Friday, June 5, 2026

A interesting interview with the host of ValuationPodcast.com - A podcast about all things Business + Valuation Melissa Gragg

 


In today’s episode, I’m joined by David C. Barnett—an international speaker, author, consultant, and one of the most respected voices in the world of buying, selling, financing, and managing small and medium-sized businesses.

Together, we take a deep dive into what really happens in the lower middle market and Main Street business transactions. Most owners hear headlines about billion-dollar acquisitions, but the reality for the majority of business owners is very different. We break down how buyers actually think about value, why sellers often misjudge what their business is worth, and how emotional expectations, financing realities, and risk perception all collide during a deal.

We also explore why many businesses never sell, what drives real valuation multiples in this space, and how sellers can better prepare themselves for a successful and realistic exit. This conversation is a grounded, eye-opening look at the “real deal” behind business valuation and M&A.

Thursday, June 4, 2026

Live Government Contracts for Small Business: What Most Owners Miss with Melinda Colon



Can government contracts help you grow your business and increase its value? I’m happy to have Melinda join me on a live broadcast. Melinda helps business owners use government contracting as a strategic growth tool. Rather than chasing random opportunities, she helps companies identify the right contracts, build sustainable sales pipelines, and create long-term value. Tune in as we discuss how government procurement really works, the biggest mistakes business owners make when pursuing contracts, and why winning one contract should never be the goal. We’ll also explore how business buyers and owners can use government contracting to diversify revenue, reduce risk, and build a stronger, more valuable company. This is a ‘must see event’ for anyone interested in business growth, acquisitions, sales strategy, or government contracting. Find Melinda on Linkedin here: https://www.linkedin.com/in/melinda-colon/ https://melindacolon.com/


Monday, June 1, 2026

Is Intellectual Property Still Valuable? (What Business Buyers Need to Know)

 

How AI Is Changing the Value of Intellectual Property When Buying a Business

For years, business owners have argued that their companies are valuable because of the information, intellectual property, proprietary systems, and specialized knowledge they've developed.

And in some cases, that's absolutely true.

But something important is changing.

Information that once took years to collect, organize, and develop can sometimes be recreated in hours using modern technology and artificial intelligence.

That has major implications for anyone buying, selling, or valuing a small business.

If you're considering purchasing a company that claims much of its value comes from a proprietary curriculum, training program, operating manual, database, or collection of specialized information, you need to ask a very important question.

Are you buying something genuinely difficult to recreate, or are you paying for information that is no longer scarce?

I've spent years helping people understand the value of small businesses and the risks associated with acquisitions.

Today, I want to explain how the changing availability of information affects business valuation, why execution matters more than ever, and how to determine whether acquiring a business makes more sense than starting a competing company yourself.


When Information Was Scarce, It Could Be Extremely Valuable

There was a time when specialized information was genuinely difficult to obtain.

In fact, I still have books on my bookshelf that were never distributed through major publishers.

Some were simply photocopied at a local print shop, coil-bound, and sold through the mail.

If you wanted one, you had to discover that it existed, find out where to send a cheque, and wait for it to arrive.

Before information became widely available online, people often discovered specialized publications through advertisements in newsletters, magazines, or industry publications.

And sometimes the only way to learn certain techniques was to attend a conference or meet someone who already had the knowledge.

Some of those materials helped shape the understanding I later used when writing my book Invest Local, including concepts related to calculating returns on secondary-market note transactions.

The information was difficult to find.

That scarcity created value.

If a business had developed specialized knowledge that competitors couldn't easily access, that information could represent a meaningful competitive advantage.

But the economics of information have changed dramatically.

The Internet Reduced Information Scarcity. AI Is Accelerating the Change.

The internet was the first major disruption.

Suddenly, information that previously required weeks of searching could be discovered in minutes.

People gained access to instructional videos, templates, online communities, examples, research, and specialized explanations.

Knowledge became easier to locate and distribute.

Now artificial intelligence is accelerating that process.

You can ask an AI system to draft a lesson plan, organize a training program, create worksheets, develop project ideas, or outline an operating procedure.

You may still need an experienced person to review, test, and improve the output.

But the time and cost required to assemble the initial material can be dramatically lower.

This doesn't mean that all intellectual property is worthless.

It means that buyers must become much more careful about identifying which information still creates a meaningful competitive advantage.

Something that was difficult to reproduce twenty years ago might be relatively easy to recreate today.

And that changes what a rational buyer should be willing to pay for it.

The Children's Coding Camp Example: Is the Curriculum Really the Asset?

Imagine a business that operates summer coding camps for children.

Twenty years ago, developing a strong curriculum might have required an enormous amount of work.

The owner would need to determine which programming concepts children could understand, create age-appropriate lessons, develop engaging projects, prepare worksheets, and build instructor guides.

They would also need to test the material and determine what actually worked in a classroom.

That effort could create a valuable educational asset.

A buyer might reasonably view the curriculum as a significant part of what they were acquiring.

But consider the same business today.

An AI tool can help generate lesson plans, coding exercises, worksheets, and project ideas relatively quickly.

An experienced educator or programming instructor could then review the material and make necessary improvements.

The result might not immediately match a mature, thoroughly tested curriculum.

But the cost of producing a credible alternative could be much lower than it once was.

So if the seller claims that the curriculum represents a large portion of the company's value, you need to investigate that claim.

