Tom Lenzini, Business Broker
Transworld Business Advisors
Tom Lenzini graduated from the University of Oklahoma with a Masters of Business Administration (MBA) and managed enormous budgets as a Lieutenant Colonel for the United States Army. Upon retirement from the military, Tom founded, managed, and sold several large businesses and conducted workshops for business owners. The Institute of Business Appraisers certified him to determine the value of businesses. For nine years, Tom has been a Certified Business Intermediary with the International Business Brokers Association. Tom is gaining credibility by writing a book about the eight capabilities of successful entrepreneurs. Recently, Tom moved from the Orlando office of Transworld Business Advisors (Transworld) to Daytona Beach Shores, Florida.
Transworld has specialized in the sale of businesses in the Florida market for 35 years and has 86 agents. Both buyers and sellers sign exclusive agreements that may have time-sensitive exclusions. However, nearly half of signed contracts do not close because of inaccurate records. On average business brokers close 20 percent of their client’s businesses, but Transworld closes a much higher percentage.
The Small Business Administration provides loans to a few buyers, but most are owner financed. Transactions for over a million usually involve a merger, acquisition, or private equity group (venture capitalists). Sometimes turnaround experts flip large businesses.
SWOT Analysis
Opportunities/Mission
The mission of Transworld is to assist those who seek to buy or sell a business. Specifically, Transworld guides them through the steps that properly structure the business sale. Its slogan is good people do good deals.
Threats/Target Market
The target market of Transworld is buyers and sellers of businesses who seek assistance with the complexities of the transaction. Tom’s key customers are practical, achievement-oriented business people who wish to live near Daytona Beach, Florida. Many buyers seek to fulfill the American dream of running a business. Sellers may face a life passage such as retirement, failing health, divorce, or a dispute with a business partner, but some are just ready to move on to a new business venture.
Strengths/Specialty
Transworld specializes in providing high-quality brokerage services. Its unique competitive advantage is its multiple listing service (MLS). Prospective buyers can search for a suitable business by location, subcategory, listing price, down payment, sales, earnings, or other important factors. Tom specializes in big deals.
Weaknesses/Suppliers
Transworld and its business brokers contract for direct marketing services, maintenance, and repetitive tasks. Transworld also relies on the expertise of attorneys, insurance experts, and accountants.
Marketing Mix Decisions
Products and Services
Business brokers makes deals happen for both buyers and sellers. When representing sellers, Tom writes an attractive business profile, sets the right price, prescreens buyers, negotiates terms, and expedites the transaction. He helps buyers achieve their life goals by evaluating their capabilities and resources and by guiding them to select the right business.
Distributors
Websites such as BizBuySell.com and many others drive prospective buyers and sellers to the website for Transworld. Buyers search for an appropriate business online, whereas sellers evaluate Transworld and check out its competitive online listings. About 30 percent of inquiries are from foreign buyers in Europe, Asia, and South America. Tom guides foreign buyers to obtain a visa, a necessity for purchasing a business.
Promotion
Business owners often retain the direct mail promotions sent by Transworld and its brokers until they are ready to buy or sell their business. Sellers exit from a business for many different reasons, whereas buyers seek to convert a hobby into a business, to be their own boss, or to progress to a larger business. Buyers and sellers select a business broker they trust will obtain the best value for them. Tom builds trust by speaking at no cost to associations, Rotary Clubs, and other business groups and by networking with groups of business people. Prospects often desire to go to the beach—to buy a business near Daytona Beach or to retire from a local business. In the initial meeting, Tom empathizes with their situation and explains how Transworld could assist them. Tom delights both buyers and sellers with his empathy, wisdom about the sales process, and business acumen.
Pricing
Sellers are willing to pay Transworld its commission because Transworld sells more businesses in Florida and usually sells them faster than competitors. Business Brokers of Florida trains, evaluates, and licenses business brokers. Business brokers earn commissions based on their annual production. Top brokers earn as much as 70 percent of the commission. Brokers pay commercial realtors 20 percent for referring a buyer to them but split commissions with licensed business brokers.
Taking Action
Prospecting
Both Transworld and Tom send confidential direct mail promotions to key prospects. The target market is local nonfranchise businesses. They know from experience the traits of their key customers and what copy that is most effective-a list of possible reasons for selling their business. Transworld offers to help them prepare for the eventual sale of their business. At no cost, Tom tells them how to increase the value of the business and expedite its sale at no cost until the transaction is closed.
Customer Service
Tom rewards key customers with extra services. He may notify prospects a buyer is interested in a business like theirs or may sell a large business by structuring a complicated deal. He does not deal with unreasonable buyers and sellers. For example, some buyers refuse to sign the confidentiality agreement or to disclose financial data, whereas some sellers demand an unreasonable price for their business, are dishonest, and have inaccurate books.
Budgeting
He concentrates his attention on his key customers and solicits more clients just like them.
Action Plan
Tom is implementing this strategic marketing plan to build up his reputation in the Daytona Beach area.
How can Tom be more efficient in screening potential sellers?