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March 17, 2009

The Year 2009 Brings Economic and Political Transition for All BBN Affiliates!

January 2009 BBN Training Conference was a great success. Twenty nine (29) BBN Affiliates attended the two day Training Conference. One point of focus was being prepared to talk and meet with business owners that respond to the mass mail program. A number of Affiliates stated that the information presented was exactly what they needed to learn and hear about.

Think about it: BBN Training Conferences Make BBN Affiliates Smarter Business Brokers

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April 7th & 8th Training Conference

“Listing and Marketing Businesses Today”

• Understand How to Execute the Standard Listing Agreement

• Prepare Professional Marketing Documents that Sell Businesses

• Develop & Implement A Marketing Plan for Different Businesses

• Qualify Potential Buyers Correctly and Avoid Wasted Time

• Introduction to the Offer to Purchase & Letter of Intent

Plan to Attend this Training Conference: Training Makes the Difference!

Think About the U.S Military Special Forces Such as the Green Beret, Navy Seals or Delta Force.

Training is the difference between success and failure!

*Attendance Certificate: Business Marketing Professional (BMP)

2009 Dates for BBN Affiliate Training Conferences

January 27th & 28th

April 7th & 8th

June 23rd & 24th

August 25th & 26th

October 27th & 28th

Note: All Training Conferences in 2009 are on Tuesdays and Wednesdays

Details at – Affiliate Members Area

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2009 New Advanced BBN Affiliate Training Conference in Dallas, Texas

This Advanced Training Conference is designed to provide appropriate training for experienced BBN Affiliates. The material discussed will also benefit BBN Affiliates working to attain the Certified Business Broker (CBB) designation.

The CBB designation is awarded by Business Brokers Network (BBN) to Affiliates that meet the certification criteria requirements listed on the Certified Business Broker (CBB) Application, BBN Form 111.

Affiliate Qualifications to Register and Attend Advanced BBN Training Conferences are as follows:

1. Attendance at any five (5) of the BBN Training Conferences presented in 2006, 2007, 2008 or 2009, and at least one BBN Training Conference each year.

2. Completed the data gathering process for at least 5 (five) RWS Business Valuations and delivered the completed RWS Business Valuation to the business owner.

3. Must List, Market, Sell and Close on at least one business following The BBN Proven Process to Market and Sell Businesses (BBN Form 285).

4. Must be in compliance with the BBN Affiliate Service Agreement and in good standing with BBN.

Advanced Training Conference registration fee and date will be announced soon. More information will follow.

The Good News: Benefits for BBN Affiliates

Affiliates benefit from following The BBN Proven Process to Market and Sell Businesses. Those Affiliates that follow the process increase, by about tenfold, the likelihood that they will sell the business, close the transaction and collect the brokerage commission.

Remember: Learning is a life-long process!

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The Current Economic & Financial Situation:

SBA Business Acquisition Loans

SBA Applauds Stimulus Bill, Planning Underway For Broadest, Quickest Small Business Impact*

The American Recovery and Reinvestment Act contains a package of loan enhancements to current SBA programs that will help unlock credit markets and begin economic recovery for the nation’s small business sector including:

• Fee Reductions

• Higher Guarantees

• New SBA Programs

• Secondary Market Incentives

The bill provides substantial new funding to SBA and makes changes to the agency’s lending and investment programs so that they can reach more small businesses that need help. This includes:

• Funding for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares, up to 90 percent for certain loans

• Funding for a new loan program to help small businesses meet existing debt payments

• Funding for expanding SBA’s Microloan program, enough to finance substantial new lending and technical assistance grants to micro lenders

• Funding for technology systems to streamline SBA’s lending and oversight processes

* Information from U.S Small Business Administration Dallas/Fort Worth, Texas Office for Meeting on Wednesday, March 11, 2009 in Dallas, Texas and

provided courtesy Jack Pilon at Centinel Financial Corporation in Plano, Texas.

The following articles offer abundant “food for thought” about unexpected and positive benefits during the economic downturns. I hope each of you read and learn about the past experiences of others.

Not Even The Rich Can Afford to be Stupid!

“Are we doomed forever to be the fleeced,” wonders Peter Applebome, “or is there a financial lesson here?”

Yes, 2008 was a miserable year. Had Time waited a few days it might have decided to go with Bernard L. Madoff, the ultimate face of this annus horribilis, as its Person of the Year instead of Barack Obama.

Maybe this year will be better. It can’t be much worse. But before we toss the latest unopened 401(k) statement into the trash, a ring-in-the-new-year toast to us all – the boobs and easy marks who from time immemorial have mastered the art of buying high and selling low, investing in bubbles as transparent as an open window, making crashes and swindles as much a part of the human experience as love, vanity and bad breath.