How difficult would it actually be to recreate the material?

How much would it cost?

How long would it take?

And would the new material be good enough to compete?

Those questions are now essential to evaluating information-based businesses.

The Difference Between Information and Execution

This brings us to one of the most important distinctions in business valuation.

Having information is not the same as having a functioning business.

I've met many people who believe they have a million-dollar business idea.

Sometimes they don't even want to explain the idea because they're afraid someone will steal it.

But ideas alone rarely create substantial business value.

What matters is whether you can execute the idea successfully.

That means finding customers, delivering products or services, managing employees, controlling expenses, and generating profits.

And ideally, the business should be able to do those things consistently without depending entirely on one person.

As I explained:

"execution is the hard part." —David C. Barnett

A curriculum is information.

A profitable coding camp is an operating business.

And the distinction between those two things can be enormous.

What Actually Makes a Coding Camp Business Valuable?

Let's return to the children's coding camp.

Suppose the business has been operating successfully for twenty years.

It has an established reputation in the community.

Parents recognize the brand.

Schools and community organizations refer families to the program.

The company has relationships with instructors and a reliable process for recruiting and training them.

It also has a registration system, a marketing process, and procedures for handling cancellations, refunds, behavioural issues, food allergies, and staffing problems.

These things matter.

The company knows how to attract customers and deliver a successful experience.

It has developed relationships that would take time to recreate.

And it has operational systems that have been tested in the real world.

Now imagine the seller argues that the company's main asset is its coding curriculum.

That may completely misunderstand where the real value resides.

The curriculum might be relatively easy to reproduce.

But the customer relationships, reputation, operating systems, and established distribution channels could be much more difficult to replicate.

The Real Question Buyers Should Ask

When evaluating this kind of company, ask yourself:

Is the value in the content, or is the value in the machine that delivers the content?

That question can help you distinguish between information that is easily copied and a business that has developed a meaningful competitive advantage.

Why Proprietary Information Doesn't Automatically Justify a Higher Purchase Price

Business sellers sometimes describe their assets using terms such as proprietary methods, unique systems, specialized training, exclusive knowledge, or intellectual property.

Those descriptions can sound impressive.

But they aren't substitutes for financial analysis.

A buyer needs to investigate whether the claimed intellectual property actually provides an advantage.

For example, could a competent person recreate most of the material using readily available tools?

Does the business have legal protections, such as enforceable intellectual property rights, that meaningfully restrict competitors?

Does the information produce measurable customer benefits?

And is the advantage durable?

These are different questions from simply asking how much the seller spent developing the material.

Historical development costs don't necessarily determine present economic value.

A seller may have invested thousands of hours creating a training program.

But if a competitor can now produce a comparable alternative for a fraction of the cost, that changes the economic value of the original material.

The effort involved in creating an asset isn't the same as the benefit it provides to a buyer today.

When Intellectual Property Claims Become Especially Dangerous

The risk becomes particularly significant when a business isn't generating strong cash flow.

Imagine a company that has stopped operating because the owner became ill.

Perhaps it has valuable-looking manuals, training materials, course content, or a proprietary operating system.

The seller argues that these assets justify a substantial purchase price.

But the company has no current earnings.

There may be no active customers.

And its operational capabilities may have deteriorated.

In that situation, the buyer needs to be especially careful.

The Backhoe and Dump Truck Comparison

Years ago, I used an example involving a foundation contractor.

Imagine purchasing a backhoe and a dump truck.

You now have some of the equipment necessary to operate a foundation business.

But you don't have customers, revenue, or earnings.

You essentially have a pre-revenue foundation company.

The equipment has value because it could be sold or used.

But you shouldn't automatically value the operation as though it were a profitable going concern.

The same principle applies to information-based businesses.

Owning a collection of training materials doesn't automatically mean you own a functioning, profitable training company.

You need to distinguish between the value of individual assets and the value of an operating business.

Why Existing Customers May Be Worth More Than the Information

One of the most important advantages of acquiring an established business is access to an existing customer base.

Suppose the coding camp has operated in the same community for twenty years.

It has developed a mailing list of parents who have enrolled their children in previous programs.

Each year, the company can contact those families and encourage them to register again.

It may also receive referrals from satisfied customers.

That customer access can be valuable.

A startup would need to build those relationships from scratch.

But even this asset requires careful investigation.

Customer Lists Can Lose Value Over Time

Imagine the coding camp stopped operating for two summers.

The owner became ill and couldn't run the program.

The mailing list still exists.

But some of the children represented by that list may now be too old to attend.

Other families may have moved away or developed relationships with competing programs.

And because the business wasn't operating, it may have missed opportunities to attract new families.

The customer database could be significantly less useful than it was before operations stopped.

So buyers need to examine not only whether customer information exists but also whether that information remains commercially valuable.

A database isn't automatically a customer relationship.

And a historical customer relationship isn't automatically future revenue.

The Assets That May Still Justify Buying an Existing Business

When evaluating a company whose value supposedly depends on information or intellectual property, I encourage buyers to look for assets that are genuinely difficult to recreate.

These can include:

  • Existing customers: Relationships that would require significant time and marketing investment to develop independently.

  • Demonstrated cash flow: Historical evidence that the business can generate profits.

  • Brand recognition: A reputation that influences customer purchasing decisions.

