By Ed Lisogar
Monday morning. "Now what?" So!
You’re actually serious about getting into the cash flow business!
Approached correctly, the financial rewards to being involved in the cash flow
industry are outstanding. But like anything, there’s a right way and a wrong
way. Just as a poor foundation will topple a high-rise, so too can starting out
on the wrong foot topple the dreams and goals you’ve set for yourself and for
the people that are important in your life.
Let’s look at some of the speed bumps and hurdles that will get in your way of
being successful.
Time - Many of you are working for yourselves for the first time
in your lives. Time will be your worst enemy. The things that make "being
the boss" so great can also ruin you. For too many of you this is your
typical day:
Get up, make some coffee, check the paper, click on Matt and Meredith on NBC,
cruise around the house in your sweats and tee shirt, wander by your desk, hmmm,
there’s the notes from the conversation you had yesterday with that note
seller ."I really need to get that on a worksheet and get that to Ed at
National Capital." You go back to the morning paper, you go back to
your desk, you shuffle some paper from this side to that side, there’s that
list of real estate agents you’ve been meaning to call and set up Monday
morning presentations with, back to the kitchen, more coffee, oh hey, Jay Lo is
on Oprah-can’t miss that, etc. etc.
You see, for some of you, that structured day working for someone else was
easier than you controlling your day. If you’re not careful, this
"meandering" attitude will take over and you’ll never get anything
accomplished. So what’s the answer?
Well, for starters, if we’re going to be in business let’s really be in
business. Just because your working at home doesn’t mean you don’t get ready
for work. Take a shower, get dressed, yes I said get dressed (not necessarily a
suit, but pants and a shirt) and go to work. Even if that means walking down the
hall to the spare bedroom that is now your office, go to work. You have to be
mentally in the game or your will get nothing accomplished. That might have been
okay when you were punching a time clock for someone else but it’s not okay
when everything (and more importantly, everybody) relies on your productivity.
Additionally, when you are at work, let the family (junior, spouse, Rover) know
that you are not to be disturbed unless the house is on fire. I can’t tell you
how many times we receive the following call: A broker, wanting to discuss a
potential deal. In the background I can hear everything Gilligan is saying on
the T.V. or the broker is continually telling the dog to be quiet...or there’s
a crying baby on the shoulder during the call It’s simply unprofessional.
Listen, I understand what’s going on in your life however a banker, owner of a
top real estate firm, lawyer, etc. could care less. In this industry, image is
everything. Use common business sense. Get yourself into the right frame
of mind, even though you are working from home. This leads nicely into the next
topic which is.
Mental Attitude - There are a lot of things that can trip you up
in this business, mentally and otherwise. I speak to a couple dozen cash flow
consultants a day-on the phone as well as by e-mail. Some are seasoned veterans,
some "newbies", many looking to get involved in this industry.
With few exceptions, we can always tell who’s been around the block a few
times, (and that doesn’t necessarily mean just in our industry). We’ll call
them Group A. They have a confident "air" about their
demeanor-confident without being arrogant. They know what it takes to be
successful in any business. They are respectful in the way they address you.
They display a genuine appreciation for those that have gone before them, blazed
the trails and opened new doors of opportunity that they now find themselves
standing on the threshold of. A genuine respect for those willing to share their
experiences and expertise in an effort to help them overcome the same obstacles
that we ourselves tripped over and stumbled on. They’re ready to listen. For
those individuals we have all the time in the world. They are today’s
entrepreneurs, tomorrow’s leaders and success stories in the cash flow
business. Then there is Group B. Unfortunately, every funding
source has endless Group B stories. Some you wouldn’t believe. Arrogant, know
it all, demanding and generally in too big of a hurry to do anyone any
good-including the client’s they are trying to serve. They’ll never get
anything done because they’re:
Arrogant: Submitting a transaction on an industry standard worksheet is
below them (even when we make it so easy by putting the worksheets "on
line" at our web site). A hand written note with little information
".should be all we need to give them a quote.", and they always want
it ".right now.".
Know it all: Suggestions and constructive criticism from an investor is
met with harsh response and in many cases personal attacks. They don’t realize
that they’re burning their bridges within the funding source community. We are
very happy to alert our associates in the industry about them.
Demanding: Worksheets come in missing all kinds of pertinent details.
Sometimes close to being blank (!) but faxed with endless documents. What that
tells your funding source is "I’m far too busy to fill out a
worksheet.here are the documents, you figure it out". And, oh yeah, these
are the ones that have to have a response within the hour.
In a hurry: So much so that they ignore red flags all over the place that
are screaming that this deal doesn’t have a chance of closing. We have one
consultant (In "the business" for about 5 years) that sends in a
business note about once a week. Despite our providing the basic underwriting
criteria for business notes to this party
over and over and over again on paper, by fax and via e-mail, this consultant
continues to send in worksheets that never come close to meeting even the most
basic underwriting criteria like down payment. We do not entertain business
notes with no money down but there’s yet another worksheet from that broker
with, hey here’s a surprise, no cash down from the buyer.
Now listen. No one understands better than I how tough it is to turn any
deal away, always wanting the funding source to confirm whether it’s
"doable" or not first. However, there are simply some requirements
that cannot-WILL NOT be waived. Example: In a business note, here are some iron
clad requirements, all of which are at our web site or in our criteria package
that every broker has access to: 1st position lien, good credit, business with
some tangible assets, open and profitable for at least 3-4 years, cash down
payment of at least 30%-35%, etc. So how many times do we have to explain that a
2nd position business note on a pool cleaning route with no money down that’s
been open only nine months with a Payor that had a BK last year and a seller
looking for PAR is not something we’d be interested in?
Yes, I know, it takes all of 20 seconds to write "Pass" and fax it
back but that’s not the point. How much time did you waste on it up to the
point of hitting "start" on your fax machine? We’re trying to
maximize your time here. Yours, and yes ours as well.
The #1 reason unsuccessful consultants and brokers continue to be
unsuccessful is they fail to recognize deals that will just waste everyone’s
time.
And here’s where it gets interesting: How you’re reacting to the
descriptions above of Groups A and B should be telling you which group you
presently belong to.
Sorry, don’t blame the messenger.
EL
Ed Lisogar is the President and CEO of National Capital Corpoation, a
mainstay of the cash flow industry since 1993. Ed is a best selling author,
national speaker, a three times nominee for Arizona Entrepreneur of the Year and
a major funding source in a variety of diverse cash flows nationwide. You can
review all company
buying criteria at nationalcapitalcorp.com and can reach Ed personally by e-mail
at ed@nationalcapitalcorp.com
