3 Lessons From the Hallway – Advisor Summit 2015

hallwaycrowdI just spent the last 3 days at a conference for Financial Advisors from all across the country. The content taught from the dais during various sessions was great but it paled in comparison to the wisdom gleaned just by rubbing shoulders with men and women who have been in the business for decades. I’m a relative newbie to the whole world of financial planning, just 4 years in but as one fellow newbie put it, “this room is full of legends”. After the first day I decided that attending conference sessions was merely a secondary distraction, something to do between the all important networking that happened in the halls outside.

So I started to approach these legends, introduce myself and ask them one question. “When I get back to the office on Monday morning, what do I need to start doing immediately that will ensure that I am back here not only next year but in 20, 30 or even 50 years from now?”

The following are 3 of my favourite responses.

1 – Know your purpose and demonstrate your value, (from 33 years in the business).  

This came from a regional manager who has not only developed a loyal client base but has been involved in training and developing financial advisors for most of his career. I’m a big believer in the importance of mission statements and that closely mirrors the idea of knowing your purpose. But demonstrating value is a bit harder. What that comes down to, according to this legend isn’t about you, it’s about showing your client what you can do for them. Rick Warren, in the first line of the Purpose Driven Life said it best; “It’s not about you.” It’s about what you can do for others.

2 – Ask good questions and let the answers lead you where the client needs to go, (from 53 years in the business).

The man who told me this started in the financial services business at 34 and is still working today at the age of 87! Oh how I would love to be as vibrant, healthy and engaging as he is at that age. His response came after he asked me a series of increasingly personal questions. How old are you? Are you married? Do you have kids? What did you do before you started in this business? Are your parents still living? What did your Dad do? Finally leading me to a discussion of what kind of insurance I currently hold and why I bought it. He then got a sly smile on his face and asked me why I had answered all of those personal questions that under normal circumstances would seem a bit off putting?  I laughed and said I see what you’re doing, you seem genuinely interested and sincere, and he was, oh that’s GOLD!

3 – Do What’s Right for the Client, (from 31 years in the business).

After making one of his first sales over 30 years ago this person’s manager noticed that as he drove away from the client’s home he was very quiet and appeared to be working something out in his mind. The Manager looked at him as said, “stop doing that.” Doing what? “You’re mentally calculating how much commission you just made aren’t you?” This goes back to the first one, it’s not about you.  If you concentrate on doing the things that are solely in the best interest of the client the commission will take care of itself, even if you don’t say anything, clients can tell when you’re in it for yourself and not them.  Stay focused on the client and you will develop loyalty for life.

After 23 years in business myself, the last 4 in this capacity, I know all of these lessons to be true. I’ve seen them play out time and time again across all lines of business.  It’s about humility, respect and genuine honesty. Those are the traits that make great salespeople and business leaders. You don’t have to be an extrovert or an introvert you just have to be true to your purpose, ask great questions and do what’s right.

For more information on The Meekonomics Project and our mission (purpose) to help people manage money better write to: themeekonomicsproject@gmail.com


Honest Emotions, 3 Keys to Building Deeper Connections

Really making emotional contact with people, inviting an emotional closeness either in a casual situation or a long-term relationship, requires that we open ourselves to them. It requires that we not put up defensive walls and that we accept others for who they are. – Stuart Brown; Play, How it Shapes the Brain, Opens the Imagination and Invigorates the Soul


I love my work. In fact most of the time it doesn’t even really feel like work at all.

Don’t get me wrong. There are aspects of my job that I would rather not do, like the reams and reams of seemingly unnecessary and redundant paperwork. But I have created a great system and daily routine that I follow in order to get that stuff done so that I can focus on the fun part, the people part.

Now I have made it no secret that according to the Myers-Briggs personality assessment I tend toward introversion rather than extroversion so it may surprise some of you that I like the people aspects of my work more than the technical but it’s true. The fact is everyone falls on a sliding scale between introversion and extroversion and recently psychologists have come up with a new term to describe people who skew closer to the center of the spectrum. They call them Omniverts. Maybe that’s what I should really call myself.