  • Trained employees: People who understand the company's operations and can deliver its products or services.

  • Established locations: Premises that provide a meaningful operational or competitive advantage.

  • Licences and approvals: Permissions or regulatory authorizations that may be difficult to obtain.

  • Vendor relationships: Supplier arrangements that provide favorable pricing, access, or reliability.

  • Proven sales channels: Marketing and distribution systems that consistently generate customers.

  • Operational systems: Documented processes that employees actually use to produce results.

  • Transferable know-how: Specialized knowledge that can realistically be transferred to a new owner.

These assets can create value because they provide advantages that a new competitor may struggle to reproduce.

The key is determining which advantages actually exist and how much they're worth.

The Importance of Location and Community Relationships

Let's revisit the coding camp example one more time.

Imagine the company operates in a church hall directly across the street from an elementary school.

Parents can easily arrange for their children to attend after-school programs.

The location is affordable.

The organization has a long-standing relationship with the facility.

And there may be very few comparable spaces available nearby.

That location could be a significant advantage.

A competing startup might be able to develop a similar curriculum in a matter of days or weeks.

But securing a similarly convenient facility at a reasonable cost could be much more difficult.

That's an example of an asset that may create genuine economic value.

Of course, the buyer would still need to verify whether the location agreement can continue after the acquisition.

But the principle remains.

Sometimes the value of a business lies in practical advantages that have little to do with its intellectual property.

Buying a Business Versus Starting a Competitor

This leads to a comparison I believe every business buyer should consider.

Would it make more sense to buy the existing business or start a competing company?

I discuss this in my 2014 book Buying Versus Starting a Small Business.

A business acquisition can provide substantial advantages.

You may receive existing customers, trained employees, operating systems, established supplier relationships, and proven cash flow.

Building those advantages independently could take years.

And a startup might experience significant losses before reaching profitability.

In those circumstances, buying the existing business may be the better decision.

But what happens when the seller wants a very high price for a company whose main asset is easily recreated information?

The comparison changes.

If you can create a comparable product, develop the necessary systems, and enter the market for substantially less money, starting a competing business may be more attractive.

Compare the Real Cost of Both Options

When evaluating the alternatives, consider:

Acquisition considerationStartup consideration
Purchase price and transaction expensesStartup investment and development costs
Existing cash flowExpected losses before profitability
Established customersCost and time required to attract customers
Existing employees and systemsRecruiting and system-development expenses
Acquisition financing and debt serviceStartup financing and capital requirements
Existing reputation and market positionTime required to establish credibility
Inherited liabilities and operating problemsRisks of launching an unproven business

The right answer depends on the specific circumstances.

Sometimes the established business provides advantages that would be extremely expensive to recreate.

Other times, the seller's asking price is so high that a startup becomes a more reasonable alternative.

Even if you ultimately decide to buy the company, understanding the startup alternative can help establish a sensible maximum purchase price.

Why AI May Change the Value of Some Franchise Systems

This issue also applies to franchises.

A franchise can provide valuable advantages.

These may include brand recognition, established customer demand, supplier relationships, operating systems, and ongoing support.

But not every franchise offers the same benefits.

Suppose a franchise primarily provides an operating manual, a logo, and some basic training.

If the underlying business concept and procedures can be recreated relatively easily, you need to ask what justifies the franchise fees and ongoing royalties.

The existence of a manual doesn't necessarily create a durable competitive advantage.

The Plant-Based Restaurant Example

I've spoken with people interested in restaurant franchises built around specialized food concepts, including plant-based dining.

The argument is sometimes that demand for vegetarian food will continue increasing.

That may be true.

But consider what happens if vegetarian dining becomes much more popular.

Existing restaurants can add vegetarian options to their menus.

They don't necessarily need to adopt an entirely new franchise concept.

In fact, many restaurants already offer menu items designed for vegetarian customers.

So the question isn't simply whether the market for vegetarian food will grow.

It's whether the franchise possesses advantages that competitors cannot easily reproduce.

Does it have a powerful brand?

Does it have superior operations?

Does it offer meaningful purchasing advantages?

Does it attract customers more efficiently?

Those are the questions that matter.

A Franchise Manual Isn't the Same as a Competitive Advantage

Some food suppliers already provide restaurants with operating guides, business plans, recipes, and other support materials.

If you want to open a particular style of restaurant, you may be able to obtain much of the basic information from suppliers and other accessible sources.

AI may make developing those materials even easier.

That doesn't mean a franchise has no value.

It means buyers need to separate the easily reproduced information from the assets that genuinely improve the economics of operating the business.

A strong franchise may provide customer recognition, proven systems, purchasing power, and ongoing operational support.

A weak franchise may provide little more than information that is already widely available.

Those two propositions shouldn't be valued the same way.

What About Businesses Built Around Personal Expertise?

There's another important complication.

Some businesses derive much of their value from the knowledge and experience of a particular individual.

My own consulting business is an example.

I provide educational materials about buying, selling, financing, and managing small businesses.

I also work directly with clients who need help evaluating real transactions.

Someone could purchase the rights to my Business Buyer Advantage training materials.

But owning those materials wouldn't automatically give them the ability to deliver the same consulting services.

My consulting work draws on years of experience dealing with business owners, buyers, sellers, lenders, and transaction problems.

That expertise is difficult to transfer.

