Entrepreneurship Through Acquisition

Every week I bring you a couple gold nuggets to inspire growth in your business, to build wealth & create freedom. Find me on Twitter @brianbeers

If you want to become an entrepreneur there are two ways:

1. Start a business

2. Buy a business

For many, entrepreneurship through acquisition is the way to go. Here’s why:

Everything’s for Sale

There’s millions of baby boomers retiring every day. Many of them own & operate a business with no succession plan.

They don’t want to go through the hassle of selling and one day decide to close up shop. If you can get in front of these owners you can take over their cash flow, operations, systems, & team creating a win-win scenario.

Seller Financing

Don’t go to pay cash or go to the bank for a loan to acquire the business. Have the seller loan you the money to buy their business.

How does it work? The seller becomes the bank. You agree on loan terms such as down payment, monthly payment, and the number of payments. You agree on what collateral you’re going to put up to secure the loan and what happens if you don’t pay. The attorneys draw all the docs and you’re good to go.

I’ve done over $5 million in seller-financed acquisitions and wrote about the process in more detail.

Existing Cash Flow

When you are start a business from scratch there’s zero cash flow. In many cases the business is negative cash flow for multiple months until sales rise enough to cover your expenses.

When buying an existing business there’s already cash flow. The existing cash flow provides you a solid foundation to build from.

Team & Culture

An existing business will have an experienced team in place. Depending on the size of the business and the owner's role it’ll have management, sales, production, & admin.

We’ve acquired multiple businesses that had excellent people but the culture was stale. We breathe new life into the business by investing into new technology, marketing, and communication platforms like Slack, Zoom & Loom. We bring new energy, ideas & excitement that has been missing for years.

This spark lights a fire giving you an instant performance boost.

Antiquated Systems

All the businesses I’ve bought from boomers have antiquated systems. Fax machines, Windows 2007, ineffective marketing, etc.

An owner on their way out isn’t thinking about innovating or change. They are thinking about retirement or their next adventure.

Easy wins by upgrading the computers, rolling out new marketing, setting up a CRM, improving the sales process, etc.

How to Get Started

Do you want to type of business you want to buy? “I’m open to anything” is not a good answer.

• Get very clear on what you want and don’t want: landscaping, plumbing, solar, pizza, online marketing, t-shirts, pet grooming, auto repair, etc.

• Franchised or not?

• In your backyard or 2 hours away?

• How much existing cash flow do you need?

Start browsing BizBuySell to get an idea of what’s out there.

Follow me to on LinkedIn, Twitter, this newsletter to learn more.

Business with Beers

Every week on my podcast I bring you the stories of entrepreneurs about building their business, wealth & passive income.

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