True, I still lean introverted but I can be comfortable in a social setting when called for without having to retreat into a corner most of the time and I honestly do love people, especially in small groups and one on one settings.

According to sociologist Stuart Brown, making emotional connections with people is the key to long term relationships. Here are a few ways I’ve learned over the years to make a lasting connection with clients that remains true to my personal leanings and respects their own boundaries.

1 – Let them lead.

There is nothing more off putting than someone who won’t follow you where you want to go. In conversation with clients small talk often leads to some very interesting and potentially lucrative destinations. Following the kernels dropped my your prospect during small talk can tell your more about that person in a few seconds that hours of well planned “fact finding” ever could. It’s spontaneous, honest and it shows you what your prospect is thinking about right now.

2 – Be honest.

If your client wants to talk about football and you don’t know the difference between a running back and wide receiver (I don’t) tell him that. Don’t try to be interested in something you’re not. Either the prospect will change the subject or he’ll try and educate you. Either way you’ve made a connection and have a basis for further discussion. On an emotional level honesty about the things that excite you and make you happy and the things that frustrate you or make you miserable leads to deeper discussion about the things that matter. Misery Loves Company as they say, and while that can be destructive shared frustration can lead to some great innovations and forward movement. By being honest about where you stand on things you’re opening yourself up to finding common ground and opportunities to work together on things that resonate beyond just the cash register.

3 – Respect the boundaries.

When you follow people’s lead and are honest about how you feel about things people will generally let you into their lives in a deeper and more meaningful way than they otherwise would. But there will always be places that you are never invited to go. Don’t push it. Doing business with friends is always a touchy area, trying to make intimate friendships with people who are business associates first is even harder. Few things can derail a promising business relationship faster than crossing a personal line uninvited.

Everyone has boundaries don’t be afraid to enforce your own as well. Making friends with your client’s is not the problem, so long as everyone is in agreement about the facts of your relationship and no one feels like things have gone too far.

Human beings are emotional creatures. Effective relationships, even business relationships are fraught with emotion. Being in tune with and respectful of emotions, both ours and other peoples is key in building long lasting relationships, both personally and in the business world.

What other things have you learned about emotions in relationships?  Tell me your stories…

Dancing with Skeletons

dacing skeleton

We’ve all got skeletons in our closets. Those things in our past we’d rather not think about and we’d rather keep to ourselves. But as any politician can tell you, no matter how hard we try, skeletons have a way of finding their way out of the closet and into the open.

  • Bill Clinton
  • Anthony Wiener
  • Jim Baker
  • Enron
  • NorTel
  • BreEx
  • Bernie Madoff
  • Lumber Liquidators

The list is endless. All people or organizations that tried to cover up and hide issues only to have them jump out and steal the headlines at the worst possible moment.

Skeletons tend to get lonely so they escape the closet when you least expect them. They’re like little kids that just want to be acknowledged, so they jump out right when you are negotiating an important business deal, being considered for a promotion, getting serious with your girlfriend or just going through life minding your own business.

It’s in the quiet times that skeletons scream “look at me, pay attention to me!”

Over the years I’ve learned that the best way to deal with your skeletons is to let them out and have a dance party from time to time. Dancing with your skeletons helps put skin on them, making them a little less scary. It’s about being honest with yourself, acknowledging the parts of you that you aren’t proud of and making it clear that what has shaped you, while maybe not pretty is still a piece of who you are.

It also gives you an opportunity to control the narrative. If I can tell you what’s living in my closet, in my time and on my terms the damage to my reputation can be mitigated.

As a financial coach there are few things in my past that, that if brought out at the wrong time, could damage my reputation and affect the way people do business with me, so I’m honest about them and I make them part of my initial conversations with potential customers.

