The best cold call you ever made!

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willywonka's picture
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Joined: 2011-06-07

An example of the dumb luck you can have cold calling. I was once calling in central NJ on a new issue preferred stock. I cold called a guy who had interest in the issue i was recommending, after some back and forth the guy said could he meet with me, I said sure and offered a time a week later as christmas eve was the next day. He said he didn't want to wait and could I see him tomorrow. I told him I would clear out my schedule and see him. The next day the guy comes in with his wife and asks me about the preferred.  I tell him about it. He says he wants $100,000 of the preferred. He then asks if we have money market funds. I say we do and tell him that it is earning 3.5% He tells me he wants to put some money in our MM fund. I open the account, client signs all the docs and then writes out a check to my firm for $ 1,750,000 of which $100,000 is going into a preferred which paid me a total commission of $2000. Not a bad cold call! This was the quickest best call I ever had. I have had cold call accounts that assetwise grew bigger than this client. ww

newguy44's picture
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Joined: 2008-08-29

So much of this business is timing. That is why it is vital to avoid excuses of why people won't do business and just dial. The next call could be someone with a $100k CD maturing tomorrow. Or they could be somone who just sold a business. One day I was making my last call of the day. It was one of those "one more dial" moments. I call the owner of a laundromat . It turns out he was looking to cash out. About two months before I began reading about succession planning and exit strategies, and had two weeks before had been to a conference on estate planning for small business owners.You would assume a guy with a business valued at several million dollars would have a guy he was working with. You would also assume he would have some sort of succession plan. You would think he would have done some estate planning. Nope, Nada, Zilch. Despite rolling in cash he didn't even have a retirement plan. He had everything in cash and some mutual funds.I learned that you can never assume people have someone they can count on, regardless of how successful they are. Number 2, leverage your firm. I couldn't do everything he needed, so I brought in some more experienced people in certain areas. Finally, dial the phone! Lightening can't strike unless you play outside in a thunderstorm. The second deal wasn't a cold call, but it was cool. I love classic cars, and one day I saw a 57 Chevy in a used car lot. I stop and look at it and he wants $3,500. It needs a lot of work, but I run to the bank, get the cash, and we make a deal. This is one of those little used car lots and you don't expect much. The owner asks me what I do and I tell him. We talk for a while, and he tells me to come back the next week. Turns out the guy owns land in Texas with mineral rights. He is a millionaire several times over. He just has the car lot to keep busy. It took a while to get him to do anything, but now he is a pretty big client over $1mm, and has given me at least a dozen referrals. Lesson- Tell people what you do when they ask. You never know. Was it luck? Yes, but if you put yourself out there good things will happen.

newregrep's picture
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Joined: 2010-03-22

New,if youre ccing with bonds how are you transitioning the conversation from bonds to business succession? Did the guy bite your bond bait?

newguy44's picture
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Joined: 2008-08-29

newregrep wrote:New,if youre ccing with bonds how are you transitioning the conversation from bonds to business succession? Did the guy bite your bond bait? He transitioned for me. I led with a bond, and he brought up the fact that he was thinking about selling his business. He asked if I knew how he would go about doing it. We talked for about 5 minutes and I told him I would like to visit with him face-to-face for 20 minutes. He did not buy a bond.  Keep in mind, this rarely happens on a cold call.Normally I transition into the succession planning after we have done some business. At that point I have earned some of their trust. I call every client at least once a month, and each time we talk I dig a little deeper. How long have you been in business? How have you handled the downturn? What concerns do you have? Do you have any partners? Here is how it might go: Keep in mind, these are folks who have at least invested a piece of money with me. This is not a cold call, this is a fourth or fifth conversation.John, this is ng44 from XXX. How is your business doing? SHUT UP. I wanted to ask you, have you ever thought about the day you'll get out of the business? SHUT UP. Most often they have not thought about it. John, the reason I ask is that the single biggest financial event in most of our lifetimes will be the sale or transfer of our business. Pause. In addition to helping my clients find great investments, I also help them with their succession plan. At some point in the near future we should grab a bite to eat or a cup of coffee and have conversation and evaluate where you are. SHUT UP. Let it sink in. John, there are three ways you can exit your business. First, you sell the business to another party. They either pay cash, or they purchase the business from you over time.  Second, you can transfer the business to a family member or some other trusted successor. Third, is a liquidation. This is the most painful, and usually occurs with a lack of planning. Unfortunately, this is what happens with most businesses. The good news is with some preparation we can make sure you get the most out of the business you have worked so hard to build. What does your calendar look like next week? Would you be available for lunch Tuesday, or would Thursday be better? Let them talk.This conersation takes about ten minutes at most. Sometimes they will ask questions, but often they don't want to talk about it because they fear it. When I follow up I let them know the only way to screw it up is inaction. If they have a partner I ask them: Is your wife prepared to be a partner in the business if God forbid something happens to you? I do not recommend diving into this until you have studied extensively and you feel comfortable sharing the process. There are a ton of complex issues you have to deal with.  Do not cold call on this until you have a strong book of business. The sales cycle is to slow to do this coming out of the gate.This is a conversation many advisors are not having with their clients. And, it opens the door to much more than a few transactional sales. Typically we will bring in their retirement accounts, their investment assets, we will do insurance for their buy-sell agreements, and we will be involved in the actual sale when that time comes.  

