Can You Afford To Employ A Dual Agent In A Business Sale?

The pitfalls of hiring a dual agent in a business sale transaction

Most people have heard of dual agency in the context of a real estate transaction and have some awareness of the issues surrounding dual agency. In spite of the inherent conflict of interest, many people do not mind transacting residential or commercial property using a dual agent. The reason is pretty straight forward - while there is risk of not getting good representation, the downside is typically small. Property values are driven by comps and cap rates and in most cases, the amount of money left on the table is a small percent of the transaction value. The commodity nature and relative liquidity of real estate also helps make buyers and sellers comfortable with the risk level.

But does this logic apply to business sale transactions? Businesses, compared to real estate, are illiquid and the valuations and the ultimate closing prices vary dramatically from business to business. The deal amount can also change dramatically through the duration of a deal. In Business sale transactions, not having a fiduciary agent working for you can cost you plenty.

Let us start with an explanation of "fiduciary duty". An agent used to represent a buyer or seller in a business transaction has a fiduciary duty. A fiduciary duty is the highest standard of care imposed at either equity or law. A fiduciary is expected to be extremely loyal to the principal. Among other responsibilities, a fiduciary must not put their personal interests before the duty and a fiduciary must not profit from the fiduciary position without express knowledge and consent of the principal. A fiduciary also has a duty to be in a situation where there is no personal conflict of interest and where there is no conflict of interest with another fiduciary duty.

In light of large sums of money at stake in a business transaction and these fiduciary responsibilities, let's look at the three key issues faced by a dual agent in a business sale.

1. Conflict of Interest

This is by far the most obvious and most damning part of being on both sides of a business sale transaction. A business intermediary is obligated to serve the best interests of his or her principal. Buyers and sellers by definition have conflicting interests. Who should the intermediary be loyal to? Is the agent looking after your best interests? Some agencies will tell customers that they will assign separate individuals to the buying side and selling side and create a Chinese wall.

In practice, the wall between the two sides in the same company, even in a large company with processes to cover this type of conflict of interest, let alone a typical small to mid market intermediary, is more akin to a sieve than Chinese wall. An agency in this situation is in violation of the standards of being a fiduciary.

2. Advocacy

Any competent agent will tell you that, when two principles' interests are in direct conflict, the agent cannot advise, advocate, or give allegiance to either party if such counsel gives one party an advantage over the other. Not remaining neutral or showing favoritism would be illegal and can make the agent liable to potential damages. A careful dual agent would shun the risk of advocacy and will tell you that they will be extremely careful to represent both parties equally and fairly. In other words, both parties lose "advocacy" for their best interests! Is this what you pay your agent for? Wouldn't you rather pay an agent that advocates your interests?

In practice, providing equal service to two parties is difficult and, even if the agent is highly ethical, agent's biases and self interests may tip the scales in difficult situations.

3. Sensitive Information

A business sale can take an extended amount of time and the seller or buyer may experience one or more personal events which, while not affecting the performance of the business being transacted, may have substantial impact on the negotiations. The agent may become aware of this sensitive information which, if disclosed to the other party, could harm one party and benefit the other. If the agent has one principal, clearly the agent will develop a strategy to minimize the impact to the principal. How does a dual agent handle this type of information about a client? Would you trust your sensitive information with a dual agent?

In practice, the agent ends up playing favorites or in a worst case scenario, one or both of the parties' interests are sacrificed in the interest of "getting the deal done".

Summary: Business sellers and buyers need to carefully pick their agent in a business sale transaction. Providing equal service to both clients is practically impossible in most deals. In the best case scenario, neither the seller nor the buyer is getting an advocate. In the worst case scenario, one or both of the parties are being sacrificed. For this reason some states do not permit dual agency. Much can be lost by employing agents who put themselves in the position of being dual agents and thus not living up to the fiduciary standards.

How To Make Selling More Really Simple

How many friends, family and associates do you know who have been employed in sales at some time in the past? How many of them weren't very good at it?

The answer to the first question is easy, probably quite a few. At some point or other in their lives many people have had a go at selling even if only as a student or in their first job. You may not know the answer to the second one... it's probably most of them!

Probably most of them.

Oh, for sure, they'll tell you that they did well. They'll tell you that they sold bucket loads! They'll tell you that they were a top sales performer. They'll even talk knowledgeably about how to sell. It's amazing what a good game people who only sold for a few weeks and never had any sales training can talk! They'll talk about open questions and wants and needs like they know what they're talking about but... seriously... most of them failed!

Not all, but most!

Top salespeople lead an enviable life. They earn great money. They win promotions. They have job security. They have respect, opportunity and friends. They have freedom, career choices and financial independence. They have fun, challenge and variety.

