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.
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.