And, and what I appreciate about, about you is that you realize that and you did it and you made that evolution. Some don’t. Some will just blame everyone else. Some might just stop the business and say it failed because of X, Y and Z externally. And you realize like it wasn’t the right angle of the game and that for you to be successful, to help your clients be successful, which then ultimately helps everyone be successful. Now it’s just a co, co op thing, right? Like everyone’s trying to win the same game together.

Jason Cutter [00:16:39]:
It’s not you versus them. And if you’re representing buyers in the right way, the right buyers, and it’s a good listing, then everyone’s going to be happy. Right? You’re not taking anything away from anyone for, for you to be successful with your buyer. So I, I love that you, you realize that and shifted and then, you know, have, have evolved well past that over all these years.

Ted Leverette [00:17:03]:
Well, you know, in that first year I always had a stomachache. Now I was young so you know, I had to stamina to handle it. But I always just, you know, I just sort of felt dirty and tense and when, and then actually it was a business broker, a business broker who was friendly with me because he was a neighbor. He said, look, just chill out. Yeah, there are a lot of us brokers who you need to be careful of. Just focus on our good listings and then focus on good brokers with good listings. And if you do that, Ted, you don’t have to, you don’t have to be our opposition. We’ll help you close the deal.

Ted Leverette [00:17:40]:
Because I get paid too when deals close. Not much. I get most of my money in fixed fees like lawyers, but sometimes I’ll get a performance fee or a completion fee. So I’m motivated to get a deal done as Long as it’s a good one. This is why if you go online, Google Ted Leverett, no dirt, zero. No lawsuits, zero.

Jason Cutter [00:18:02]:
And I love that, and I love that advice that broker gave you, which is, and I think this is the important part, is that if you’re representing good buyers and then you’re finding a good listing, even if it’s a bad broker, but it’s a good listing that makes sense and it’s, it’s valuable and it’s a win for the buyer, then why not? Right? And then if you can find good brokers that are trustworthy, that are professionals, that are deal makers with valuable listings, then focus on those and send, you know, put those on your, your good list and just ignore the rest. The used car sales brokers that are just throwing crap up, you know, against the wall and, and seeing what happens. Right. There’s, you know, you don’t have to be against them. Just don’t, you know, you vote with your money, right? Isn’t that what they say?

Ted Leverette [00:18:50]:
Most of the people who’ve hired me weren’t born as a searcher yesterday. They’ve been beating around with the brokers or they’ve been on various social media. Nobody. It’s like going to the doctor. My knee hurts right now. I injured it. I’m not going to the doctor until I can’t stand up. Nobody hires Ted until they hit the wall and realize, oh, crap, I’m going to have to pay this guy because my lawyer seems to take me in the wrong direction.

Ted Leverette [00:19:17]:
The accountant is a numbers guy. I need to talk to a deal maker. So that’s the magic we’re looking for. I think brokers owe me a lot of money. Some of you. Here’s why. The really lousy brokers, we’ve helped you close deals. You got paid and you got paid a lot more than me.

Ted Leverette [00:19:35]:
So we now, without me, these same buyers would run from those brokers.

Jason Cutter [00:19:41]:
Yeah.

Ted Leverette [00:19:42]:
Buyers are not tolerant of brokers. They don’t. Most buyers really are suspicious of brokers. They don’t. I don’t think they need to be as suspicious as they are, but they are. So if you don’t perform for them, you don’t. They just walk away.

Jason Cutter [00:19:58]:
Yeah, it’s.

Ted Leverette [00:20:00]:
If I’m there and it’s a good deal, I telephone the broker or email them nowadays and I say, hey, look, here’s the issue. You really pissed off my guy. We want the company. Can you just chill out a little bit? And they’ll say, well, what do you want? And we’ll and I’ll say, I don’t know, why don’t you and I now make a list of what we need to do to get this deal done. You tell the seller, I’ll tell the buyer, and let’s cut this crap of worrying about the personalities and I’ll have my buyer be a little nicer. And that’s what gets the deals done.

