Friday, July 17, 2009

Prime Example of Why Government is Not Our Friend!

This week I called to setup a liquor license transfer with the California Alcohol Beverage Control department. After spending 5 minutes navigating through their complex string of "for this push 1, for that push 2...and 10 layers later get a person" I got a person!

I asked for an appointmnet date. They said they could get us in at the end of August. I said, are you kidding me! She said they are very busy and backlogged right now. I said with what. Last time I checked people are closing restaurants and business and not transferring licenses. I added were there lay-offs at the ABC. She said there were no lay-offs. They have a project their working on for the next few weeks and their not allowed to take appointments.

CAN YOU BELIEVE IT! I told her does the ABC understand people are trying to make aliving out here and these kinds of delays kills deals. She could careless.

To give the inexperienced reader an idea of the issue this is, from the date of the appointment, it takes no less that 6 weeks and now probably 8 weeks to transfer a liquor license. Now with another 6 weeks added because they "can't take appointments" this means the earliest I can close this deal would be 4 months!

Again, another example of mindless bureacrats who could careless about business and people making a living.

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Thursday, July 2, 2009

Technology and Industry Changes - Broker to Buyer

Technology has always been a force in revolutionizing and creating industries. When automobile appeared on the earth, the carriage makers either accepted the new technology or died. When trains appear on the earth either the cargo hauling companies and passenger stage coaches changed or they died. When airplanes came on the earth either the passenger train companies changed or they died. When online travel agencies came on the earth either the travel agent changed or they died.

These are a few examples of how new technology forces change...forever. Is has been said, if the Pullman train car company would have thought of themselves as passenger carriers instead of train companies, we'd all be flying Pullman airlines.

But what happen to all those 10's of thousands of travel agencies that existed prior to the internet? What did we ever do it before the internet? The innovators in the travel industry created great companies such as Priceline and Travelocity based on a simple notion...impower the consumer. And that exactly what the internet has done to so many industries and people who fail to see it coming may as well get hit in the face by a Pullman train car!

So what does this have to do with commerical, residential, and business brokerage? Plenty! Just 15 years ago people who wanted to buy or sell a business had to somehow find a business broker - newspaper ads, phone book, and direct marketing - were the main sources of finding one. And then trying to find the right business or broker was a chore.

The internet removed a lot of the upfront work on finding a broker. But the brokerage business didn't change nor the mindset of the brokers didn't change. Many were theatened by this new technology. To them the internet was just another source of advertising instead of being a new technology leading to a revolution of the brokerage business. For the first time, buyers were impowered by the internet to find the properties they wanted. Soon, sellers realized they were impowered to use the same advertising channels the broker were using.

The brokerage industry is lagging behind technology. The model is changing right now, in front of us all. Instead of broker to broker business models, the brokerage industry is changing to a Broker to Buyer model and perhaps in time is could become a Seller to Buyer model. Yet we still see organizations like CABB (California Association of Business Brokers) and Commerical Multiple Listings Services focusing on the Broker to Broker model in order to compete.

Ultimately the consumer will be impowered to go direct to the seller. There will be a match making service bringing seller and buyer together. The "when" as to timing is sooner than later. So the broker who figures out how to add value to seller and buyer unions will be the big winner. The brokers who are stuck in the old world with broker to broker to buyer business model will go the way of Pullman Coach Cars.

Don't get me wrong, brokers certainly have value to add to every transaction with great strategies in the area of financing, protection, deal nurturing skills, and navigating the landscape of mines to get a deal done. But it has to be done in a world of Seller to Buyer business model.

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