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Integrity & Awareness by Paul Burnstein

Wednesday, January 31, 2007

To Trust or Not to Trust, that is NOT the Question

I want to trust people. I try to believe in the basic goodness of all those I interact with. I like to believe that people do not choose to act maliciously.

I was working on an international deal that involved people from a few different countries. We were talking about a very large deal where one company was securing collateral for another company to get a loan. I was introduced to the potential lender by a broker I have worked with in the past. The broker and I did not see any of our deals close, but we did get to know each other a bit through the process.

In doing the due diligence on both sides, we found that the lender was unwilling to provide any form of references. We could not find any information on him online other than that he appeared to have been scammed a few years back in a Ugandan mail scheme (NOTE: No one from Africa needs your help to get their riches, that were left by their dead, diplomat father, out of their country!). I spoke with him and repeatedly asked for some form of reference. He denied me each time.

I spoke with the broker who had given me this connection; coincidentally he is a Londoner originally from Uganda. He was vacationing in Uganda and I called him to find out any information I could on the lender, including information on past deals they had done together. The broker was very vague. He did not have any examples of actual deals they had done together, but kept saying to trust him, that he knew the lender could perform. He was talking around in circles a bit and kept saying, "if we can't find any bad information on [the lender], then everything must be good." That logic is quite faulty. It is not about blind trust! Honesty is great, but in business we need to be able to do due diligence and know for ourselves what we are stepping into.

This was a big red flag. We did continue moving forward with discussions, only because the next stage was bank to bank communication that was safe for the borrower. Ironically, the deal fizzled because the borrower could not provide the required documentation to proceed. Perhaps this deal will come back my way again. If that is the case, I will take them to a different lender, a private investment bank that I have worked with in the past and I know that they can perform and are quite willing to be "checked out." This is a more expensive route, but there will be a lot less time wasted.

Tuesday, January 30, 2007


I just got off the phone with a friend who is a banker and we were sharing stories about the unrealistic expectations of potential borrowers of funds. I told her about a broker that brought a deal to me for a multi-million dollar resort. This broker provided me with financial statements scanned into a computer and out of order. When someone is looking for money in this range, one would expect them to go out of their way and provide documentation that looks professional; and is in order.

I understand that accounting software data is not always readable when it is sent as a file to others. A simple solution that I have used is to print it to a PDF file. This is then readable by anyone who has a PDF reader. I use CutePDF ( which is a free PDF writer. This writer is great for any documents that I send people which I do not want to be editable, such as contracts.

Pay attention to how you are presenting yourself in person and on paper (e-mail included). Check the spelling of documents and make sure that attachments that you send people look like you have read them before they went out. Putting in the extra effort in the beginning can really help to make a difference in the long run.

Monday, January 29, 2007


Here is my rant for the day.

My office has shared space for trash and recycling. I took down some recycling and broke down all of my boxes. I also had some trash and took that down as well. As I was putting the trash into the dumpster, I saw that there at least ten boxes that in there that were not even broken down.

How unconscious must one be to not even care that there are separate boxes for recycling? This person could have at least simply put the boxes in the recycling...even if they didn't break them down.

To me this is so simple. Our natural resources will not last forever (period). Why not help where we can?

For those of you who don't recycle...try to make some effort. I know not everyone will have a compost heap, but at least separate paper recycling from your trash. Or, go on living life like you are the only one who matters and give no thought to anyone or anything else in this world.

Follow Through

I often begin my work week by looking at e-mails that I need to follow up with. These are not people that I owe responses to, but rather people who have never responded back to me. I resend them the last message I had sent to them, point out that I have never heard back from them and then ask for a response.

The frustrating part is that these are generally people who have contacted me and are requesting my services. I follow up as quickly as possible and then I generally have to wait for a response. As my business grows, I will no longer chase down the non-responders, but at this point, I need to build my business and if these people have a need for my services I better track them down and keep them interested.