  • I’ve been bankrupt

  • I’ve gambled illegally

  • and I’ve lied about it

I’ve done all of those things in order to make enough money to pay my bills. But my time would have been better invested taking steps to reduce my expenses, pay off my debts and increase my income honestly. I’m not proud of my past, but it’s helped shape the person I am today.

We’ve all got skeletons. Dance with them. Control the narrative, or it will control you.

Check out this dancing skeleton for inspiration…


Persistence isn’t very glamorous. If genius is one percent inspiration and ninety-nine percent perspiration, then as a culture we tend to lionize the one percent. We love its flash and dazzle. But great power lies in the other ninety-nine percent. – Susan Cain; Quiet, The Power of Introverts in a World That Can’t Stop Talking

If there is one thing an Entrepreneur needs its persistence.

People use different ways to describe the quality of persistence. They call it heart, drive or gumption but what they really mean is persistence.

The history of the world is full or stories of persistence, people who had a big idea or a big vision and worked at it, day and night until they became an “overnight” success. But we all know there is no such thing as an overnight success, unless by overnight you mean people who work while the rest of the world sleeps.  Entrepreneurs, ministry leaders and just everyday folks who want to be successful in their endeavors know that persistence is the key to success.



Three Feet From Gold

There is a piece of American history that has often come to mind for me whenever I think about persistence. It’s one of those stories that is hard to verify but as a result has taken on the qualities of folklore.

Apparently there was a man who went into the mountains in search of gold. He found a small vein a decided that he would need a lot more help in the form of capital investment in order to make his mine profitable so he covered up the vein and went back to the city to raise the needed money. When he returned, deeply in debt, and started digging it turned out the vein was not nearly as profitable as he had originally hoped. He was eventually forced to sell his claim and all of his equipment to satisfy his debts. Years later the new owner of the mine began digging in the same spot and just three feet from where the original owner quit, hit a mother-load of gold worth millions.

People have used this story to explain and further a variety of agendas. I most often hear it as an inspirational tale of persistence but it can also be given as a cautionary tale about the toll of too much debt. Had the original owner built out his business more slowly he could have purchased equipment with cash and not have had to worry so much about making payments on the debt before the vein paid off. But at the end of the day the idea remains the same.

Persistence pays.

I tend to write with a double emphasis on entrepreneurship and Christ-following. The story of the miner who quit just three feet from gold has applications and implications in both worlds. The call of the entrepreneur and the Christ-follower are similar in that both have a vision for the “now and the not yet”. Persistence is required in both cases to see the vision come to fruition. So the next time you are tempted to loss heart, remember the story of the miner who was three feet from gold.

Pray and dig a little deeper. The reward could be great.

I press on toward the goal for the prize of the upward call of God in Christ Jesus. [Philippians 3:14]

Time Management

Sooner or later the great men turn out to be all alike. They never stop working. They never lose a minute. It’s all very depressing. – V.S. Pritchett

time management

Time Management is a myth!

Time is a constant, it happens no matter what and you never get a say in how it does things. You can’t manage time, so stop trying.

You can and you must manage priorities.

Time is the great equalizer. Every night when the clock strikes midnight each and everyone one of us is given anew the same amount of time as everyone else. How you prioritize it is up to you but we all get the same number of hours in a day.

“I don’t have enough time” is a bull-@#$% answer. What you really mean to say is “I don’t want to make any sacrifices to make this happen. It’s not a priority.”

There are a million time management tools on the market today. From simple to-do lists to elaborate Day Timers and smart phone apps. But when you take a close look at them they all come down to one thing, they all show us what our priorities are.

Calendars and to-do lists are amazing things. When you schedule a task, make it a priority in ink, something remarkable happens. You seem to “find the time”. The fact is the time was always there, all you needed to do was tell it what to do, what your priority was.

The British writer and literary critic Victor Pritchett, quoted above, lived for 97 years. In that time he wrote over fifty books and hundreds of short stories and critiques. He never stopped working. At times he may have felt like doing other things, but he understood that unless he made things a priority, his work wouldn’t get done.