Jason Cutter [00:20:30]:
Yeah, and, and, and I, and I think that’s the key, right? And the, the buyers having some, some representation, which is you, and then being able to get deals done. I, I think, you know, it’s, it’s the fundamental thing that’s true in many other industries that are similar to this, like real estate agents, loan officers. The barrier to entry is so low to be in the business, to call yourself that title that it doesn’t mean you actually know what you’re doing or you’re qualified or you’re professional. Like that comes if you choose to be and if you have the experience and the education you put in the learning time. But you can do very little to call yourself a broker and try to get a listing, which is probably what those buyers are experiencing when they’re coming across that. So let’s move to the next part because I’m excited about this because I know that we’ve talked about it and you have some ideas here. And so this is the business broker growth playbook section. So this is your, your, your.

Jason Cutter [00:21:28]:
I, I hate using the word hacks, but it’s true. The hacks, the tips, the ideas for brokers growing their pipeline and growing their business. Now what’s interesting and fascinating is you spent your whole career like we’ve been talking about on the buyer side and never a broker. But you have the fun distinction of seeing tons of brokers from an unbiased standpoint and basically seeing which ones are successful, which ones aren’t, what working, what’s not working. And so you have like this third party view of the broker world like myself, except many more decades of experience. And so let’s get into these. So I’d love to know your top strategies, your top tips, your top things for brokers who want to grow their pipeline and be successful in that standpoint. So what’s number, what’s the first one on your list? Might not be number one, but what’s, what’s the first one on the list?

Ted Leverette [00:22:18]:
Oh no, it’s number one. Let’s start with it. And after I talked to you about doing this podcast, that next morning I read an article that just blew me away and it’s how it became number one on this list. There’s a sales trainer out there, world renowned. Her name is Sherry Leviton. Here’s what she says to people in sales. Business brokers, me, all of us, too many people think about the sales process instead of the buying process. And you know, I read that and I thought, wait a minute, that’s what all this is about.

Ted Leverette [00:22:56]:
Brokers want to know how to close more deals and they want to know what goes wrong with buyers. Well, I’ll tell you what I see with brokers and this fits into what Sherry says about focusing on the selling process, not the buying. Another way to look at it is what’s in it for them, not just me. If you’re the broker, what most brokers do is they pitch their listing thinking that has enough legs. It doesn’t. We can talk more about that later. Three things. There are a lot of brokers who are good at attracting what searchers and they’re good at even motivating those searchers to take a look, see at the business.

Ted Leverette [00:23:32]:
So that’s just that little touchy feely conversation. The second group of brokers, well they’re good at helping actually sell the business. But guess what? Like, like Sherry says, few brokers are good at marketing and sales. In fact, one of the leading business brokerage organizations out there in training, been around forever. It’s where these people go for their training. Last month sent a newsletter out and said we need to help you get that right. There’s a big difference between marketing, which means attracting buyers and selling businesses. What I like to talk about is that last group.

Ted Leverette [00:24:09]:
What is this going to take to make the sale?

Jason Cutter [00:24:14]:
Yeah, yeah. So, and I think it’s great that you’re bringing this up as the first one. One of the standpoints is that as humans we’re all pretty self centered and so we think everything is about us and the world revolves around us, which is somewhat true, but not true. And so salespeople, which business brokers would be some they just think if I’m, it’s all about me and what I’m selling. And it’s from that perspective which is wrong. And there’s so many reasons why it’s wrong in this era, especially with Internet technology. But that buyer’s journey is more important than the sales part. Nobody cares about salespeople, nobody cares about, you know, that part.

Jason Cutter [00:24:56]:
The buyers just want what they want in their experience. And so what do you have for examples like where do you see that like especially you know, when it’s done right.

Ted Leverette [00:25:07]:
I’ll start with when it’s done wrong.

Jason Cutter [00:25:10]:
Okay.

Ted Leverette [00:25:13]:
Here’S what turns off buyers. It’s the first moment brokers, they go to your website and you say sign the NDA. Okay. I advise my clients with their lawyer. Sign all these NDAs except what we’re presented with are one sided NDAs that protect only the broker and seller. So guess what? If you, you provide a buyer that, and they’re under duress signing it, your trust has gone out the window or flushed down the toilet. At that point they know they can’t trust you, period. Use mutual NDAs.

