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CASE STUDY: Business Brokerage 20-Year Veteran Still Relies on
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Glenn Haddad is Corporate Mentor for the Number One Business Brokerage in the World |
Ask Glenn Haddad what “VR Business Brokers” stands for, and he’ll tell you, with a smile, “Very Rich Brokers!” VR actually stands for Venture Resources, and it is the only full-time network of professionally trained business intermediaries in the world. The Fort Lauderdale, Florida-based company provides an extensive training program for its brokers, maintains one of the largest national databases of sold businesses to assist in business valuations, and has been rated the number one Business Brokerage in the world for 16 of the last 20 years. Its copyrighted slogan is simple and to the point: VR has Sold More Businesses in North America than Anyone©.
Haddad himself accounts for some small part of that. He’s lost track, but figures he’s sold somewhere between 800 and 1,000 businesses himself. “Pizza joints, cabinet manufacturers, computer training schools, a CD-ROM company, and even a tour boat outfit—I’ve sold almost everything.” Haddad has sold businesses for as little as $100,000 and as much as $5.5 million, always collecting a 10- to 12-percent commission as part of the deal.
Intermediaries, by definition, facilitate transactions between buyers and sellers. Some are transaction brokers, representing neither buyers nor sellers exclusively. Haddad, however, stakes out his own clear differentiation: “I represent the sellers, and make no bones about it. I have a vested interest. People know that going into a deal.”
“The biggest thing we bring to the table at VR is our professionalism,” says Haddad. “A lot of intermediaries are a bit less than qualified at this.” VR trains each of its brokers thoroughly so that they’ll know how to handle many types of transactions.
Haddad relies on three methods of valuing businesses:
- General rules of thumb. “Sometimes calculating simple things is enough to give you a general idea of what a business is worth: an annual multiple of cash flow based on industry ratios, the annual cash flow plus assets, or annual sales based on industry.”
- Computerized business valuation. “I always use ValuSource’s BES, even if I’m also using other valuation methodologies—because I’ve found if I use it I get 95% of my asking price, compared to just 85% of it when I use only rules of thumb!”
- Third-party valuation. “When you’re dealing with companies over $1 million, it makes sense to get a non-interested party to come in, who has no interest in either buyer or seller, and is just paid a fee, to give an independent valuation of the business.”
BES User From the First. Haddad didn’t start out as a business broker. Years ago, he was a corporate executive, and president of a $100 million dollar industrial parts manufacturing company. “But I got sick of moving my family around the country, and decided instead to go into business for myself.”
The original version of BES was designed to work with an early version of a Lotus spreadsheet. Haddad has used it ever since. “I can’t tell you that ValuSource’s BES is faster than other programs—or faster than doing calculations by hand—because I rarely use anything other than BES,” explains Haddad. “I use it because in my opinion it’s always accurate, and I use it because it always generates a higher price for me than other brokers get using just rules of thumb.”
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Glenn Haddad on why ValuSource’s BES is VR’s choice for business valuation software: Accurate: “By answering just 72 questions in about 45 minutes, a business owner gets a great general idea about what his business is worth.” Accurate: “ValuSource’s BES gives you rhetorical reports as well as mathematical conclusions. That’s twice the value you get from most packages.” Accurate: “When a business is sold, cash flow fluctuates. The old owner and all his relationships are gone. The new owner often infuses new capital. The discounted cash flow model gives you a way to recognize those variables.” — Glen Haddad, corporate mentor, |
BES lets you value any small business in less than 45 minutes, and automatically generates a 33+ page professional and comprehensive written report. “You do not have to be a financial professional to use it,” says Haddad, “but it gives you the same comprehensive treatment you’d get from a very expensive financial analysis, because it gives a rhetorical and mathematical explanation based on input data.”
To do an appraisal, a business owner simply needs to answer a series of questions about a business, review and assign weights to the evaluation methods, and set up a deal structure. The product comes with a video tutorial and a step-by-step navigator that takes you through the entire appraisal process.
As VR’s “Most Valued Mentor,” according to the company’s Web site, Haddad is the company’s expert for advice and consultation on structuring business transactions, office administration, business valuations, and for assisting new franchisees in establishing a successful office. Because of his many achievements and awards, Mr. Haddad has been honored with a listing in the “Who’s Who” directory of executives and professionals. ■
About ValuSource Software:
Recognized as the leader in the valuation software industry for more than 20 years, ValuSource develops a full line of products, including programs, databases, and report writers, that are fully integrated with Microsoft® Excel and Word.
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Glenn Haddad |
ValuSource |