“In so far as there is a lesson in history,” said James Grant, editor of Grant’s Interest Rate Observer, “it’s that human beings are not very good with large sums of money, anything over $136.”

As we await a better 2009, we ask: Are we doomed forever to be the fleeced, or is there anything we can learn from this latest round of financial catastrophe? In fact, there are plenty of lessons to be learned. So here’s a revolutionary idea: Maybe it’s time we even start thinking about ways to teach them.

All financial collapses have their own brand of pain. But this one cuts particularly deep because over the past few decades, without even quite knowing it, we went from a nation with a few financial choices to one with thousands, and we’re making decisions previous generations never faced – in IRAs, 401(k)s, 529 plans and elsewhere. What’s the right asset allocation? Regular IRA or Roth? When is it best to retire and when to begin withdrawing funds from retirement plans? Tell me again how that annuity is supposed to work? What’s the catch in that cheap adjustable-rate mortgage?

Back in 1972, Money magazine was a revolutionary idea, a money magazine for people who didn’t have much of it. Now the marketplace is full of people and publications offering advice, much of it self-serving, some smart, some dumb. Were you lucky enough you might have happened upon David Lereah’s invaluable primer, Why the Real Estate Boom Will Not Bust – And How You Can Profit From It or Robert Zuccaro’s prescient book, Dow, 30,000 by 2008 – Why It’s Different This Time. There was plenty more where those came from.

Surely, there are different levels of financial ignorance and folly. People who took out loans they had no ability to pay based on the quaint notion that housing prices only went up didn’t make the same mistakes as Madoff’s investors, who had at least some reason to think they were doing something prudent and wise.

But can anyone doubt that the demands on people to make reasonably intelligent choices with their money has so far exceeded their wisdom to do it, that maybe we should at least try to figure out some way to close the gap? If many presumable sophisticated Madoff investors were ruined, what chance do the rest of us have?

Frederick E. Rowe Jr., a Dallas money manager, has a framed quote attributed to financier and investor Bernard Baruch near his desk. It reads: “If you are ready and able to give up everything else, to study the whole history and background of the market and all the principal companies whose stocks are on the board as carefully as a medical student studies anatomy, to glue your nose at the tape at the opening of every day of the year and never take it off til night. If you can do all that and in addition you have the cool nerves of a great gambler, the sixth sense of a kind of clairvoyant and the courage of a lion,” then you’ve got a chance.

That level of commitment may be a bit beyond most of us. But shouldn’t we be teaching more of this in high school and college? Shouldn’t every high school graduate at least know what compound interest can do for you as a saver and what it does to you as a borrower? Any college kid at some point gets lectures and required reading on the importance of diversity; academia’s favorite subject. Shouldn’t they graduate with a modicum of financial literacy as well?

“We’re taught that money is the root of all evil and that money can’t buy you love, but the nature of compound interest, that you have to have more money coming in than going out, is almost never taught,” Rowe said. “Students have to take math and foreign language and history, but you can graduate from every good school in the country without any exposure at all to how money works.”

One lesson of 2008 is that, these days, no one, even the most financially secure, can afford to be stupid. Another might be that investing for the long term can mean for a very, very long term.

It’s ugly out there. Better luck this year.

Source: The Dallas Morning News, January 4, 2009

Perhaps It’s Really A Recession That Is The Mother of Invention says Daniel Roth

In July 1993, Tom Siebel launched Siebel Systems, which made software for managing corporate sales staffs. The U.S. economy was faltering, and the market for his product was new and untested. In other words, the timing couldn’t have been better.

The tech veteran picked up some inexpensive, underworked software engineers, secured office space in run-down East Palo Alto, at 11 cents a square foot, and bought office equipment at auctions held by the companies failing around him. His own desk was a folding table. By the time he had his first release ready in 1995, he had spent less than $1 million on overhead and had an offering that none of the other major software companies could challenge. Investors made Siebel’s June 1996 IPO- debuting just as the stock market was picking up steam- one of the year’s top performers. Tom Siebel soon became one of the richest people in the U.S. “It was a great way to start a company,” he says.

With the world’s economies apparently snowballing into a deep recession, it feels uncomfortably Pollyannish to see signs of hope. But for the bravest inventors and entrepreneurs, conditions are ideal to pounce on a business opportunity. In periods of economic turmoil, people are hungry and work cheap, and entrenched companies often concentrate on in-house cost-cutting instead of exploring new markets, which can explode with the next turn of the business cycle.

When venture capitalists from Foundation Capital met with their nervous investors recently, the partners advised them to stay the course rather than follow their peers into the bunkers. “Our strongest companies have the potential to be whales when the market opens up,” partner Paul Holland told the group. “This is the crucible that forges great companies.”