As I explained:

"Really, the true IP in my business is in here." —David C. Barnett

I was referring to the knowledge and experience I've developed personally.

A buyer acquiring an expertise-driven business needs to understand how much of that value depends on the seller remaining involved.

If the seller leaves, can the business continue delivering the same results?

Or does the company's value depend on knowledge that isn't easily transferred?

This is a critical consideration when evaluating consulting firms, professional services businesses, and other knowledge-intensive companies.

Why Training and Experience Still Matter in the Age of AI

AI can help people access and organize information.

But it doesn't automatically give them practical judgment or experience.

There's a difference between reading about business acquisitions and knowing how to evaluate a real transaction.

For example, someone who completes my Business Buyer Advantage training becomes familiar with concepts such as cash flow, goodwill, valuation, due diligence, and deal structure.

When that person later books a consulting session with me, we can often move through their questions much more efficiently.

They already understand the terminology and fundamental concepts.

We can spend our time examining the specific issues affecting their transaction.

Without that foundation, I may need to spend substantial time explaining the basics before we can investigate the actual problem.

That's one reason structured education and experienced guidance can still create value.

The value isn't necessarily in exclusive access to information.

It can be in how effectively that information is organized, taught, understood, and applied.

How Buyers Should Evaluate Intellectual Property in Due Diligence

If you're considering purchasing a business with significant information-based assets, I recommend investigating several areas.

Due diligence areaKey question
ReproducibilityHow easily could a competent competitor recreate the information?
Development costWhat would it cost to produce a comparable alternative today?
Legal protectionWhat rights does the business actually own or control?
Customer relationshipsDoes the business have active customers who are likely to remain?
Revenue and profitabilityDoes the information contribute to demonstrated earnings?
Operational systemsCan the business consistently deliver its product or service?
Employee capabilitiesDoes the team have the expertise needed to operate independently?
Seller dependenceHow much important knowledge exists only in the owner's head?
Competitive advantageWhat prevents competitors from offering a similar product?
Startup alternativeCould you build a comparable business for less than the acquisition price?

The objective isn't to dismiss intellectual property.

It's to understand its actual economic contribution.

Some intellectual property remains extremely valuable because it is protected, difficult to reproduce, commercially useful, or integrated into a successful operating system.

Other information may have lost much of its scarcity value.

Buyers need to distinguish between the two.

The Changing Value of Information Should Affect Your Acquisition Strategy

The availability of AI-generated information creates both opportunities and risks.

For buyers, it may reduce the cost of starting certain types of businesses.

It can make it easier to develop training materials, organize procedures, create content, and build initial operating systems.

But it can also reduce the competitive advantage of businesses that previously relied on information scarcity.

That means buyers should be especially skeptical when sellers emphasize the historical effort involved in developing proprietary materials.

The important question is what advantage those materials provide today.

As I explained:

"the value in any business acquisition is on what advantage it gives the buyer today." —David C. Barnett

That principle applies whether you're evaluating a training company, consulting practice, franchise, educational business, or another information-based enterprise.

You're not purchasing the seller's past effort.

You're purchasing the future economic benefits of owning the business.

And those benefits must be evaluated in today's competitive environment.

Final Thoughts: Buy the Business, Not Just the Information

Information has become easier to find, assemble, and reproduce.

And artificial intelligence is accelerating that trend.

But successful businesses still require much more than information.

They need customers.

They need capable employees.

They need reliable systems.

They need strong relationships, effective marketing, and the ability to deliver products or services profitably.

Those things can be much harder to recreate than a collection of manuals, lesson plans, or training materials.

That's why I encourage buyers to focus on the operational advantages a business provides.

Does the company have a loyal customer base?

Does it generate transferable cash flow?

Does it have systems that work?

Does it possess relationships, locations, or capabilities that would take significant time and money to reproduce?

And can the business continue delivering those benefits after the seller leaves?

As I explained:

"Are you buying a machine that produces results? Or are you just buying something that can be easily recreated?" —David C. Barnett

That's the distinction.

The value of a business isn't determined by how difficult its information was to create in the past. It's determined by the competitive and economic advantages that business provides today.

Before paying a premium for intellectual property, make sure you understand what you're actually acquiring.

And always compare the acquisition opportunity with the cost and risk of building a competing business yourself.

Sometimes buying is the better option.

Sometimes starting from scratch makes more sense.

The important thing is making that decision based on real economic value rather than outdated assumptions about information scarcity.

Learn How to Evaluate Business Value Before You Buy

If you're considering buying an existing business, my Business Buyer Advantage program teaches you how to analyze cash flow, evaluate goodwill, understand business valuation, conduct due diligence, and identify acquisition risks.

The goal is to help you understand what you're actually buying and whether the proposed transaction makes financial sense.

Explore Business Buyer Advantage

If you want to understand how business value is affected by assets, earnings, goodwill, and other factors, explore my book Business and Asset Values: How Owners, Buyers, Sellers, Lenders, and Advisors Should Think About Small Business & Equipment Value.

Explore Business and Asset Values

If you're comparing buying an existing business with launching a startup, my Cash Flow Forecasting and Business Plan Writing Program can help you model the financial implications of both approaches.

Explore Business Plan School

👉 Want deeper dives like this? Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.

Saturday, May 30, 2026

Why Seller Financing Notes Need an Offset Clause

 Seller financing is one of the most powerful tools in a business acquisition—but without the right protections, it can expose buyers to serious risk.