Ted Leverette [00:25:46]:
The other thing is the, the brokers, they just don’t stay in touch, they don’t show, they care. And these are those soft issues about, think about what’s in the buyer’s mind, the psychological issues. And I, I can cover that in a little while because I have a few good tips on it. There’s something else out there. The average age I went to, not LinkedIn, to AI and I said to AI, what’s age got to do with it? What’s age? The, the, the prevailing age range for people selling the businesses that I get involved with, those lower mid market businesses is 58 to 62 years old. We’ll round it off to 60 buyers 20 years younger. You’re talking one whole generation apart. And that creates generational disparities.

Ted Leverette [00:26:36]:
It makes buyers crazy. They don’t understand it’s normal. And from the beginning, they’re beginning, I mean from the beginning they’re not trusting brokers and sellers. When I’m on the team, what I’m telling you is what I tell them. Look, there will be valuation gaps. Sellers are looking at their emotional involvement, their blood, sweat and tears when they’re forcing the buyer to price the business. And, but you know these younger buyers, they don’t look at it that way. All they care about where’s the money going to come from for my return on investment.

Ted Leverette [00:27:06]:
Don’t talk to me about yesterday. Show me the com sustainable competitive advantages. That gap right there makes brokers and sellers and buyers crazy. Someone like me tries to settle that down. Hey, even, what about this, the digital versus in person meetings. This is a big one. These 38 year old guys and most of my clients are 35 to 45. Everything’s online, everything.

Ted Leverette [00:27:34]:
And you asked me could we have a phone number. I got rid of my telephone. When AI started it was like I’m done with that. Everything now is digital. We use zoom meetings or this kind of a platform. Well, these small business owners are not accustomed to that. It’s not how they live their life. So brokers who don’t have this in their mind that there’s this generational disparity, the buyer may not be complaining up front, but they’re complaining to me.

Ted Leverette [00:28:01]:
And if they don’t have me, then it’s just why they don’t trust. They just don’t have the trust. And we’re gonna, by the time we’re done, I hope to show how to get that trust.

Jason Cutter [00:28:13]:
Yeah, that, that makes sense. I could see that with the, the generational side, the one sided NDAs, the, the just all of that makes sense. And so what about when it’s done right?

Ted Leverette [00:28:25]:
Well, when it’s done right, the brokers, and we’re talking about that first online contact where a buyer has played around on bizbuysell.com for example, and they see a listing that tempts them, they click it and up will come something that says give us a buyer profile and sign this NDA. And if we like what we see, we will send you a confidential information memorandum. I have no problem with that. I believe brokers need to screen out searchers even more than they already do. So I think that’s wonderful. Here’s where hits the fan and it’s not good. The broker gets it back. And of course you got eight others that same day and he’s busy with two other listings.

Ted Leverette [00:29:16]:
He’s got a seller who’s, you know, complaining about a buyer. In other words, the broker’s world is so chaotic, a day or two goes by, guess what? Searchers are like babies or puppies when they have to eat or poop. It means now. So if you get that NDA signed and you get that buyer profile that they don’t like filling out, you know, name, address, phone number, how much money you have, what’s your career, none of them like it. If you don’t get back to them fast, they’re mad at you. They’re mad at you. And guess what they’re also doing. They’re, they are now in a click fest, a festival.

Ted Leverette [00:29:55]:
They’re clicking everything else on biz by sell and they’re, they’re, they’re shotgunning that out. This is a big mistake for buyers who do it, but they do it because they are not patient. You need to get back to them lickety split nicely.

Jason Cutter [00:30:12]:
It’s true. Right? Because now in this era, which the brokers might not fully be realizing it, the business sellers might not be realizing it. But thanks to technology and thanks to what we have within our hands, arm’s reach at all times, we expect everything instant. Right? We, if, if something I order online takes more than a day or two, I’m, I’m unhappy. Right? And I think most people, especially your, your general buyer demographic, age is, is, is used to everything occurring and happening instantly. And so that delay just feels like forever and then it’s just going to make someone move on or feel like they’re dealing with someone who’s not on top of it. And yeah, I could see that being, I could see that being a big deal.

Ted Leverette [00:30:56]:
Could I give you three good tips since you asked? I operate on the hurt and then rescue field of marketing. If people don’t feel the problem, they’re not looking for the solution. Brokers, if you just do these three things, you will differentiate yourself. Believe me, almost no brokers are doing this. Well, number one, listen more than talk. I know your mom told you that. It’s not just listening, it’s repeating back and showing you understand the buyer’s perspective. You don’t have to agree with it and you also don’t have to tell them that up front.