ZwingDing's picture
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Joined: 2010-09-15

newguy44 wrote:newregrep wrote:New,if youre ccing with bonds how are you transitioning the conversation from bonds to business succession? Did the guy bite your bond bait? He transitioned for me. I led with a bond, and he brought up the fact that he was thinking about selling his business. He asked if I knew how he would go about doing it. We talked for about 5 minutes and I told him I would like to visit with him face-to-face for 20 minutes. He did not buy a bond.  Keep in mind, this rarely happens on a cold call.Normally I transition into the succession planning after we have done some business. At that point I have earned some of their trust. I call every client at least once a month, and each time we talk I dig a little deeper. How long have you been in business? How have you handled the downturn? What concerns do you have? Do you have any partners? Here is how it might go: Keep in mind, these are folks who have at least invested a piece of money with me. This is not a cold call, this is a fourth or fifth conversation.John, this is ng44 from XXX. How is your business doing? SHUT UP. I wanted to ask you, have you ever thought about the day you'll get out of the business? SHUT UP. Most often they have not thought about it. John, the reason I ask is that the single biggest financial event in most of our lifetimes will be the sale or transfer of our business. Pause. In addition to helping my clients find great investments, I also help them with their succession plan. At some point in the near future we should grab a bite to eat or a cup of coffee and have conversation and evaluate where you are. SHUT UP. Let it sink in. John, there are three ways you can exit your business. First, you sell the business to another party. They either pay cash, or they purchase the business from you over time.  Second, you can transfer the business to a family member or some other trusted successor. Third, is a liquidation. This is the most painful, and usually occurs with a lack of planning. Unfortunately, this is what happens with most businesses. The good news is with some preparation we can make sure you get the most out of the business you have worked so hard to build. What does your calendar look like next week? Would you be available for lunch Tuesday, or would Thursday be better? Let them talk.This conersation takes about ten minutes at most. Sometimes they will ask questions, but often they don't want to talk about it because they fear it. When I follow up I let them know the only way to screw it up is inaction. If they have a partner I ask them: Is your wife prepared to be a partner in the business if God forbid something happens to you? I do not recommend diving into this until you have studied extensively and you feel comfortable sharing the process. There are a ton of complex issues you have to deal with.  Do not cold call on this until you have a strong book of business. The sales cycle is to slow to do this coming out of the gate.This is a conversation many advisors are not having with their clients. And, it opens the door to much more than a few transactional sales. Typically we will bring in their retirement accounts, their investment assets, we will do insurance for their buy-sell agreements, and we will be involved in the actual sale when that time comes.   Newguy can you suggest resources to study up on this? Also, have you considered adding two more ways an owner can exit the business: death and disability?Thanks.

newregrep's picture
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Joined: 2010-03-22

newguy thanks for the reply. I'm doing more or less the same but not in your league yet.  You have inspired me to call 400 numbers a day and I have been so far last week.  It's not walk in the park, but I really do believe 400 to be the magic number.

newguy44's picture
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Joined: 2008-08-29

Go to Amazon and search for business exit planning. You will come up with a ton of resources. Anything by Kevin Short and John Brown will get you started. There is also a JK Lassiter book that talks about estate planning for business owners. And yes, death, disability, and divorce are all part of the process. Newreg, keep dialing the phone and talking to people.

BondGuy's picture
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Joined: 2006-09-21

WW, good stuff!!!!!The magic of dailing the phone!!!!!!

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