Delving into the Entrepreneurial Journey of Ryan Duffy's Franchise Venture

Today's story originates from a unique sale involving a Ryan Duffy’s franchise in Saint John, New Brunswick, intricately linked to the legendary creation of the Donair in Halifax, Nova Scotia.

This particular deal was structured through seller financing for $400,000, highlighting the often complex and underexplored aspects of buying businesses. Unfortunately, the new owner defaulted on payments, leading to legal actions and the establishment's eventual closure. This situation sheds light on the risks of seller financing and the importance of realistic, sustainable negotiation terms.

From this transaction, we can glean several critical lessons for prospective business buyers. First, the importance of due diligence cannot be overstated. Understanding the financial mechanisms and terms of a deal is crucial. Secondly, the art of negotiation is key—terms should be fair and manageable. Finally, the story underscores the unpredictable nature of business ownership and the need for careful financial planning.

Remember, knowledge is your best asset in navigating the business world. Stay informed, stay engaged, and never underestimate the value of a well-negotiated deal. Cheers to your business success, and feel free to share your experiences and questions. Let’s keep learning together.

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Grow your SMB

 

***New Video Alert! What does it cost to grow a small business? Where do you start? More sales? Run some advertising? You start with a plan. Watch. Watch this week’s video here: https://youtu.be/UD06KAjDvuo v Cheers See you over on YouTube David C Barnett

Unlocking Success: The Power of Business Systems

This week I've been asked a question by Anton a Few Years Ago, just give me more videos about business systems. So I'm gonna do just that.

Firstly, it's crucial to understand that every functioning business inherently operates on systems. Whether it's handling customer transactions, managing workflows, or delivering services, systems form the backbone of operational efficiency. But here's the kicker: it's not just about having systems in place; it's about documenting them comprehensively.

Imagine a scenario where anyone, from a new employee to a seasoned manager, can seamlessly step in and understand how things work. That's the power of documented systems. Whether it's a detailed manual, an instructional video, or a simple checklist, effective documentation ensures clarity and consistency in execution.

When clients reach out for assistance, I don’t leave anything to chance. From the initial inquiry to the final service delivery, each step is meticulously outlined and communicated. By documenting both internal processes and client expectations, I ensures a smooth and transparent experience for all parties involved.

But why stop there? Documenting processes isn't just about clarity; it's about accountability. By tracking every action and milestone, businesses can hold employees responsible for their tasks. Whether it's initialing completed assignments or signing off on deliverables, accountability loops ensure that standards are met and deviations are addressed promptly.

Moreover, documented systems pave the way for continuous improvement. By tracking performance and identifying bottlenecks, businesses can refine their processes to boost efficiency and productivity. It's a cycle of optimization that fuels growth and success.

My journey with business systems isn't just theoretical; it's grounded in real-world experience. From running a junk removal business to coaching aspiring entrepreneurs, I witnessed firsthand the transformative power of well-documented systems. And now, I’m sharing my insights and expertise through courses like "Build a Business that People Will Wanna Buy," empowering small business owners to implement effective systems and unlock their full potential.

With that, let's embrace the journey of business systemization and chart a course towards success. Until next time, stay inspired, stay informed, and keep thriving in your entrepreneurial endeavors.

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IP and Brand value in small business

 

***New Video Alert!

So, is a 100-year-old company with a well-known brand worth more?

What about if there are over 1000 names on the past client list?

Does a special trade secret make a business worth more?

Today, we uncover value drivers that many sellers love to tell you about…

Watch this week’s video here: https://youtu.be/0CcQV2yiycI 

Cheers

See you over on YouTube

David C Barnett

Unlocking Business Success: The Power of Staged Buyouts for Long-Term Seller Involvement

 Today, I'm diving into an intriguing question from a viewer years ago– what if you don't have enough capital to buy a business, and you want the seller to stay involved for the long haul? The solution lies in the art of staged buyouts. Check the YouTube video here:

Imagine a scenario where the business in question isn't a small entity but has a significant workforce, say around 10 to 12 employees – perhaps a small car dealership. In this staged buyout strategy, the buyer initiates the process by using the available funds to acquire a small percentage of the company, let's say a 5% stake. Over the years, as the business turns a profit, dividends are issued. However, rather than reaching the minority shareholder, these dividends are redirected to purchase additional shares from the seller.

This gradual approach offers several benefits. Firstly, it facilitates a mentor-mentee relationship between the buyer and the seller, allowing for a seamless transfer of knowledge about the business operations. Secondly, it ensures that the seller receives excellent value for their business. A pre-established buy-sell agreement outlines the valuation formula for shares, and as the company thrives, the value increases, resulting in a higher price for the seller.

More importantly, this staged buyout provides the seller with a secure exit strategy, mitigating the risks associated with unforeseen circumstances. Whether it's a personal crisis or a planned retirement, the exit plan is locked in, offering flexibility and control over the transition.

Traditionally, buyers would acquire up to 49% of the shares through this staged process, with the remaining shares purchased in one transaction. While this might involve securing a loan from a bank, the buyer's track record within the business, coupled with a profitable operation and issued dividends, makes securing financing much easier with most lenders.

For this strategy to succeed, a well-structured business with defined roles, responsibilities, and profitability is essential. This ensures a smooth collaboration between the buyer and seller without constant interference.

If you're looking to enhance your business setup and learn effective exit planning strategies, consider exploring my Small Business Systems Course and Exit Planning Program. 

As we delve into the exciting prospects of staged buyouts, keep in mind the importance of business discipline and profitability for a seamless transition. 

Cheers to your success, and see you next week!

David C. Barnett

Unseen Liabilities- SmallBiz worth less than $1!

***New Video Alert!

This business owner learned that his business was worth less than $1.

How?

Because of the unseen liabilities.

Let’s learn about how companies owe money that doesn’t get shown to you when you look at the financial statements.

Watch this week’s video here: https://youtu.be/a7RY-1LVTiM 

Cheers

See you over on YouTube

David C Barnett

LIVE Pat Ennis Exit Planner More to Exit Planning than just a Sale.

 

More to Exit Planning than just a Sale.

New Livestream guest- Pat Ennis, CExP, CAP®

I’m happy to have Pat join me on a live broadcast.

Pat has been in the wealth planning business since the 90’s and helping SMB owners plan their exit for over a decade.

Tune in and as we’ll be discussing getting a business ready for your exit and just what, exactly, that might mean.

This is a ‘must see event’ for anyone who owns a business or want to one day.

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

Set yourself a reminder on YouTube here: https://youtube.com/live/ai-Hhe9PE98 

We’ll be going live March 25, 2024 at 1PM Atlantic Time and 12 Noon Eastern Time

See you there!

David C Barnett