Ted Leverette [00:31:32]:
String them along for a while. Remember, these buyers are presenting to you what they think you need to hear. You’re not really getting to know that person. So you don’t need to reveal what you don’t like yet. Because guess what? Sometimes people with money who can do the deal, you know, they have abrupt personalities and you need to fish a little bit to find out who they really are. Spend some time. They’ll love you for it. Because most brokers don’t.

Ted Leverette [00:31:57]:
Number two, reliable. Do what you’re going to promise and do it on time. I hear the complaint almost every encounter with brokers. I, I sent the email. He responded. He said you would get back to me by Friday. It’s now been two weeks. Guess what these buyers do.

Ted Leverette [00:32:17]:
Trust me, there are on. I’m not going to name them in this show, but there are online venues where people complain about brokers. The big one is Reddit, but there are some more private ones just for our world. Brokers who do that, they get named, they get shamed. This is not smart. So do what you say you’re going to do. Know they’re impatient, do it on time. The final one.

Ted Leverette [00:32:38]:
Three. Clarity. You know what, we don’t like surprises. Just tell us what’s the scope, what are the steps and what are the timelines. Give us just those three things. Buyer, I expect you to do These four things in the following order by Friday. If you cannot, that’s what brokers say. What they could continue to do is say, can you do it? And if the buyer says, well, you know, I have a job or you know, I’m not that kind of person, I just can’t go that fast.

Ted Leverette [00:33:09]:
This is where the negotiation starts. Well, what would work for you? This is really important. When, when brokers say to. And sellers, when they say to buyers, well, what could I do to satisfy you? All of a sudden you get to the truth. We don’t hear that all the time. I know this sounds, these brokers, if we’re listening to this, I know if you’re not one of these people, you’re going, oh, why are they wasting time on it? Well, this is the world. Yeah.

Jason Cutter [00:33:37]:
And it goes back to your initial part of this, which is to focus on the buyer’s journey and the buyer’s process versus the seller’s process or the broker’s sales mode.

Ted Leverette [00:33:51]:
That’s a good point. All my clients get an action plan. They pretend it’s theirs, but it came from me. And what it says, and brokers love it because it’s only been tested a couple thousand times, is I’m the buyer. I know you’re talking to a lot of idiots. I’m not one of them. Here’s exactly what I want to do, when I’m going to do it and who’s going to help me and when they’re going to do it. So we spell it out and the broker goes, holy cow.

Ted Leverette [00:34:19]:
Now the broker at that moment knows, don’t show this guy any crummy listing. The other thing we do with brokers, because most of them don’t have what we want. They do not have what we want because we’re buying businesses larger than most brokers represent. But we know that brokers are, they’re prospecting amongst all sellers. So we’re looking for that broker who may not have the listing, but he knows the guy we need to meet and he’ll go to that seller and say, hey, I got a hot one here. He’s not interested in any of my inventory. He’s going to be all yours. Give me a one party listing.

Ted Leverette [00:34:52]:
And we tell brokers that, they say, get one party listings for us. If it’s a good deal, we’re done.

Jason Cutter [00:34:59]:
That’s great.

Ted Leverette [00:35:01]:
We have a broker. But unfortunately, more than half the time we, we have to go out direct because we will. My clients will be older than me or maybe dead before they do. A deal. So they, if, if we pass through the broker crowd and they’re just not ready for us, we ask them to keep us in mind and then we immediately go direct. We contact the owners of the businesses we hope are not for sale. And we say, could we talk to you about what we have in mind that’s going to make you a lot of money and give us an opportunity and we’ll sign NDAs and do anything you need to protect it. You’re going to love it.

Ted Leverette [00:35:41]:
Your lawyer is going to love it. Your bank’s going to love it. I mean, that’s the script is what we say. And owners say, we’ll prove it. What do they do? What everybody else does. They Google. They Google my buyer clients. They, they Google me for sure.

Ted Leverette [00:35:57]:
And what I say to brokers or sellers, go read my books. Read them. You won’t find a negative thing about brokers or owners in there. You’ll only find ways to make deals happen. It, it didn’t have to be how to buy the right business. It could be how to buy or sell the business. That’s a big selling point, isn’t it?