Last week I wrote about failure and being willing to learn from mistakes. It all comes from the same place. When we run out of time we think we’ve failed, that people with boundless energy and continued success are somehow better than us and have it easier managing their time than we do. But nothing could be further from the truth. You can’t manage time. Time just is. You can only manage your priorities.

Show me a successful person and I’ll show you a person who knows how to manage their priorities.

So what are you doing today to better manage your priorities?

Are You a Leader Sheep?


In your relationships with one another, have the same mindset as Christ Jesus:
Who, being in very nature God,
did not consider equality with God something to be used to his own advantage;
rather, he made himself nothing
by taking the very nature of a servant,
being made in human likeness.
And being found in appearance as a man,
he humbled himself
by becoming obedient to death—
even death on a cross! [Philippians 2:5-8]

One of my future books is going to be on leadership. I’ve already started to write it. It’s tentatively titled; “Leader Sheep; Leading From a Posture of Submission in Ministry, Business and Life”. Last night I began meditating on this passage from Philippians and what it means from the perspective of leadership the way Jesus modeled.

Over the years I’ve read a lot of books on leadership. What I have found is that while many of them will pay lip service to things like generosity, grace and humility, at the end of the day the overwhelming majority give the impression that leadership is the domain of the macho-man (almost all of the authors are men) who takes no prisoners and unapologetically grabs leadership opportunities by the horns.

As a Christ Follower I find this approach to be unacceptable, unspiritual and downright unbiblical. Time and time again throughout scripture we find examples of “natural leaders” being shunned by God in favor of misfits, outsiders and even a few outlaws. God tends to use some of the most unworthy and incapable people as leaders.


Because leadership is never really about the leaders. It’s about the goal that has been set before them. It’s about the outcome, the people, the process and most of all from a Christ following perspective it’s about God.

That passage from Philippians shows us that the way Jesus led his people was through service, even if anyone had the right to lead with bravado and power it was him. Earlier the Apostle Paul tells his readers to live a life that is worthy of the sacrifice Jesus made even when faced with persecution.

Whatever happens, conduct yourselves in a manner worthy of the gospel of Christ. Then, whether I come and see you or only hear about you in my absence, I will know that you stand firm in the one Spirit, striving together as one for the faith of the gospel without being frightened in any way by those who oppose you. This is a sign to them that they will be destroyed, but that you will be saved—and that by God.  For it has been granted to you on behalf of Christ not only to believe in him, but also to suffer for him,.. [Philippians 1:27-29].

So how do we live our lives and lead in our ministries and businesses in a manner “worthy of the gospel”?

We serve. But we more than just serve in the way you would expect. Secular service is done with the expectation of a reward. Service sector businesses expect to be paid for their services and ultimately make a profit. Jesus taught us to serve with no such expectation. In fact he expected and ultimately received death in response to his service.

I am not suggesting that Christians in leadership should expect to die or that Christians in business shouldn’t expect to make money. But we need to change our understanding of what it means to lead in submission to God. We may never receive any recognition for our service and that’s okay. It’s not about us any way. All the leadership books and popular psychology on the subject of success miss that one key element. As Rick Warren so famously put it in the opening phrase of his book The Purpose Driven Life – “It’s not about you!”

Even Jesus had to learn to be submissive and give up on a traditional notion of success in order to be effective. Are you worthy of that kind of responsibility? Can you lead without expectation of any reward ? Are you a servant leader? Are you a Leader Sheep?

Work of Art

So my annual Christmas vacation is coming to an end.

Every year I tend to loosely follow the School year calendar when it comes to Christmas vacation. We’ve been programmed to do this since childhood and unless you work in retail it’s really a great time to slow down, spend time with family and get a few things done around the house. This year, because my wife is working in the school system I decided to follow it exactly, I left my office on Friday December 19 not to return until this coming Monday.  It’s the first full two week vacation I’ve taken in about 8 years!