That’s where the offset clause becomes critical. https://youtu.be/WtA97RZ7OnQ 



What Is an Offset Clause?

In a seller financing arrangement, part of the purchase price is paid over time through a seller note.

An offset clause gives the buyer protection if:

  • The seller materially misrepresented the business

  • Hidden liabilities appear after closing

  • Assets were not properly disclosed

  • Financial information turns out to be false

If a major issue is discovered, the buyer can reduce or stop payments owed under the seller note to compensate for the damage.

Why the Seller Note Must Be Significant

Small seller notes don’t create much protection.

If the seller only finances 5–10% of the purchase price, they may simply walk away from the remaining balance if problems arise.

Larger seller notes—often 30–40%—create accountability.

This encourages sellers to:

  • Be transparent during negotiations

  • Provide accurate information

  • Choose qualified buyers

  • Support buyer success after closing

Aligning Buyer and Seller Interests

A properly structured seller note changes the relationship between buyer and seller.

Instead of an adversarial transaction, both parties now share a common goal:

  • The buyer wants the business to succeed

  • The seller wants to get paid in full

This alignment often leads to better cooperation, smoother transitions, and more realistic negotiations.

What Counts as Material Misrepresentation?

Not every mistake triggers an offset clause.

Material misrepresentation refers to serious issues that significantly impact the business, such as:

  • Undisclosed debts or leases

  • False revenue claims

  • Hidden liabilities

  • Fabricated cash sales

Minor accounting disagreements usually don’t qualify.

Why Due Diligence Still Matters

Even with an offset clause, buyers must perform proper due diligence.

Smart buyers verify information using:

  • Bank statements

  • Supplier records

  • Tax filings

  • Third-party documentation

The goal is to reduce reliance on “trust me” explanations.

The Real Value of the Offset Clause

Interestingly, offset clauses often prevent disputes rather than create them.

When sellers know they remain financially exposed after closing, they are more likely to:

  • Disclose information honestly

  • Avoid exaggerating performance

  • Work collaboratively with buyers

That protection creates stronger, safer transactions for everyone involved.

If you want to learn more about creative private investments, check out my book Invest Local — available on Amazon or as a PDF from DCBBooklist.com

Key Takeaways

A seller financing note with a strong offset clause protects buyers from major undisclosed risks while encouraging transparency from sellers. The larger the seller note, the more aligned both parties become in ensuring the business succeeds after closing.

👉 Want deeper dives like this? Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.


Friday, May 29, 2026

A great Interview with the host of Systems Simplified Podcast Adi Kelvit

 


Introduction of the Guest: David Barnett is a business consultant, author, speaker, and transaction advisor who has spent more than 20 years helping entrepreneurs buy, sell, finance, and grow small and medium-sized businesses. He is the author of multiple books on business transactions and investing, and the host of a popular YouTube channel focused on entrepreneurship and business ownership. Through his advisory work, David brings both the buyer’s and seller’s perspectives to the conversation, helping business owners better understand what truly drives business value.

Thursday, May 28, 2026

Premiere Do interest rates, recessions, and economic headlines really matter when buying or selling a small business? Mike Finger

 


New guest – Mike Finger from ExitOasis.com

I’m happy to have Mike join me for an important discussion about the difference between economic headlines and the real-world realities of small business dealmaking.

Tune in as we discuss interest rates, private equity, AI, demographic shifts, and whether these big macro trends actually impact the average small business owner looking to buy or sell a business.

We’ll also explore what really makes a business sellable and why good businesses continue to attract buyers regardless of what’s happening in the broader economy.

This is a ‘must see event’ for anyone interested in buying, selling, financing, or managing a small business.

Be sure to join live so that you can ask questions, replay will be available.

Set yourself a reminder on YouTube here: https://youtu.be/8Nl_AEZnIt8 

It will be going live Thursday May 28, 2026 at 2:30 PM Atlantic Time and 1:30 PM Eastern Time

See you there!

David C Barnett


Monday, May 25, 2026

“Shake the Tree” A Simple Sales Strategy That Actually Works

 

How to Generate More Sales on LinkedIn Without Cold Pitching: The Shake the Tree Strategy

What do you do when sales start slowing down?

Maybe your phone isn't ringing as often as it used to. Perhaps fewer prospects are reaching out, or your usual sources of referrals have become quiet.

Most business owners immediately start thinking about advertising, lead generation, or finding new customers.

But sometimes the opportunity isn't in finding more strangers.

It's in reconnecting with people who already know you.

There's a sales strategy I learned years ago called Shake the Tree. It's a simple way to restart conversations, remind people what you do, and create opportunities without aggressively pitching your services.

I recently used this approach on LinkedIn while promoting a local educational event.

I contacted approximately 80 to 90 existing connections. Very few registered for the event, but the outreach generated two paid consulting calls, two warm referrals, and additional conversations about business valuation services.

The results were a useful reminder of something I've learned throughout my career in sales.

Sometimes people don't need to be convinced that you're the right person to help them.

They simply need to remember that you exist.


What Is the Shake the Tree Sales Strategy?

Shake the Tree is a relationship-based sales approach built around reconnecting with people in your existing professional network.

Instead of contacting someone with a direct sales pitch, you create a legitimate reason to reach out.