The point is that we need to put in extra effort to build our businesses. Even if people are chasing us down for our services, we need to work to make money. Perhaps we can hit a certain point where we do not need to still be "hungry" and can just let business come to us. However, I am sure most of you know that as soon as you know longer try, business dries up. We must always be cultivating new business and new relationships in order to maintain a strong and/or growing business.

Wednesday, January 24, 2007

Passing Business Cards

I was at a networking event last night with about 150 people. It was very crowded and noisy, so it was difficult to talk to many people. Towards the end of the night, a woman was making her way through the room handing everyone her card, asking for their card and then just walking away.

Generally a card that I am handed blindly gets thrown out. The only way to really network is to talk to people and actually make a connection. Then it makes sense to trade cards and get in touch in the future. Often when someone hands me a card without us speaking first, I have no idea what they do and it is a waste of paper.

Take the time to speak with someone first if you are interested in getting their card or giving them one of yours. Don't waste time just throwing cards at as many people as possible.

Friday, January 19, 2007

Computer Dependency

I am just going to vent for a quick second. Computers save us a lot of time...until they no longer do. Some days they just freeze up or crash and there is a lot more time spent on getting them up and running than is necessary.

Today is one of those days. I think I have resolved the problem, but it has left me quite frustrated. Time to step away from the computer for a bit.

Looking forward to the weekend!

Tuesday, January 16, 2007

Punctuality at Meetings

I had a phone meeting set for 8:30 this morning. We had prearranged that she would be calling me. At 8:50 I called her to see if we were still on. She said yes, but that she had had some car problems and wanted to reschedule it for 9:30. That was fine with me, but why hadn’t she called me first?
I have found that we are all very busy people, but some of us do not recognize that others are as busy as we are. I have had some business lunches recently where I have shown up on time (if not early!) and the other party arrives fifteen minutes or more late. Personally I hate the feeling of sitting in a restaurant waiting on someone else, but that is coupled with the fact that I usually have work that I can be doing as well. When I set an appointment with someone I expect myself to be there and I expect the same of the person I am meeting with.

The point is to simply stick to what we say we are going to do. I understand that things come up; they have for me as well. However, if I am more than five minutes late, I call to let the other party know that I am running late, but on my way. Take that extra time to acknowledge that the other person’s time is important and that you plan on making it to your meeting, just perhaps a little late.

Think about it.

Thursday, January 11, 2007

Agreements in Advance

I was working on another deal a while back and it was for a residential mortgage, not something I normally work with. I brought the deal to Bill, an acquaintance through the local Chamber of Commerce. I trusted what I knew of Bill and I had always liked what appeared to be his approach to doing business.

This deal was for a large property and I knew it was not going to be a simple process. Now, Bill works for someone else and he does not have approval to make deals with me directly. From the beginning I wanted to have a deal in writing simply stating that we would share all fees. If the deal did not go through, I would be owed nothing, but it was my client and I was not going to just hand him off.

Bill kept telling me that his boss would not sign any form of agreement with me until they knew if they could fund it. This was completely backwards to me. They wanted me to release all of the information I had, but would not give me any form of guarantee, nor would they discuss what sort of fee sharing split they had in mind. This is a classic example of putting the cart in front of the horse. I should have walked away at that point, but I was trusting of Bill and wanted to see this deal go through.

It looked like the deal was going to go though and Bill spoke with his boss and came back to me with his idea of fee splitting. We were not on the same page. I had lost my bargaining power however, since they now had all of my client’s contact information. It turned out they couldn’t do the deal, so I moved onto another connection of mine who was willing to sign a confidentiality agreement and fee splitting agreement before I would even release any information to him. That is how it should always be done from the beginning.

We all learn from our mistakes, but hopefully you can learn from some of mine and save yourself some time!