The most memorable crucible in modern history is, of course, the Great Depression. During that era, several firms made huge bets that changed their fortunes and those of the country: Du Pont told one if its star scientists, Wallace Carothers, to set aside basic research and pursue potentially profitable innovation. What he came up with was nylon the first synthetic fabric, revolutionizing the way Americans parachuted, carpeted and panty-hosed. As IBM’s rivals cut R&D, founder Thomas Watson built a new research center, Douglas Aircraft debuted the DC-3, which within four years was carrying 90 percent of commercial airline passengers. A slew of competing inventors created television.

“The wonderful growth of the post-World War II period was due largely to the tremendous backlog of innovation developed in the late years of the Great Depression,” says Rick Szostak, an economics and technology historian at the University of Alberta.

This doesn’t mean that big new ideas emerge because of turmoil- in fact; the data shows no relationship between major breakthroughs and economic conditions. But the benefit of a global money drought is that competition tends to vaporize. And for some, the stress of tough times has an amazing way of concentrating the mind on the way forward. Bill Hewlett of HP committed to building the pocket calculator- at the time, a supposedly impossible task- during the 1969-70 recession; the 2001 dot-com-let-down-turn presented the perfect launching pad not just for risk-taking, fresh-thinking startups like discount airline JetBlue and blogging juggernaut Six Apart, but also for Apple’s iPod-dueled resurgence.

This recession (depression? you decide) will be no different. Many tech investments made in the past few years will pay off no matter what’s going on with the business cycle. That’s likely to mean game-changing innovation in clean tech and biotech- two of the biggest venture lures of late- with all the supporting and copycat companies that follow.

One person who thinks that now is the time to go all-in: Tom Siebel. He sold Siebel Systems to Oracle in 2005 and has since been working on personal projects. But a few months ago he started collecting resumes and locating office space in Silicon Valley for a new startup. It’s still under wraps, so he’s shy about the details. But he’s excited about the market conditions.

“It’s the same thing,” he says. “There are lots of really good people and space around, and all of the traditional who build companies are sitting this out because they think the market’s bad, and it’s going to get worse.” In other words, the timing couldn’t be better.

Source: The Dallas Morning News, January 4, 2009

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BBN’S Five-Star Featured Businesses for Sale Website

At this time sixteen (16) different businesses are listed on this website. Several of these businesses have contracts working. Five-Star Website listings include businesses form several states and BBN Affiliate brokers as follows:

• Nine (9) States

• Eleven (11) BBN Affiliate Business brokers

• Sixteen (16) Different Businesses

• Nine (9) Different Industries

The Five-Star Featured Businesses for Sale Website is an excellent marketing tool for all BBN Affiliates. Business owners are favorably impressed with the quality and type of businesses listed on this website.

I suggest that each BBN Affiliate practice using the businesses on this website as a major marketing and discussion tool when you talk to business owners about marketing and selling their business. Business owners are highly attracted to the idea of their business being displayed for sale on a website with only the best of the best businesses available for sale.

This process will assist BBN Affiliates to get better listings; not just larger businesses, but businesses that produce positive cash flow and will sell in today’s market. Additionally, business owners are far more agreeable to paying a non refundable retainer when they know their business will be marketed by a competent BBN Business Broker that is part of an established national organization with a sound business reputation for marketing and selling businesses.

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Updated: Sample RWS Business Valuation

In August 2008 the SBA issued revised guidelines for its lending. Two important economic changes impact the Sample RWS Business Valuation as follows:

• The loan repayment time period is increased from seven (7) years to ten (10) years; a 43% increase in repayment time. This is a timely and beneficial change with significant advantages to:

1. Business Buyers

2. Business Sellers

3. Business Acquisition Lenders

4. Business Brokers

• The current interest rate used in the new Sample RWS Business Valuation is 7%; not as high as the 9% interest rate used in the previous Sample RWS Business Valuation.

• Cash Flow Coverage on Page 4 of the RWS Business Valuation is larger for all businesses as a result of these two (2) changes.

Contact Don Smith at RWS Business Valuation Services to order your new Sample MVA Report. **

Don’s contact information is as follows:

Telephone: 1-972-680-3012 Email: don.smith@

** New MVA Report price is $75 each; plus $10 shipping and handling: total amount $85.

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Summary: Active Affiliate Status Information

To maintain Active Affiliation Status, Affiliates must be actively involved as a Business Broker and participate with BBN as outlined in detail in your Service Agreement.

Please make certain that you are complying with all terms of your BBN Service Agreement, including payment of Service Fees to BBN. BBN Form 501, Sold Business Fact Sheet, is to be completed and submitted to BBN with your payment of applicable service fees for each closed transaction. Service fees are due and payable immediately following close of the transaction.

Keep up your good work and contact us when you have questions or need assistance.

Regards,

Zack Tannery

Vice President, Affiliate Services

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