That might be an educational workshop, a community event, a charitable initiative, or another activity that could interest people in your network.

Then you contact relevant connections and ask whether they know anyone who might benefit.

You're not demanding a meeting.

You're not trying to close a sale.

You're simply opening a conversation.

And sometimes that conversation leads to opportunities completely unrelated to the original reason for contacting them.

The idea is to gently remind people who you are, what you do, and how you might be able to help.

How I Learned the Importance of Staying Connected

I've been involved in sales for most of my life.

When I was fourteen years old, I sold ice cream from one of those three-wheeled Dickie Dee bicycles in Canada.

I'd ride through neighbourhoods, ringing the bells and selling ice cream to children.

Later, I worked in Yellow Pages advertising, American Express, business brokerage, and consulting.

Throughout those different roles, I've met thousands of business people.

And one lesson has remained consistent.

Relationships can create opportunities long after the original conversation has ended.

Someone you met five years ago might suddenly need your services.

A former customer might know someone who could benefit from your expertise.

An industry contact might hear about a business owner preparing to sell.

But if those people haven't heard from you in years, they may not immediately think of you.

That's why maintaining professional relationships matters.

And Shake the Tree gives you a practical way to do it.

The Coworking Space That Inspired My Latest Sales Experiment

I work from home.

I have an office in my house, which is convenient, but it can sometimes feel a little lonely.

A few months ago, I visited a new coworking space in town.

The people running it had created an atmosphere I really liked.

There was good music, an inviting environment, and an effort to bring together interesting local professionals.

After touring the space, I decided to become a member.

Now I visit a couple of times a week to work in a different environment and spend time around other business people.

My membership also includes a few hours of conference room access each month.

That got me thinking about how I could contribute something useful to the community.

Most of my work involves helping people buy, sell, finance, and manage small businesses.

But not everyone at a coworking centre is interested in buying or selling a company.

I wanted to offer something that would appeal to a broader group.

Then I remembered that I've written ten books.

Why not organize a session about how writing a book can help grow a business?

That became my event.

And it also gave me the perfect reason to Shake the Tree.

Step 1: Find a Genuine Reason to Contact People

The first part of the strategy is creating a reason to reach out that isn't overly promotional.

In my case, it was an educational session about using a book to help grow a business.

But the same approach could work with many other activities.

You might organize a workshop, participate in a charitable fundraiser, sponsor a local event, or share an opportunity that could benefit people in your professional network.

The important thing is that the reason for contacting them is genuine.

You should be offering something useful rather than disguising a sales pitch.

For my event, I went to LinkedIn and filtered my connections by people in my local city.

Over the years, I've built hundreds of connections with business owners and professionals in the community.

I reviewed those contacts and identified people who might be interested in the event or know someone who would benefit.

Then I sent a simple message.

"I wanted to reach out to you because I'm doing a session on how to write a book to help your business grow. I thought of you and wondered if you might know anyone who is interested." —David C. Barnett

Notice what I wasn't doing.

I wasn't asking them to purchase consulting services.

I wasn't pitching a course.

I wasn't even directly asking them to register.

I was asking whether they knew someone who might be interested.

That small distinction makes a big difference.

Why Asking for Referrals Can Work Better Than Direct Selling

Think about the last time someone sent you a LinkedIn connection request and immediately followed it with a sales pitch.

It probably wasn't a particularly enjoyable experience.

You may have accepted the connection because you thought there was a legitimate professional reason to connect.

Then suddenly, you're receiving messages about a product or service you never asked about.

That approach can make people uncomfortable.

Shake the Tree works differently.

Instead of asking someone to buy, you're asking whether they know someone who might benefit.

That gives them an opportunity to help.

And it doesn't require them to make an immediate purchasing decision.

If they're interested personally, they can tell you.

If they know someone else, they can make an introduction.

If they don't know anyone, that's fine too.

The interaction can remain friendly and professional.

The goal is to create conversations, not force transactions.

Step 2: Reach Out to People Who Already Know You

For this particular campaign, I didn't send connection requests to strangers.

I contacted people who were already first-degree LinkedIn connections.

These were people who had connected with me at some point during my professional career.

That existing relationship mattered.

It meant the message wasn't coming from someone completely unfamiliar.

I also didn't send the message indiscriminately.

I reviewed profiles and considered whether the person might have some connection to the event.

Business owners, consultants, coaches, and other professionals were generally good candidates.

Someone working in a role with little connection to the topic might not be.

Sometimes I copied and pasted the basic message.

Other times, I modified it to make the outreach more personal.

In total, I contacted approximately 80 to 90 people.

It took some time.

But the results made the effort worthwhile.

Step 3: Look Beyond Event Registrations to Measure Success

Here's what happened.

Very few people signed up for the book-writing session.

If I had measured success only by registrations, the outreach might have looked disappointing.

But something else was happening.

People were responding to my messages and remembering what I do professionally.

One person explained that they'd recently spoken with someone interested in selling a business.

They knew I helped people buy and sell businesses, but I hadn't come to mind during that earlier conversation.

My message reminded them.

And now they wanted to make an introduction.

I ended up receiving two warm referrals.

I also generated two paid consulting calls and conversations about most probable selling price evaluations for two other businesses.

The paid consulting calls brought in more money than the registrations for the educational session.

And the outreach created additional opportunities that might lead to future business.