But I’m an entrepreneur at heart. So regardless of whether or not I’m physically in the office, my work is never very far from my mind. Over the break I have continued to maintain my social media presence, as evidenced by this blog post, did a slight redesign of this web site, (ain’t it pretty?) and read 3 and half books.

I left the office two Friday’s ago with an empty inbox and a clean desk but I will return with a to-do list the length of my arm and a renewed sense of purpose and vigor that I haven’t felt in years! In short, I can’t wait to get back to work!


Because I’m an artist and the work I do is the canvas I paint on.

is it art

One of the books I read over the break was “The E-Myth Revisited” by Michael E. Gerber. For lack of a better term, Gerber is a business coach, his organization, E-Myth Worldwide, is dedicated to helping small business owners develop businesses that work even when they don’t want to.

The E-Myth, according to Gerber is that small business owners are entrepreneurs with big visions about what I means to run their own show when in fact most are merely technicians who got sick of working for someone else and figure that because they can do the work they could run their own shop.

But running your own shop requires a skill set that most technicians don’t have, it requires the ability to step outside of yourself and view the business as an entity in and of itself. Running your own shop is more about developing and over seeing a system and a set of tasks than it is about doing those tasks. Once you reduce your business to a system that anybody can run you are free to step away and work on other things, expand into to new markets and new product lines or retire while the business continues to churn away and make you a whole bunch of money.

If your business depends on you, you don’t own a business – you have a job. And it’s the worst job in the world because you’re working for a lunatic! – Michael E. Gerber; The E-Myth Revisited

As I read through this book I started to notice that I’ve been doing this kind of thing all my life. I have always been a systems oriented kind of guy. Just about every task I have in my business has been reduced to a set of check lists in my mind.  Here is what the first hour or so of my day generally looks like;

  • Read Social Media Feeds – Check

  • Write blog post – Check

  • Get Dressed – Check

  • Go to Office – Check

  • Listen to Voicemail, Read E-Mail, Review Calendar for the day – Check

And that little list only takes me to about 9:15 am on most days. To get me through the rest of the day I’ve written a series of daily tasks down on a set of yellow post-it notes that are stuck on the edge of my desk.  When in doubt, I return to the list.

I’m a systems guy because I’ve found that if I don’t follow a system I tend to get bogged down in the mundane busy work that is required of me and I never get a chance to develop or produce anything of lasting value.

The most menial work can be a piece of art when done by an artist. So the job here is not outside of ourselves, but inside of ourselves. How we do our work becomes a mirror of how we are inside. – Michael E. Gerber; The E-Myth Revisited

I love my systems. They keep me focused and they allow my creative mind to wander. I’ve even built time into my system to experiment with the things my creative mind comes up with while I’m physically going through the list of tasks that the system dictates. One day, when the business has grown large enough to support more staff I’ll be able hand off a portion of the system to someone else with little or no training because the system itself is what drives the business not me.  This will then free me up to develop more systems and do even more interesting and creative things.

I can hardly wait. Running a business is like creating a work of art. Like all art forms the value and the beauty is in the appreciation it receives from others. If people appreciate the business I have built it will be profitable and it will also be copy able, I’ll be able to do it over and over again, because of the system.

Is your business a work of art?

For more information on The Meekonomics Project and the art we help create for our clients write to themeekonomicsproject@gmail.com

Attention Fellow Bloggers – You’re Doing it Wrong!

I read a lot of blogs. I follow even more people on Social Media. I am very active on Twitter, LinkedIn and Facebook. I spend an average of 2 hours a day on-line, not including e-mail and the cloud based applications I am required to use for my day job.

In short, I spend a lot of time looking at what people are doing and how they are using the internet. Quite honestly I think what a lot of my fellow authors and “social sellers” are doing is about to blow up in their face because they’re doing it wrong and it’s starting to piss me off.

look at me

The internet and social media has done a lot to democratize business. Today anyone with an idea and some time can open an on-line store and be in business for free in a matter of hours. My own on-line presence didn’t cost me a dime. After a few months I did decide I needed my own domain name so I pay a few bucks a year for that privilege but really in the grand scheme of things I haven’t paid anything to be on-line. I have 4 active social media feeds, a word press site and an e-commerce page powered by PayPal to sell my books.


