Back to the $4.3M deal I posted 2 weeks ago, because there's a second lesson in it that's arguably bigger than the first. This business holds certifications that give it access to contracts most competitors simply cannot bid on. Those certifications are a genuine moat. They're a real part of why the business earns what it earns. They are also owner-dependent and non-transferable. Meaning: the day the owner sells, the certifications leave with him. The buyer inherits the revenue history but not the mechanism that produced it. So what is that business actually worth? Not the multiple you'd put on the trailing earnings. You have to separate the earnings into two piles — what survives the transfer and what doesn't — and value them completely differently. In some deals the certified revenue is worth close to zero to a buyer who can't recertify. This is the part of valuation that spreadsheets don't catch. SDE and EBITDA tell you what the business earned. They don't tell you what the business will keep earning under new ownership, and only the second number is what a buyer is really purchasing. The general form of this question, which applies to nearly every small business you'll ever look at: - What produces the revenue? - Does that thing transfer with the sale? - If not, what's left? Owner relationships. A personal license. A founder's reputation in a small town. A certification tied to the owner's status. All of it looks like enterprise value on a P&L. Some of it walks out the door at closing. Ask that question early and you'll price deals better than brokers with ten years on you.

Is there a list available for the states that do not require a business broker's License?

Mentors I have had throughout the years have always taught me to lead from the front. As I venture into the Business Broker space. This week I dove head first and reached out to 5 individuals to simply see how they where doing? One lead to a conversation this morning and interesting enough he had a question for me as his online algorythms and interest have been coming up in the Business Acquisition space. He mentioned a few influencers and online individuals launching course that peaked his interest. I shared my vision and what I have in the works. It further peaked his interest and he shared that 1) he wants to purchase a business 2) he would like to work alongside me to grow it as a service he offers. We have a second call next week. Question for the group. Is it too early to potentially bring on an aspiring associate? He brings value as he has worked in the mutual funds and financial services space as well.

In the residential real estate space it is common practice to create an out of state broker to broker referral agreement. Commissions are always negotiable however can range in the lower/mid % range of GCI. Is this common in the business broker space?

Are their instances when owners of a franchise are attempting to sell or transfer their franchise? Would this be the same as an assumption subject to Franchisor Approval? Looking at this to see if it’s an avenue and marketplace that exists. Similar to those looking to get out of residential time shares. 😀