Most owners of small and medium businesses have never bought or sold a business.  It's natural that this would lead to not knowing what major terms are reasonable in an agreement with an investment banker, M&A advisor, or business broker.  While terms do vary from one firm to another the following link to an article, published by Axial Market, an on-line marketplace of professional deal makers, provides seven key terms of a typical engagement agreement:

                                        How to Write the Investment Banking Engagement Letter

There are a few of these terms for which Codiligent business brokers offers significantly more attractive terms.  A few of these include:

• The article indicates that a common practice is for a business sale intermediary to charge a monthly retainer.  While Codiligent has a small up-front one-time retainer - it is less than many investment banks charge monthly.  
• As the article describes, a 24-month tail is common practice in the industry.  A tail is the length of time after the engagement formally terminates in which the intermediary will still be entitled to compensation if a transaction closes.  Codiligent business brokers' tail is 12 months, or half of the standard length.
• Many business brokers and investment banks seek reimbursement for monthly expenses related to marketing the business, whereas Codiligent only seeks reimbursement in the rare case that there are travel expenses and will always seek approval from its client before booking travel.  We also believe that business travel doesn't need to be luxury travel.  In most cities, we stay in hotels that are $100 - $150 per night, not the Four Seasons.

It's amazing to think about the vast array of life-enhancing products and services that have been introduced and continue to be developed over the past 150 years as a result of free enterprise.  I personally see some of this with the business seller clients I serve.  They have all taken entrepreneurial risk to provide a product or service that they believe makes life better for others, and that by delivering value first, customers will voluntarily exchange some of their hard earned money for the product or service.  Unfortunately, free enterprise and entrepreneurial capitalism seem to be under assault in recent years.  The following video makes the moral case for the free enterprise system and focuses on three main points about why it should be embraced:

1. Free Enterprise safeguards lasting happiness
2. It promotes real fairness
3. It does the most good for the most vulnerable

The video is only 8 minutes long.  Whether you agree or disagree, you are invited to share your thoughts.

Have you seen CNBC's show "The Profit"?  If you are a business owner trying to build an enterprise that you'll be able to successfully sell to someone else I'd recommend it for being entertaining and insightful at the same time.  The premise of the show?  Turnaround artist Marcus Lemonis goes to struggling small businesses and makes a decision about whether to invest time, talent, and money into helping turn the businesses around.  What I like about the show is that Marcus identifies the most critical issues impacting the performance of the business and rapidly addresses them.  Even if your business is successful, when a buyer is looking at it, they will view it in a similar way that Lemonis does:  what are the problems, what are the opportunities, what type of resources will be required to fix the problems / exploit the opportunities, and will there be an appropriate reward for the risk being taken.

What Lemonis does not point out is the impact that such a change has on the business' value.  For a business of this type, an extra $300,000 of profits likely translates into a $500,000 - $900,000 increase in business value.  What do you think - is spending an afternoon changing prices on menus and in the business' Point of Sale system worth it to add $300,000 in greater profits with no additional work, while also significantly increasing the business' value?

Check out The Profit on CNBC - many of the problems that Marcus Lemonis addresses on the show are common.  Perhaps seeing how other businesses have been fixed, will inspire you to make changes to your business.  If your business has been in operation for at least two full years and has more than $1 million in annual sales, and you'd like help in identifying issues that you can work on that may be negatively impacting marketability and value, Codiligent offers a free Marketability Assessment.  Contact us at 888-324-5888 to learn more.

Have you seen the video below that parodies a typical conference call?  It's funny largely because it is so accurate.  Who hasn't experienced every issue being dramatized?  Although, they did miss someone attending in their PJs!

One of the tools Codiligent has been using recently in place of conference calls is Google+ Hangouts, the video conferencing tool.  In the past I've shunned video conferencing because everyone needed the same software which many people resisted paying for if only using for an occasional conference, it was far less common for people to have mics and video cameras on their computers, and the tools were typically not very reliable.  Today, most people have a Google account, and adding a free Google Plus account takes only a minute and doesn't cost anything.  When you use Google+ Hangouts you can have up to ten people on the video call.  My only complaint is that I've found the screen share feature for documents and power points doesn't work as well as anticipated (hopefully they will work out that bug) - but if you aren't planning on using a screen share this isn't an issue.   Below is a short 2-minute video tutorial on how to use Google+ Hangouts.  If you'd like to try this, but are concerned about having your first time be for an important meeting let me know - I'd be happy to connect with you on Google+ and help you do a demo session to get comfortable with it.

If you aren't interested in doing Google+ video conferencing but you are looking for a good screen sharing software to utilize during an audio teleconference check out the service screenleap which offers a free version that will allow up to eight people to participate for up to two hours per day.  Also, no software needs to be downloaded.  Screenleap creates a web link that you provide to participants who can then use it to see your screen share.

If you don't need screen sharing, aren't interested in video conferencing, but are looking for a reliable, easy-to-use audio teleconferencing service, Codiligent has been using FreeConference for years with great success.  While the free version of the service does not include a toll-free dial-in number, does anyone really pay much for long distance calls these days, anyway?  When you schedule a conference it will automatically send invitations to participants and will send you RSVP / confirmations.  The sound quality isn't the best I've experienced on a call but it is not bad, and the system is easy to use, reliable, and free.