And you can do it too.

But here’s the catch. The internet is set up to provide free access to information for anyone willing to take the time to look and learn. The minute you start trying to profit from you presence online you need to be aware of one key thing. Unless you are willing to invest in a physical product, that will carry some production and shipping costs, there is likely someone, somewhere online who is willing to give away what you are trying to sell. So stop hiding your “unique” information based product behind a pay wall. We see what you’re doing and we don’t appreciate it, we’ll just keep looking for a free version somewhere else, thank you very much.

E-books, On-line video courses (especially the ones about how to make more money on-line), live chats with the author etc. Snake oil, every last one of them!

The worst are the bloggers who write about how to become a better blogger. They are constantly trying to sell courses that amount to nothing more than teasers on how to buy more courses. You know what I’m talking about.

Watch this video (only $5.00, pay here), the video says, come to an evening seminar (only $500, pay here), the seminar says come to our weekend course (only $1500, plus airfare, meals and accommodation, pay here). And what do you learn after dropping all those thousands of dollars? The same thing you could have learned at your local bookstore for about $25.00. Or free at the library.

So here’s my advice for how to stop these on-line charlatans:

Number 1 – If after you add someone to your twitter feed the first thing they do is send you a note about how to buy something, especially more followers, un-follow them immediately. They probably aren’t even a real person.

Number 2 – If you go to their blog and they have a pop up about a product behind a pay wall, stop, don’t read any further. Free e-books are okay but pop up adds in general are annoying. We’ll get to your product page eventually if you show us the value of your offering elsewhere. But don’t rush us, that’s just rude.

Number 3 – If they start sending you unsolicited emails about products behind pay walls, stop, delete them immediately and subscribe. This is the equivalent of telemarketers calling you at dinner or sales people following you around the store. Just stop it!

Number 4 – If every post on their blog is really an advertisement for a product behind a pay wall, a video course or seminar, stop, delete them immediately. This is not a blog; this is a store and probably a scammy one at that.

Don’t get me wrong, there are some legitimate marketers and products on line. Almost every serious retailer and author has a web page where they sell their products and services. That’s not the problem. The problem is when you assault your audience with advertising from the start and never let up. It’s like a used car salesman who follows you around the lot chatting in your ear the whole time. This tactic went out with plaid sport coats. It’s not the 1970s anymore we’ll buy when we’re good and ready.

Most people on-line are just looking for information and a little advice, if they want to pay for something they are no different than any other customer. They want value and most of them can spot a scam a mile away.

So give the people what they want. Give them information and show them were they might be able to make a purchase if they want to and then shut the hell up. Otherwise people will leave your store in disgust never to return.

I Don’t Know

The beauty of not having all the answers

i don't know

Early I my career I thought I had to be the one who knew everything in order to be respected. I built my brand within the organization as the “go to” guy for any and all questions related to systems, sales and customer service. Even the CEO came to me for advice. I was a hot commodity, a rising star.

My strategy worked for a while. As I got better at my job, I took on more responsibility and gained more knowledge and received more respect. Then about 10 years ago something changed. With the dawn of the internet and the age of Google, knowledge is no longer the power that it once was. Now the real power lies with the people who aren’t afraid to admit when they don’t have the answers. True leaders are those who are able to release the questions and allow their team to find the answers on their own. Leadership is less about being a fount of knowledge and more about being a sounding board for ideas and options.

Quoted in a recent article in Canadian Business, Bart Egnal, president and CEO of the Humprhey Group, a Toronto based executive training firm says; “When you say, ‘I don’t know’ what you are really saying is, ‘I want to hear your ideas’”.