Jason Cutter [00:36:21]:
Yep. Yeah, I think that’s great. And, and, and all of this is tip number one that you had about focusing on the buying process and so much in there. I just took a lot of notes. I think this is super valuable. Anything else on that or are you ready for tip number two? Can only imagine what’s left on the list.

Ted Leverette [00:36:41]:
Well, I think what we ought to be talking about is what I call number two. It’s like, get it right up front, like price it to sell it. You know, brokers. Here’s the big complaint. I hear this from buyers all the time. The price of a listing only goes down when they have to. And that’s after it’s been on the market for so long that the seller and broker have been slapped around so much that all parties are just like, sick of it. I have very specific tips for brokers, how they can stop that crap and just nail the price as the listing goes live.

Ted Leverette [00:37:16]:
If you want to hear those three or four tips, I’ll give them to you.

Jason Cutter [00:37:20]:
Let’s go.

Ted Leverette [00:37:23]:
Here’s the sound bite. If it’s financeable, it’s saleable, period. Even junk? Even junk. Even lousy businesses. If it’s finance. So what? Number one, run a financing scenario. Go to your likely lenders. They do give you their template.

Ted Leverette [00:37:41]:
You don’t actually physically go to them, but you know what? Lender A and B are going to Want. If you submit a package and you say to your seller and to the buyer, here are two lenders that we commonly see involved in deals and here are the parameters you’re going to have to comply with. So it won’t matter what you and a seller think the price and terms are, you’re going to have to comply with that. So now we don’t have to argue, we just show the numbers and that becomes the no debate the justification. Because if a buyer or seller says I don’t like that. Well, if it’s pre listing, the seller should tell that owner to go pound sand. If it’s after listing, the broker should say didn’t I tell you the lender’s rule? Didn’t I tell you that? Kind of like when you want to buy a house, you can have any price you want, but the mortgage determines the down payment. The third one is.

Ted Leverette [00:38:34]:
The third one I got just to. The third one is keep in mind that how its finance is going to affect the price. There are books out there that I have that I’ve read that show the data. The higher the seller financing, the higher the sale price. So set that broker upfront with your sellers. You need to be prepared to sell or finance. Don’t wait to to negotiate it. Use it as bait.

Ted Leverette [00:38:58]:
Bait. And the final one is for brokers just walk away from searches and buyers who don’t get it. If you have to do what I’m doing right now, folks, don’t waste your time on them. You know what it’s going to be like.

Jason Cutter [00:39:15]:
Makes sense.

Ted Leverette [00:39:19]:
I’m sorry. Look, all we want is when we see that Simon, we’re going to run it through that lenders financing model. I’ll talk about that more later if it passes. We want to buy that business now. It’s just a matter of you show us why we should buy it.

Jason Cutter [00:39:36]:
Got it. Okay, so number three on the list I’m going to guess is regarding some financing.

Ted Leverette [00:39:41]:
Well again we got to go back to financing because remember, where’s my note? I made a note of this. Something about finance, you know. Yeah. If it’s financeable, it’s saleable. So how about financial readiness? Brokers are not very good, a lot of them at qualifying the sellers, the seller has to say if I’m a broker I will carry paper, period. If they don’t, I’m not sure why I’d take that in the small market, you know, the mid, lower middle market. I just don’t know why. Why? Because the lenders, the SBA guaranteed Lenders, they’re being forced for seller financing.

Ted Leverette [00:40:16]:
So just get that out of the way up front. Doesn’t that just make sense? We call it speaking the language of financing and the one that we look at is called debt service coverage ratio dscr. Remember, almost all buyers need financing and most sellers don’t want to provide that financing. Brokers, you need to bridge that upfront with your listings. If the business is not bank ready, we’re not interested, no matter how good it is. Not interested.

Jason Cutter [00:40:51]:
Got it? Now, I know that you said about walking away from, from buyers unqualified, unmotivated, you know, the, the potential buyers. But what about the seller side for brokers?