As I explained:

"I literally got two warm referrals from people who could use my services, uh, because I reminded people that I exist." —David C. Barnett

That was the real success of the campaign.

I gave almost a hundred people a gentle reminder of who I am and what I do.

And some of them had opportunities that were already waiting to be connected with me.

Why Your LinkedIn Profile Matters During Outreach

There's another important detail.

When someone receives a message from you, they may click on your LinkedIn profile.

Perhaps they haven't spoken with you in years.

They may not remember exactly what you do.

But your profile gives them a quick reminder.

In my case, people can see that I help clients buy and sell businesses through coaching, consulting, and advisory services.

They can also review the content I've published.

That reinforces my area of expertise.

Even if the person isn't interested in the original event, they may remember that I'm someone they can contact when a business acquisition or sale becomes relevant.

This is why your LinkedIn profile should clearly communicate what you do and whom you help.

Your outreach opens the door.

Your professional reputation helps people understand why they might want to keep that door open.

Step 4: Build Your Professional Network Consistently

The second major part of the Shake the Tree strategy is developing a strong network before you need it.

I've been doing this for years.

When I worked at Yellow Pages, I would meet business owners during sales appointments.

After returning to the office, I'd send them LinkedIn connection requests.

When I worked at American Express, I'd connect with people I met professionally.

During my business brokerage career, I connected with buyers, sellers, and other industry participants.

It became a habit.

Whenever I met someone through business, I'd look for an opportunity to remain connected.

Over time, those relationships accumulated.

And today, that network gives me opportunities to reconnect with people through strategies like Shake the Tree.

Make LinkedIn Connections Part of Your Routine

You don't need to wait until you're struggling to find customers.

After attending a conference, meeting a potential customer, or participating in a professional event, consider sending relevant connection requests.

A short message explaining where you met can be enough.

You aren't necessarily trying to sell anything.

You're simply maintaining a professional relationship.

And years later, that relationship could become valuable.

How Conferences Can Help You Grow Your Network

I recently attended the Business Transitions Forum in Halifax.

The conference included panel discussions featuring professionals involved in business acquisitions and transitions.

The event program listed the names and photographs of panelists.

After returning home, I reviewed the program and sent connection requests to people who had participated.

I explained that I'd attended the conference and thanked them for sharing their experience.

I didn't pretend that I'd attended every breakout session or personally met every panelist.

I simply used our participation in the same professional event as a legitimate reason to connect.

That context makes a difference.

The recipient can see that you're involved in the same industry.

You're a real person participating in relevant professional activities.

And you're not immediately trying to sell them something.

Those small interactions can help build a stronger network over time.

Step 5: Become Known for One Area of Expertise

This is the third part of the strategy.

And I believe it's the most important.

Stay in a recognizable area of business long enough to build a reputation.

Over the years, I've met many business owners in their sixties and seventies.

Sometimes I'll ask about their marketing strategy.

They'll laugh and tell me their strategy is simply answering the phone.

That might sound ridiculous to someone just starting a business.

But think about what it really means.

They've spent decades serving customers in the same industry.

People know who they are.

They know what services they provide.

And when someone needs those services, their name comes to mind.

They've built professional momentum.

Why Long-Term Recognition Makes Sales Easier

I've spent years helping people buy, sell, finance, and manage businesses.

I began finance consulting in 2008, which eventually led to business brokerage.

Over time, my work expanded into consulting, writing, education, and online content.

But the general subject matter remained consistent.

I want people to think of David Barnett when they think about buying or selling a small business.

That's why I publish YouTube videos, podcasts, blog articles, books, and LinkedIn posts.

I'm continually reinforcing that association.

As I explained:

"the longer that I'm in this space, the more the momentum I've created in the minds of people benefits me and my business." —David C. Barnett

The longer you consistently operate within a recognizable area of expertise, the more opportunities you may create through your reputation.

How Content Marketing Supports Your Sales Strategy

Content marketing plays an important role in this process.

When you publish useful information, you're demonstrating your knowledge to people who may eventually need your services.

Someone might watch my YouTube videos about business acquisitions for months.

They may read articles about valuation or seller financing.

They may listen to interviews with business owners.

At that point, they might not be ready to hire me.

But they're becoming familiar with my work.

Then one day, they discover a business they want to buy.

Now they need help evaluating the opportunity.

Because they've already consumed my content, they know what kind of advice I provide.

And they may decide to contact me.

That's one of the advantages of content marketing.

You're building credibility before the sales conversation begins.

Why Consistency Matters

Publishing one useful article is good.

Publishing useful information consistently over many years can be much more powerful.

You're creating repeated opportunities for people to associate your name with a particular subject.

And when you occasionally reconnect with those people directly, your content reinforces the relationship.

Shake the Tree and content marketing work well together.

One creates a reason to reconnect.

The other helps establish why someone should remember you.

Why Constantly Changing Industries Can Slow Your Progress

I've noticed that some people frequently reinvent themselves around whatever business topic happens to be popular.

A few years ago, they were experts in one area.

Then they moved into another field.

Now they're promoting something completely different.

There's nothing wrong with adapting to changing markets.

But if you constantly abandon one area of expertise for another, you may struggle to build lasting recognition.

Every major change can require you to rebuild your reputation.

You need to develop new relationships.

You need to demonstrate your knowledge again.

And you need to teach people what you do.

That can become exhausting.