So if you had all of that, why would you leave? Mostly only if you weren't getting those things at all! I met a friend of a friend in the pub the other night and he looked scathingly at me when I said that I was a sales training expert and told me that he left sales for "more security" and opportunity. He earns in a month what I earn in a day. I recently heard that his company are looking to "cut back" in his department. Nuff said!

But why this tirade? And why today?

Simple. This week I worked with a really great team of salespeople. They were enthusiastic, interested, open and up for it. They embraced the fact that selling is simple and they wanted to master those simple skills. Sales is so simple in fact that nearly anyone could be very successful in sales. Selling is straight forward enough that everybody in the training room could achieve phenomenal success if they commit and take action...

So if selling is so simple why can't everyone do it?

Because selling is about attitude. Selling is an attitude. Selling is an attitude that leaves behind a trail of techniques. Now don't get me wrong here... sales skills are very important, very important indeed. Anyone who has been through a sales training programme with me or who has attended one of my sales seminars will know just how important I believe sales skills are...

But they're not the key factor in this equation. They're only a part of the equation. And on the other side of that equation is attitude. Without the right attitude you won't be able to access your skills. Frankly, without the right attitude, you're in trouble. If you can get and maintain the right attitude then you will make a success of yourself in sales and selling. Period. If you can't, you won't. It's goodnight sweetheart!

I would far rather hire someone with all of the right attitudes and potential and train them on the skills side than I would wrestle with someone with all of the skills and experiences who cannot be bothered any more! The former salesperson I can train because they want to learn, the latter I have to re-motivate and re-educate. Possible but much harder...

You've probably worked with or recruited a salesperson who had all of the right attitudes but was light on skills. They probably did pretty well. It usually gets put down to "beginner's luck" but it's not "beginner's luck", its "beginner's attitude".

And it's at this point that many people not in sales might be tempted to conclude that sales and selling is easy. Something for thickos, something that anyone can do.

Just so wrong!

The hardest thing in the world is getting, keeping, maintaining and improving the right attitude. In sales you never know when you might run into someone who is going to be your best ever client. You never know if the next sales call is going to win you a multi-million account. You never know which meetings are going to convert and which aren't...

And this makes it hard because you have to be on top sales form for every call. Top sales form for every presentation. Top sales form for every meeting. Top sales form for every negotiation. Top sales form for every conversation. Top sales form for every communication. Top sales form. Top sales form. Top sales form.

Not for you the mindless "going through the motions" that some non-salespeople can get away with for periods of time. You have to be switched on, tuned in, fully focused, up for it, raring to go, playing from a 10, on the ball...

Salespeople often say to me that cold calling (for example) is repetitive and boring...

Wrong attitude! You have to be on top sales form for every call. It could be your umpteenth call of the day but it is the initial contact with you for your potential clients. You have to be on top form, you have no safety net!

To make matters worse, salespeople get faced with problems and challenges every day. Problems, complaints, rejections and client objections are something we have to deal with every day and we must stay on top sales form.

So if selling is so simple, why can't everyone do it?

Because selling is about taking personal responsibility for your own attitude, your own behaviours and your own results. Selling is about smiling when you don't feel like smiling. Listening when you don't feel like listening, Caring when you don't want to care. Standing up when you feel like lying down. Pushing on when you feel like giving up. Firing on all cylinders when you feel like throttling down. Taking responsibility when you want to pass the buck.

Selling provides virtually unrivaled opportunities for anyone who is prepared to commit themselves. Your degree won't help you. Your qualifications and exams won't help you. Your CV won't help you. The only person who can help you is you. And that's too much of a leveller for most people.

What To Say When Your Prospect Only Has 10 Minutes

Have you ever had a prospect say to you "Tell me about your products and I only have 10 minutes"? What have you done in this situation? What was the response you received?

Before we look at three ways to respond, let's look at the "I only have 10 minutes" statement.

The "I only have 10 minutes" statement could be true and/or it could be being used as a protection mechanism. Your prospects want to protect themselves from salespeople and this statement is ideal for this. If they've told you they only have 10 minutes then they are not being rude when they leave the conversation in 10 minutes. Bear this in mind as you read on.

There are three options for how to respond when your prospect says "Tell me about your products and I only have 10 minutes."

Option One

You fall into the trap and tell them about your products. You talk non-stop for 10 minutes bombarding them about your products. You hope that something relevant is going to jump out at them as you talk, talk, talk and talk.

If you take this option you've acted like a salesperson. If you're acting like a salesperson your prospect will be counting the seconds until the 10 minutes are up so they can say "thanks very much, I've got to go."