Collaboration is the key in growing any business. The old fashioned way of building a career involved gaining knowledge, and hoarding that knowledge so that you could leverage it into ever greater achievements and advancement. Today that strategy doesn’t work. Hoarding knowledge can only get you so far. Now-a-days you need to be prepared to be generous with it or people will just go elsewhere to find the answers they seek.

Generosity, it seems has become a key trait of the most successful people. It’s not just generosity with money or time but also generosity with knowledge, (and graciousness with a lack of knowledge). A growing number of experts agree, executives who openly admit their knowledge gaps make better leaders, especially when they use their lack of understanding to empower people to go out and gain the knowledge they seek on their own.

Curt Hanke, CEO of Wisconsin-based digital ad agency Shine United, from that same Canadian Business article says it best. “No one likes to feel dumb, but once you give yourself permission to not always be right, all sorts of great outcomes happen.”

So the next time one of your team members asks you a difficult question feel free to pause and say; “I don’t know, what do you think?” And watch the synergy of collaboration take off.



Let’s Make a Deal

Business Planning is an integral part of any entrepreneurial venture. It’s been said that no business plans to fail, they just fail to plan. One of the most over looked parts of any business plan is succession. What do you plan to do with the business when you no longer want to run it or even own it someday? Failing in the area of succession planning will inevitably lead to a failed business. So today let’s take a look at two of the most common ways entrepreneurs can negotiate the sale of their business and retain value in a business that they purchase.

business for sale

A lot of clients who work for themselves don’t really own a business at all, they simply own their job. In a lot of cases, especially in regards to trades people and even small retail operations when you really get down to the day to day operations the number one asset of the business is the owners own entrepreneurial spirit. When an entrepreneur like that stops working all of the good will and client relationships they have built up go away. In that case the only value in the business is in equipment, inventory and referrals, and all of those things are depreciating assets.

In that case the most common way to sell your business is by getting fair market value for your equipment and then doing an honest assessment of the value of any client introductions that you might do for the new operator. The value of a client introduction is only as good as the first time that new operator does business with that client. If they don’t bring the same level of quality and customer service to the job as you did they will lose the client forever. Generally the value of a client introduction is one to two times the value of their average purchases after that they aren’t buying on the strength of the relationship they had with you, they’re buying on the strength of the relationship they have with the new operator.

For a “job-owning” type business by far the most common and fairest way to negotiate a sale is through the sale of assets. After the purchase is completed the new buyer may even choose to operate the business under a different name, that’s okay because the value of the business is less in the name than it is in the client relationships.

But if your business is a little bigger and a little less reliant on the personality and work ethic of the owner then you might want to sell it through a transfer of shares. Here valuing the assets of the business is done in much the same way but equipment is depreciated inside the corporation for tax reasons and the value of client relationships is much more heavily weighted in favor of the seller because the clients are more likely to stick around under new management.

Valuing a business of this nature is usually done using a multiple of revenue, say 2-3 times annual sales as it is assumed the equipment will eventually depreciate to zero and the customers will remain loyal through the transition because they were less tied to the individual owner than they were to the company itself. Businesses sold in this manner are also much less likely to go through a name change, at least in the short term because the goal is to make a smooth transition that the customers might not even notice.

Tax wise the seller of shares is better able to take advantage of capital gains exemptions and dividend tax credits as well. Although I’m not an accountant and am unqualified to give much in the way of tax advice this just makes sense on a broad level.

In both cases it’s a good idea for the buyer of a business to insist on a non-competition clause as part of the agreement. The last thing you want is to spend hundreds of thousands of dollars on a business with depreciating assets only to turn around and be faced with competition from an experienced operator sporting newer and better equipment that you helped finance by purchasing their old stuff. Not to mention their ability to cherry pick your best customers through old relationships and loyalties.

If you are thinking of selling a business or even starting one, start with the end in mind, like Stephen Covey says.  It’s always a good idea to think about how you will go about selling it someday. For more information on The Meekonomics Project and how we work with business owners around issues of succession and estate planning write to themeekonomicsproject@gmail.com