Monday, January 8, 2007

Agreements in Writing

I have a very good friend, Sam, who I have also been doing business with. When we began working together, we verbally agreed that I would receive a predesignated percent of sales for any customers that I bring to him. He even acknowledged that this would be for the life of the client. Being the stickler that I am, I asked for an agreement in writing. He didn’t feel it was necessary but was willing to appease me by sending me an e-mail.

The sum total of the e-mail was: “[X]% for all sales referred.” Trying to be a trusting friend, I let it go.

Five months later, almost to the day, Sam and I went to lunch to discuss a new direction his business was potentially taking. I brought up the idea of writing this book on business integrity and he seemed all for it.

Around the same time, I set Sam up with an associate of mine in Australia. They chatted and Sam got back to me after their chat, quite excited, that my Australian associate was interested in being a distributor of Sam’s services for the entire Pacific Rim. Fantastic, I thought!

Then Sam sent me an e-mail stating that he felt our agreement might be too large for this deal, so he wanted to discuss restructuring this. What? He would have never met this guy had it not been through my efforts and connections. Wonder why I wanted to have a deal in writing?

Sam and I went up and back a bit. I discussed the situation with my primary mentor, a fantastic businessman, and my father, Peter. Big Pete tried to calm me down and reminded me that I did not want to lose a friendship over this, even though he did agree that I had a right to be frustrated.

I went back to Sam and he definitely caught on to the fact that he was rubbing me the wrong way. He said he would honor our agreement. If only it ended there.

The next stage was that while he acknowledged that our agreement was for the life of the client, he believed that could damage the possibility of his selling his business. Once again, I called Big Pete for help. I received a quick reply, “tell him that he can buy you out of your agreement with his profits if it is a sticking point in selling his business.” I relayed this thought as my own and Sam said he accepted it.

A week later, Sam was to have a meeting with potential investors and I advised him to fully disclose all commission agreements he had in place, including mine. I did ask that we formally put it in writing so that there was no question as to its legitimacy from the potential investors; while I wanted to trust Sam, I didn’t know the investors. I never received much of a reply from Sam and the day of his meeting came and went without my having a formal agreement in place with Sam.

The lesson I learned is that it is important to always put an agreement in writing. I believe even more so if it is a friend. No one wants to lose a friendship over miscommunication. Lay out the agreement in advance so there are no debates after the fact.

Wednesday, January 3, 2007

More On (or Moron) Phone Use

Have you ever called someone and they answer their phone, listen for a second and then say they cannot talk right then because they are in the middle of a meeting? I sure have and I find it incredibly rude. I think it is rude for a multitude of reasons. Firstly, it says to the caller that the person answering the phone is awaiting a call, but that you (the one calling) are not important enough to interrupt the meeting; now go away. Secondly, it tells the others in the meeting that there is someone more important calling, or the phone would not have been answered, and that they should just sit and wait while the call is taken.

I find the whole business completely inconsiderate. When you are in a meeting, don’t answer your phone. Also, remember to turn off your cell phone. There are not many people that I can think of that need to take calls while they are in meetings. The meeting is a designated time to meet with someone else. Show that person the courtesy and respect that they deserve and simply pay attention to them and no one else while in the meeting.

Tuesday, January 2, 2007

Phone Use

More and more, people are using e-mail as a form of communication as opposed to simply picking up the phone. I know that I am guilty of it. I was recently at a convention for an organization I belong to where the president of the organization made the comment that when we have direct questions we should just dial and call as opposed to sending a lengthy e-mail.

I felt inspired by this and the following week, I called the president of the organization to directly ask him a question. He was unavailable and I left a message with his assistant. Four days later, I had not heard from him, so I called again. Again, I left a message with his assistant, but this time pointed out that I had called per his request as opposed to e-mailing him my simple question. Later that day he returned my call apologetically and acknowledged that he had simply forgotten to call me back.

I know that I expect a lot from people, but I do not find it unreasonable to expect a return call within forty-eight hours. It may simply be a message acknowledging receipt of my call and that they will get back with an answer as soon as possible. All I need to know is that you got my message and that you will work on my issue.