By talking nonstop about yourself and your products you've committed 6 out of the 10 top sales mistakes and you will have more than likely repelled your prospect.

Option Two

You ask to schedule a time when they have longer than 10 minutes to talk.

On the surface this sounds like a sensible option but if they are using the 10-minutes as a protection barrier, it'll be difficult to get more time with them. Prospects don't want to let this protection mechanism against salespeople go.

If they really only have 10 minutes then think of it from their perspective. They are busy and their time is valuable. In the 10 minutes they've given you they really want you to show them why they should talk to you. So can you see that even if they don't have a real 10 minutes deadline, they'll probably still only want to give you 10 minutes?

Option Three

This option is the complete opposite of Option One where you talk, talk and talk. With this option you get them to talk, ideally for about 8 out of the 10 minutes.

With this option, instead of hearing "Tell me about your products and services." you hear "What's in it for me to talk to you?" You know you have 10 minutes for them to feel there is value in them spending their limited time having a conversation with you.

If they can see the value in talking to you, then when the 10 minutes is up they'll probably keep talking and you might find the 10 minutes extends to 30 minutes to an hour, etc. Also, if the 10 minute limit was real, then probably at the end of the 10 minutes they'll be the ones asking you to come back to continue the great conversation.

So how do you show them what's in it for them to talk to you? There are essentially two parts. Part one is where you set the context for asking questions and the second part is where you ask them highly relevant, targeted and short questions which get them to talk so you can listen.

Here's a very brief example of setting up the context for asking questions:

"There is so much I could l tell you but rather than waste your time talking about products that may or may not be relevant or of any value to you, I'd really like to spend the next 10 minutes talking about your own specific issues. That way when I do talk about our products, I'll be able to show you exactly where the value is for you. You never know we may even find that my products are of no value to you. If it's okay with you I'd like to ask you a few questions..."

If you take this approach, you're not acting like a salesperson trying to sell them something and consequently the salesperson protection barrier will come down. People are interested in people who are sincerely interested in them and want to help them solve their problems. They will want to continue the conversation as they will see it to be of value to them.

So in summary whenever a prospect says "Tell me all about your products and I only have 10 minutes" don't fall into the trap of talking and get them to talk instead. Ask meaningful, relevant and short questions and your prospects will want to talk to you - for much longer than 10 minutes.

Effective Selling - How Do You Dig Holes To Draw Water?

If a geologist told you that in order to draw water from a parcel of land, you would have to dig down 10 feet. The obvious best course of action is to dig one, 10 foot hole. The task would not be difficult and once you dug the hole, you would draw water. This is not a trick question and it certainly does not require a complex answer.

But too often, the ineffective sales executive over complicates their situation and strays from the salesmanship basics: building relationships, exploring customer needs, overcoming rejections, etc. The ineffective sales executive loses focus on the corporate strategy. They keep reinventing new things to do versus executing the tasks at hand. To the dismay of the geologist, the ineffective sales executive digs ten, 1 foot holes. Hence, they never draw water!

In our current internet age business environment, it is easy to become distracted. You are juggling an overflowing e-mail inbox, your customers are demanding more and more for less, and you may be experiencing sales management pressure to just "do something". It is easy to fall prey to the sales management fallacy of believing that hyper-activity will lead to immediate results. Unfortunately "busyness" does not close deals, persistent execution does.

As a sales manager, it is easy for me to spot out the "hole diggers". They are ones that show up every week on the sales call with some new close strategy or master plan to make a quick sale. This in itself is not the problem. The problem is that they are not persistent in executing all of the other strategies they were pursuing from the previous weeks, i.e. they did not finish digging their holes. This is one recipe for lack of sales execution.

My Direct Sales Experiences

Direct sales is a challenging job. Patience and persistence are the main factors that lead to success in direct sales. I was doing direct sales, promoting children educational materials for few years, the experiences helped me in my present job. Due to inexperience, I needed to follow my team supervisor on the job training. After one week, I had to do it on my own.

Initially, I was very nervous when talking to clients. I was unable to close any sales because of poor presentation skills and inadequate product knowledge.

me that I was capable. He told me that he could not close any sales in the first week. With passion and undaunted spirit, he finally closed six sales in the third week. He told me that success needed persistence and determination. He gave me few motivation books to read.

After that, I kept on learning the product knowledge and improving my selling skills. I finally closed four sales in the third week, it boosted my confidence.

Since then, I worked extremely hard and was promoted to sales supervisor after few months. I started to lead the new team and taught them whatever I had learned about direct sales. I remembered that I had won a camera during the team competition and a free trip to Bali as well.