Ted Leverette [00:41:04]:
Well, as I say, it depends on what year, what time of year. But at least half of the deals that my clients complete, no broker. We start there, we give it a month or two, but you know, it’s birthdays are coming up, we don’t want another year. So at that point we go direct. When we go to direct, we say to the sellers, here’s what we’re going to do, here’s the timeline, here’s who’s going to be involved. Show us your team. Because if we know you, and by the way, we push this one real hard, we say, just do yourself a favor and ask the business brokers who the good lawyers and accountants are. We know you’re talking to the brokers.

Ted Leverette [00:41:44]:
You may not want to list with them, but at least ask them who they are or go online to like LinkedIn and say, who, who are the nice guys? Who are the lawyers and accountants who are not reckless deal breakers. They’re people who, if it’s a good deal, they’ll really help you get it done. If sellers won’t do that for us, we say, call us when you’ve got that person. Because they know it’s a waste, we know it’s a waste of our time. Yeah. And you know, I’m not sure this is coming through. Most buyers might not be able to do this because they don’t know how to generate enough leads. My clients do.

Ted Leverette [00:42:17]:
So if we don’t have a broker or seller who from the get go will lay out a plan we can all agree on that’s fair. We pass because we know they’re like buses. Another one will be by in five minutes.

Jason Cutter [00:42:32]:
And then what else? I think, I think that’s like four. Do you have a fifth one on the list? I feel like there’s a lot of tips, which is awesome.

Ted Leverette [00:42:41]:
Yeah. This is another one that pisses off buyers but when it’s done right, we love them. I can remember that time four or five years ago, I think, when it was done right. Effective gatekeeping. Hey folks, gates swing two ways. So your job, brokers, is to be the conduit, not the gatekeeper. You see, good brokers do not block direct buyer seller interactions. So what do the good brokers do? They say to both sides, I’m going to set the agenda, confidentiality, timelines, et cetera.

Ted Leverette [00:43:19]:
And then they’re going to say, my job is to keep you two talking to one another. And they actually try to do that instead of stepping away. And the third thing, this is the big one. Let the human element run. Let likeability and trust and chemistry do its work. And the, and nothing pisses off brokers more or at least as much as is being told by the broker. And they do it up front. You’ll never talk to that seller alone or in fact you’ll never talk to them at all.

Ted Leverette [00:43:52]:
Everything runs through me. Well, right now you’re the enemy. It’s just stupid. We like brokers. We like brokers who say, hey look, this is a competition, this is an auction, whether you know it or not. We’re looking for other buyers. So you can do anything you want from us, but we don’t wait for anybody. We like it when they say that.

Ted Leverette [00:44:13]:
And if they get another hot one, we’ll say, well, are you at the loi stage yet? And if they say yes, we’ll say, well, should we just check out for a while? Oh, they get real panicky then. And we say, and we say, well look, here’s what we have in mind. So we like to use a very informal. TED does, a very informal communication with brokers. Not like lawyers and accountants, not like the quality of earnings guys where it’s all about the money. Numbers. That’s not me. I tell my clients, if you’re going to spend time looking at numbers, I’m not your guy.

Ted Leverette [00:44:44]:
Deals are made on non financials. If a business has a history of profit, we don’t give a shit about it anymore. Oh, now what we want to know are what are the financials? The relationships with the customers, the employees, the landlord, the bank and suppliers. You show us that and if it’s making money, we’ll find a way to finance it. The non financial. So brokers pitch that, pitch that. Otherwise you get the accountant in Q of either points of view about, you know, how did you post this? And nonsense. I know I’m being outspoken, but you know what my career has only got a few more years.

Ted Leverette [00:45:20]:
I just want to deliver some value. These brokers have helped me my whole career other than that first year. So I’m trying to pay back. Okay.

Jason Cutter [00:45:29]:
And, and I appreciate it. I’m glad that you’re here and I will give you all the soapbox you want. I think all the stuff you’re saying is so valuable out there. And one of the big things I’ve realized from, from the time when I started the podcast and had had the concept of what I wanted the podcast to be about, which was, you know, marketing and pipeline filling, you know, it’s the business broker growth show focused on that to now. The evolution that I’ve had is that I just want to help the good and great people brokers succeed. And then for the bad brokers, the used car brokers, the ones who, you know, are just dabbling in it, I want them to go away. And so all of this stuff you’re saying completely resonates with me from just a sales and a transaction and a relationship standpoint. And so I love all of it.