Think About Where Your Industry Is Going

If you're building a consulting, coaching, advisory, or other expertise-driven business, consider the long-term direction of your industry.

What changes are coming?

What problems will customers continue facing?

How can you adapt your services without abandoning the professional reputation you've already developed?

Technology may change how you deliver your work.

Your business model may evolve.

But maintaining a recognizable area of expertise can allow you to benefit from the relationships and credibility you've built over time.

How to Use Shake the Tree in Different Industries

This approach isn't limited to consulting or business brokerage.

It can be adapted to many types of small businesses.

For example, a commercial cleaning company could organize a short educational session about maintaining healthier workplaces.

An accountant could offer a workshop on cash flow management.

A marketing consultant could host a presentation about improving local business visibility.

A contractor could participate in a community fundraiser.

A business coach could organize a discussion about hiring and managing employees.

The important thing is choosing something genuinely useful to the audience.

Then you can contact relevant people in your existing network and ask whether they know anyone who might be interested.

The event becomes a natural reason to reconnect.

And the conversation may lead to opportunities beyond the original activity.

A Simple Shake the Tree Message You Can Adapt

Here's an example of how you might approach someone in your network.

Hi [Name],

I hope you're doing well.

I'm organizing a [workshop/event/community initiative] about [topic], and I thought of you because of your work in [industry or business area].

Do you happen to know anyone who might find this useful?

I'd be happy to share the details if someone comes to mind.

Thanks, and I hope everything is going well with you!

Notice that the message doesn't ask for a sales appointment.

It doesn't pressure the recipient to purchase anything.

It simply provides a reason to reconnect and an opportunity for the person to be helpful.

That's the essence of Shake the Tree.

Five Mistakes That Can Make the Strategy Less Effective

Although this is a simple approach, there are several mistakes worth avoiding.

1. Turning Every Message Into a Sales Pitch

If your message immediately becomes an aggressive attempt to sell, you're undermining the relationship-based approach.

Focus on creating a genuine conversation.

2. Contacting People Without Considering Relevance

Review your network and think about who might reasonably know someone interested in your event.

Don't assume everyone needs the same message.

3. Only Building Connections When You Need Customers

Professional networking should be ongoing.

Connect with people after meetings and events, not just when sales are slow.

4. Expecting Immediate Results From Every Contact

Some people won't respond.

Others won't have a referral.

And that's fine.

The outreach can still remind people what you do.

5. Constantly Changing Your Professional Identity

If people can't easily describe what you're known for, they may struggle to recognize opportunities to refer you.

Build a clear professional identity and reinforce it consistently.

Measuring the Results of Your Shake the Tree Campaign

One important lesson from my experience is that you shouldn't evaluate this strategy using only one metric.

The educational session itself generated relatively few registrations.

But the outreach produced valuable consulting opportunities.

When running a similar campaign, consider tracking the following:

MetricWhat it measures
Messages sentNumber of relevant connections contacted
Replies receivedEngagement generated by the outreach
Event registrationsInterest in the original activity
Warm referralsPotential customers introduced through existing relationships
Consulting or sales conversationsBusiness opportunities created
Paid engagementsRevenue generated from the outreach
Reconnected contactsProfessional relationships renewed

Some benefits may not appear immediately.

A person could receive your message today and contact you months later when a relevant need arises.

That's why maintaining relationships is a long-term investment.

The Bigger Lesson: Build a Reputation That Creates Opportunities

Shake the Tree is useful because it helps activate the professional relationships you've already developed.

But its effectiveness increases when you combine it with a long-term commitment to building your reputation.

Stay connected with people.

Share useful information.

Participate in your industry.

Develop expertise.

And give people a reason to associate your name with a particular problem or service.

Over time, that can create momentum.

Instead of constantly starting from zero, you benefit from years of relationships and professional recognition.

That doesn't mean you can stop marketing.

It means your marketing efforts can become more effective because you're building on an existing foundation.

Final Thoughts: Your Next Customer May Already Be in Your Network

If you're struggling to generate new sales, don't automatically assume you need a bigger advertising budget or another cold outreach campaign.

Look at the people you've already met.

Think about former customers, business contacts, professional acquaintances, and industry colleagues.

Some may know someone who needs your services right now.

But they may not have thought about you recently.

Find a genuine reason to reconnect.

Share something useful.

Ask whether they know someone who might benefit.

And avoid turning every conversation into a sales pitch.

That's the Shake the Tree strategy.

My recent LinkedIn outreach involved approximately 80 to 90 existing connections.

It generated relatively few registrations for the event I was promoting.

But it also produced paid consulting calls, warm referrals, and additional opportunities.

All because I reminded people what I do.

Sometimes the best way to generate more sales isn't to find new people. It's to reconnect with the people who already know you.

And when you combine that approach with consistent networking, content marketing, and long-term professional expertise, those relationships can become increasingly valuable.

More Resources for Growing Your Small Business

If you're looking for ways to improve your business operations and develop stronger systems, explore my resources for small business owners.

Explore Easy Small Biz Systems

If you're considering expanding through acquisition, my Business Buyer Advantage program provides training, group coaching, and consulting to help you evaluate opportunities and manage the risks associated with buying a business.

Explore Business Buyer Advantage

You can also explore my books on business ownership, sales, buying, selling, and managing small businesses.

Browse David C. Barnett's Books

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