Personality Traits - 7 Key Traits That Measure Sales Success

After 40 years of testing over 2,000,000 people Winslow Research Institute can isolate a personal profile that will identify a successful salesperson. The Personal Assessment measures 24 different areas of personal attitudes emotional reactions and mental capabilities and all of these areas are important and need to be evaluated. Areas of concern in these other traits may override the 7 key areas. So a total assessment is necessary to select a top not applicant however there are 7 key traits that we see time and time aging that produce a Star Sales employee.

These traits are

1) Sociability
2) Self-confidence
3) Composure
4) Tough-minded
5) Endurance
6) Ambition
7) Control

Sociability

Extroverted, outgoing, friendly, gregarious, neighborly, congenial. Warm hearted individuals who enjoy interacting and participating with others. They greet strangers openly, are quick to form friendships, and enjoy careers dealing with people rather than things. They are rarely content in solitary work. People that are highly rated in Sociability are happier people overall in life.

Self-confidence - #1 Reason for Sales Success -

Self-assured, certain, secure, brave, fulfilled, poised, self-reliant. Believe they have the knowledge and ability to be successful at whatever they attempt. Cope successfully with challenges and are not easily discouraged. Handle unexpected situations well, make decisions with assurance, and are quick to express ideas and opinions.

Composure

Calm, emotionally mature, tranquil, peaceful, serene, unperturbed, placid, composed. Can control their emotions and function effectively in stressful situations. Have the capability to maintain composure and deal with stress in a calm, objective manner. Rarely allow their feelings to negatively effect performance, and are not easily discouraged or frustrated by problems. Will not become upset over mistakes or misfortune.

Tough-minded

Resilient, realistic, unsentimental, tough-minded, durable, hard, possibly insensitive and callous. Can function normally in difficult and unpleasant situations. Not deterred by obstacles, disappointments or setbacks. Can accept strong criticism, do not become easily upset, and recover quickly when things go wrong. Do not need excessive praise or encouragement from others.

Endurance

Industrious, energetic, determined, vigorous, diligent, enduring, persevering. Willing to put forth the physical effort necessary to be successful. Will exert sustained effort and persistence to accomplish their tasks and goals. Unrelenting in work habits, will practice long and hard, and will not give up easily on problems.

Ambition

Competitive, aspiring, enthusiastic, enterprising, industrious, goal-oriented, eager, striving. Strong desire to reach higher levels of achievement and to respond positively to competitive situations. Aspire to accomplish difficult tasks and set and maintain high goals. Tend to approach most situations competitively

Control

Deliberate, calculating, analytical, designing, possibly indecisive and prone to procrastinate. Highly disciplined, maintain control over their behavior and do not act impulsively. It would be unusual for them to speak or act without considering the consequences. May be slow to act or hesitant to make decisions in some situations.

Employees that are stars in sales will measure an 8 out of 10 or higher in each of the areas above. Again it is necessary to evaluate all of the personality traits, if there are more then 5 concerns in the other 17 personal traits it may be a reason not to hire some one that excels 7 key areas. It is important to work with Winslow Research Institute until you have an understanding of the reports and how to measure Star applicants and employees

Trying Too Hard To Make The Sale When Cold Calling

Frequently when cold calling we make the assumption that if the prospect shows the slightest bit of interest in the product or service they will buy. We push hard to get the sale. This technique is a traditional sales method. We are often taught from the start to use this form.

If they person says "No" change it to a "Yes"; if they hang up you simply move to the next prospect. The numbers game of cold calling and is no longer needed to effectively cold call. With the new mind-set you will not have to feel stressed or bad for pushing the prospect for the sale...because the sale is not the main goal or objective in the new mind-set.

When you try too hard to make the sale you:

Create stress in the prospect and in you
Cause sales pressure in the call
Cause the prospect to put up their "defensive wall"
Send red-flags to the prospects

This tactic in cold calling is still used however there is a better way. The new mind-set will teach you that it is important to find out if they are a fit...before you try to incorporate your product or service into the conversation.

Remember that pushing the sale on the prospect should not be your main goal or objective. You should first find out if your product or service can help them with their current issues...and treat them like a person and not another sale.

Understanding that red-flags cause tension between you and your prospect and this type of pressure will only bring on negative tension. Positive responses are what you will need to achieve a strong and trust building connection to those you are contacting. This positive attitude will also give you and your company respect in the eyes of your prospects improving the future of your company.

Use of old techniques will bring stereo-typing and bad publicity for yourself and your company which will affect your success in a negative way. Once you have learned to re-program your mind to feel comfortable talking with the prospects and not pushing the sales you will see the difference in how your prospects are responding to your calls. You will also see a positive response to your voicemails-emails-and any other ways you contact your prospects. Remember that cold calling doesn't have to be painful or uncomfortable.