I strongly encourage anyone in this profession to build referral relationships with as many Business Brokers in your area as possible.
Business Brokers list various businesses for sale and match them with interested buyers. They earn a commission based on the sale price of the business (usually 10%). They also assist in valuing a business and make recommendations to enhance that value before a sale. This sometimes entails cleaning up existing debts.
Due to the current economic conditions, there are many business owners trying to sell their businesses but finding it difficult given their problem debts. You will find most Business Brokers very receptive when you approach them and offer your service in negotiating discounted settlements before a sale. Your successful efforts not only benefit the business owner but also the broker by making the business more marketable and increasing their commission with a higher net sales price.
Most businesses in this situation will have several cases to work. In addition, your fees will be higher since there is no need to cap them. By tying the settlement payments AND your fee into the proceeds of the sale, everyone is assured payment from escrow at closing.
All parties benefit:
1. The owner gets more money.
2. The broker gets an easier sale and a higher commission.
3. The buyer gets a clean balance sheet.
4. The creditors get cash.
5. You get a substantial fee with assured payment.
Do a little on line research soon and locate business brokers in your area. Send them a short letter about your service and follow-up with a phone call a few days later. You will be surprised at how easy it is to build several steady referral relationships with these folks and have them send business to you.
Scott F. Soape
Monday, June 23, 2008
Wednesday, June 11, 2008
Realistic Fees
I would like to address a question that often arises regarding the kind of realistic fees that can be expected in this profession.
As you research different commercial debt resolution / debt negotiation training courses, you may come across some programs that promise huge fees. I know of one in particular that cites a "case example" resulting in a fee to the debt negotiator of $17,500. (This same training material sells for about $5,000 and I suspect the huge fee is used to justify the huge cost.)
Although large fees are certainly possible, we need to always be cognizant of our client's ability to pay both our fee and the settlement. Setting your fee too high will only result in another problem debt for your client and create a collection nightmare for you. In most cases, I recommend capping your fee to avoid this problem. My program provides some general guidelines, but it is entirely up to each professional to set your own limits. An alternative is to set your fee at a flat rate to ensure your client can afford your service and avoid "sticker shock" at the end of negotiations. A thorough interview early on with your client will help you determine the best fee structure.
HOWEVER, there are a couple of situations where this is not necessary. Negotiating discounted settlements to debts hindering a real estate sale or a business sale can be worked without any limit to the fee. Since your fee will be paid from the proceeds of the sale and your successful efforts will always result in more money for your client, there is no need to set a cap. These situations can easily result in fees of tens of thousands of dollars for large or multiple debts.
As an example, I am currently negotiating settlements with 10 creditors on behalf of a business seller with debts totalling over $100,000. To date, I have negotiated a discount of over $60,000. When the business sells in early July, my fee will be in excess of $18,000 and my client will still see a net benefit of more than $40,000. I am assured payment because my fee will be paid out of escrow from the proceeds of the business sale.
Substantial fees can always be expected in this highly rewarding profession and a comfortable ongoing income is possible, but don't get carried away by setting your fees so high they can never be collected.
Scott F. Soape
As you research different commercial debt resolution / debt negotiation training courses, you may come across some programs that promise huge fees. I know of one in particular that cites a "case example" resulting in a fee to the debt negotiator of $17,500. (This same training material sells for about $5,000 and I suspect the huge fee is used to justify the huge cost.)
Although large fees are certainly possible, we need to always be cognizant of our client's ability to pay both our fee and the settlement. Setting your fee too high will only result in another problem debt for your client and create a collection nightmare for you. In most cases, I recommend capping your fee to avoid this problem. My program provides some general guidelines, but it is entirely up to each professional to set your own limits. An alternative is to set your fee at a flat rate to ensure your client can afford your service and avoid "sticker shock" at the end of negotiations. A thorough interview early on with your client will help you determine the best fee structure.
HOWEVER, there are a couple of situations where this is not necessary. Negotiating discounted settlements to debts hindering a real estate sale or a business sale can be worked without any limit to the fee. Since your fee will be paid from the proceeds of the sale and your successful efforts will always result in more money for your client, there is no need to set a cap. These situations can easily result in fees of tens of thousands of dollars for large or multiple debts.
As an example, I am currently negotiating settlements with 10 creditors on behalf of a business seller with debts totalling over $100,000. To date, I have negotiated a discount of over $60,000. When the business sells in early July, my fee will be in excess of $18,000 and my client will still see a net benefit of more than $40,000. I am assured payment because my fee will be paid out of escrow from the proceeds of the business sale.
Substantial fees can always be expected in this highly rewarding profession and a comfortable ongoing income is possible, but don't get carried away by setting your fees so high they can never be collected.
Scott F. Soape
Sunday, June 1, 2008
Judgment Collectors
I have recently begun an email marketing campaign offering my Business Plan System to judgment collectors as an additional source of revenues.
Since developing my training program, I have tried to occasionally target specific professions with people possessing complimentary skills for commercial debt resolution. Many of these professionals have found they can quickly add extra income to their existing practices by incorporating my proven techniques. CPAs, Bookkeepers, Insurance Agents, Financial Planners and other professionals have found this business offers a new way to generate cash flow and often create new clients for their regular business.
If you have received an email regarding my program, I hope you will take the time to seriously consider how commercial debt resolution might fit with your existing business and add a new source of revenues without detracting from or diluting your other efforts.
Scott F. Soape
Since developing my training program, I have tried to occasionally target specific professions with people possessing complimentary skills for commercial debt resolution. Many of these professionals have found they can quickly add extra income to their existing practices by incorporating my proven techniques. CPAs, Bookkeepers, Insurance Agents, Financial Planners and other professionals have found this business offers a new way to generate cash flow and often create new clients for their regular business.
If you have received an email regarding my program, I hope you will take the time to seriously consider how commercial debt resolution might fit with your existing business and add a new source of revenues without detracting from or diluting your other efforts.
Scott F. Soape
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