Jason Cutter [00:46:19]:
Like I said, I’ve been taking lots of notes. I think it’s going to be great nuggets for the brokers who want to step outside of themselves, you know, and not just focusing on their sales process like we talked about, and, and focusing on the buyer. I mean, obviously their fiduciary responsibility is still to the seller, to that business owner. But you can’t win the game without buyers. And so you’ve got to, you know, you know, take into account all sides. So I love, I love all that. I think that’s amazing stuff. I’m super excited for, for people to check this out.

Jason Cutter [00:46:52]:
And then let’s pivot somewhat because the next segment of the show, this final segment, is the one that got away. It’s the lessons of the lost deal. And I know you have seen a lot of lost deals. You’ve seen them from the buyer side. I know there’s a lot of value in listening or learning from those experiences. I’m sure you’ve seen a lot of them, but what’s one that jumps out, you know, that you, let’s say buyer listens to this and they find this segment and they want to learn that lesson. The listing brokers hear this and hopefully it’s a cautionary tale. Like what, what comes to mind of, of all the type of things that you’ve seen.

Ted Leverette [00:47:35]:
It’s very rare for the people I know, the buyers who hire me, to have deals fall apart for Financial reasons, arguing about numbers, that’s extremely rare. The main reason they fall apart is the way brokers and sellers treat them. They don’t seem to understand that it’s the relationship that makes the deals. This is why we’ve seen so many deals where you go, what? Somebody bought that, somebody sold that? Well, it’s because there were some human elements at play. So remember the psychology, likability, flexibility. Broker, your likability, your flexibility is not as well as theirs. Number one reason deals fall apart are the human elements. And it didn’t have to be my job.

Ted Leverette [00:48:28]:
And I know lawyers and accountants can buy into that. It’s just sort of their job. But that’s not my job. I am the stickiness. I’m the glue. My only job is to put tentacles out like an octopus and grabbing anything that could make the deal work, dragging it together and trying to get brokers and buyers and sellers to quit shouting at one another and collaborate. If I do that well, they close deals and they don’t like one another. So what? They’re offended.

Ted Leverette [00:48:54]:
So what? We want to get the deal done. So try to. I don’t want to do this kind of work, by the way. I don’t like that. So just behave better. How’s that? Sellers and brokers, Geez.

Jason Cutter [00:49:09]:
I think it, I think it’s great.

Ted Leverette [00:49:10]:
Right?

Jason Cutter [00:49:10]:
I think I love that last part. Just behave better. And, and, and I think what’s fascinating is there’s, you know, and you remember a time, I remember a time where there wasn’t unlimited information at your fingertips when you had to go seek out people and things to learn something or to get that info. You couldn’t just go online and find it. And I think because there’s all this information and access to things, then all that really matters anymore is now back to the human element. Right. Is being good humans and just remembering what other people may want or need. And I love that you said that.

Jason Cutter [00:49:45]:
And I also love that you said you don’t like having to deal with dragging transactions through because of people who aren’t good at the human side. But I think it’s, it’s a very good point that that’s what matters most, the transactions. A good transaction will just happen. A good business for sale will, will happen. Like you said, if it’s financable, it will happen. It’s the humans that, you know, mess it up and cause it to not happen.

Ted Leverette [00:50:08]:
Yeah. You know, unless brokers and sellers step on a good business, it’s going to sell. Maybe not to the Guy or women you’re talking to today. Okay, I know what you’re looking for. You’re looking for a war story. That lost deal. I just remember you asked me that. Okay, I do have one.

Ted Leverette [00:50:22]:
It’s very brief. Can I tell you?

Jason Cutter [00:50:24]:
Go for it.

Ted Leverette [00:50:25]:
All right. This is a no deal. This was a deal that should have happened. It did happen. Not with my client. Why? We should have known up the front. The buyer, my guy signed a one sided NDA. Hold that thought.

Ted Leverette [00:50:40]:
We go through pre loi loi formal due diligence. We hire a Q of E. Guys wasting tens of thousand bucks. We have the lawyer beginning to draft the contract. The sellers over there delighted too. Woohoo. We’re going to sell this deal. Sellers spending money with lawyer.

Ted Leverette [00:50:58]:
In fact the lawyer for the buyer and the accountant or the buyer and seller were talking to one another. So ka ching, ka ching ka ching. The legal bill was going up. Broker shows up at the 11th hour just before the submitting of the definitive purchase agreement and says I got another buyer, an industry player, all cash. He doesn’t give a shit about anything. He knows who you are, he’s willing to pay. We got kicked out. The question somebody should ask a lawyer was what enabled that broker to continue shopping that offer? Could it be it was a one sided NDA and he had no obligation to not do that? And you’ll say, well maybe in the loi it said no shop.

Ted Leverette [00:51:41]:
Oh baloney. I mean, yeah, so that’s what goes wrong. I blame it on those one sided NDAs and brokers who do not behave. What? Honestly, by the way, I’m not somebody who thinks the brokerage profession isn’t professional. I’m one who thinks it is. They’re just a few bad players like in my side.

Jason Cutter [00:52:04]:
Yeah, and, and, and I think it really comes down to the, you know, setting expectations and just being clear. If you are shopping it around, making sure everyone knows, but also doing the right thing. If there’s a, a commitment and agreement that one party’s moving forward, then uphold that. So I think, I think that’s great. So for people out there listening, watching this links will be in the show notes. Best thing to do is to find Ted online. Obviously if you Google Ted Leverette like he said, you’re gonna find him his books, his LinkedIn, his website. The website is partneroncall.com you can find him on LinkedIn, you can find the YouTube.

Jason Cutter [00:52:43]:
You go on Amazon, you search for him. Like I said, the links will be in there. If you want to Email him. You can do Ted. Jleveretteartneroncall.com Just if you’re a buyer in the market, you’re interested, reach out to him. If you’re a broker and you’re just challenged and you’re struggling with buyers, I’m sure Ted be happy to help you refine that part and probably build a good relationship with you so that when he has that good buyer, qualified buyer, happy to make some deals happen. So, Ted, one final thing. What comes to mind? Any final piece of advice? Anything else? Else maybe you didn’t cover or anything you want to reiterate to, to leave the audience with.

Ted Leverette [00:53:23]:
Yeah. Hey, brokers, you still tuned in? I saved for last. It’s best. Most of the businesses, as you probably know, that any buyer looks at, even if they’re wonderful, they’re not going to buy. There will just be some reason, good reason, but it’s still a wonderful business. Guess what we do when we meet those owners who’ve interviewed us and we’re not going to buy their business? We say, you really need a business broker and we name names. We recently, just recently, we had a broker get two referrals, one from the seller that we bought and one from the buyer who bought two listings.

Jason Cutter [00:54:05]:
I love it. So. So make friends with Ted. That’s the key.

Ted Leverette [00:54:10]:
Well, not me. Be nice to my client. Because if you’re a good broker and they’re in your city and they’re looking at wonderful businesses that need a broker, we’re not going to recommend you up front. No, we’re not going to do that. Yeah. But when we say to the seller, looks, this is not going to work for you or me. Thanks for your time. You need to talk to Joe.

Ted Leverette [00:54:34]:
He’s one of the best brokers in Cincinnati or wherever.

Jason Cutter [00:54:40]:
Yeah, got it. Well, Ted, thank you for that last nugget. Thank you for all of this. Thank you for all of your time. I appreciate what you’re doing to help the buyers be successful and, you know, help the ones that are not just the get rich quick or following the influencer, reading the hot book in the moments. I appreciate that work and everything you shared. Ted, thanks for being here on the show and sharing all this with me today.

Ted Leverette [00:55:05]:
It’s been a pleasure. Be safe out there, folks.

Jason Cutter [00:55:09]:
And for everyone tuning in, make sure you subscribe. Wherever you found this podcast, if you found the video, you’re on YouTube, make sure to subscribe there. Got lots of episodes coming. We’re gonna be dropping these main episodes every two weeks and the after show every in between all those. So every week there will be something coming out. We appreciate you tuning in and hopefully you found this valuable. Hopefully there was lots. I know there was a lot.

Jason Cutter [00:55:33]:
Hopefully there’s lots that you took away from this to help elevate your as a business Burger M and a intermediary to help differentiate yourself from those other ones out there that sometimes can make things difficult. And until next time, stop hoping for deals and start growing your pipeline.