Wednesday, July 10, 2019

How hard is it to find comparable transaction data when buying a business?



It’s pretty easy.

You just open your wallet and pay to access a private transaction database.

BUT- then you have to know how to deal with the bits of data you’ll find in there.

AND- that’s the problem.

See what I say about the issues here: https://youtu.be/ANKKqemYCTs



Learn how to buy a successful business at https://www.BusinessBuyerAdvantage.com

Book a call with me at https://www.clarity.fm/davidbarnett  

Stop missing my videos and other news. Join my email list here: https://www.DavidCBarnettList.com   

#entrepreneurship #smallbiz #business #comparables #sampletx #buyabiz

Thursday, July 4, 2019

Can you stack those napkins as high as Carnegie's notes?

Carnegie’s Seller Notes

Happy 4th of July.

I thought I’d help my American friends celebrate Independence Day by relating a story about a famous American industrialist and how he sold his business entirely on a note… well, a whole stack of them.

Andrew Carnegie was born in Scotland and went to the US when he was 12 with his parents. (Barnett is a Scottish name too, FYI)

He was industrious and eventually became an investor, stock promoter and the owner of Carnegie Steel in Pittsburgh.

In 1901, JP Morgan (whose bank still bears his name) decided to roll up all the big American steel companies into one big company.

It was to be called US Steel.

He thought he could cut costs by eliminating duplication and reduce the price to consumers while raising wages and making it nearly impossible for anyone else to get into business.

Maybe it was the inspiration for the game Monopoly?

The sale price of Carnegie Steel was $303,450,000.

That would be USD$7.8 Billion dollars in 2019 money.

By the time of the sale, there were other share holders so Carnegie didn’t receive the entire amount. 

The purchase price for his shares was $225.64 million.

Now, here’s where the story gets interesting and where most people fall asleep or fail to grasp the significance…

He was paid entirely in $100,000 5%, 50-year gold bonds.

What does that mean?

It means he financed the entire sale and allowed JP Morgan to write him a cheque for 2.5% of the balance twice each year for 50 years with the original principle amount to be paid in 1951.

That’s a $5,600,000 cheque twice each year. No principle was paid down.

If the buyer failed to make that interest payment, or ‘coupon’ as it was called, they’d have to come up with enough gold to settle the debt.

At $20/oz, that would be 5,000 troy ounces of gold for each piece of paper. (US dollars were fixed to gold back then)

Since it was 1901, of course, all of these paper notes were delivered to the seller. 

Likely, they’d come by train because the bank that Carnegie used to store them had to build a special vault to house the pieces of paper.

That’s a lot of paper!

Carnegie would have been able to sell some of the bonds to diversify his wealth, but the fact remains… he financed the sale of his steel mill and then went on to become a great philanthropist.

Which means three things:
  1. You don’t necessarily need all the money saved up to buy a great business.
  2. It’s easier to be generous if you’ve enjoyed a life of business success.
  3. You can sell your business to someone who doesn’t have all the money if you believe they are the right person with the right plan.
Happy 4th of July.

To learn more about buying a business check out https://www.BusinessBuyerAdvantage.com

And to learn about selling your business, visit https://www.HowToSellMyOwnBusiness.com

Cheers! and don’t stand too close to me when you light those fireworks.
 

Dave

Wednesday, July 3, 2019

Big Loans for Small Businesses. Is 90% SBA financing a good idea?


Is borrowing 90% of the purchase price of a business a good idea?

Currently, American entrepreneurs are able to put only 5% down and borrow 90% from a bank and 5% from the seller to buy a business.

This is a lot of borrowing.  Otherwise known as leverage.

Is borrowing $19 for every $1 of your own money put into an acquisition a good idea?

Does it matter WHO you borrow money from?

I answer these questions and more from a viewer who worries about the risk of a big bank loan.

Check out the conversation here: https://youtu.be/-ocQGY2LuGE



Here is the video I mention about a 90% financing disaster: https://youtu.be/-CF-b7QdctQ



Learn how to buy a successful business at https://www.BusinessBuyerAdvantage.com

Book a call with me at https://www.clarity.fm/davidbarnett  

Stop missing my videos and other news. Join my email list here: 

#entrepreneurship #smallbiz #business #sba #financing #businessfinancing #businessloan

Wednesday, June 26, 2019

2019 June adventure update. More about Online Businesses



June/July brings even more talk of buying online businesses.

What an exciting month.

We’ve got new members.

We’ve got members buying businesses in another country.

We’ve got members re-engaging with sellers that broke off talks.

We’ve got a new member who has already sold a business.

We’ve got an expert guest call with a leadership coach who has been researching the what it takes mentally to make the move from being in the corporate world to being an entrepreneur..

-and-

We’ve got online business buying expert Jaryd Krause coming back in July for a one-hour in depth call about buying businesses.

If you missed Jaryd’s appearance on the general YouTube channel you can see it here.

Learn all about what’s going on in the update video: https://youtu.be/welJUela4vo 



Join the group.  Meet others like you who want to take action to buy a successful business.

Participate in our group calls and learn from other member’s deals.

Sign up here:
https://gum.co/BizBuyerAdventure 

Wednesday, June 19, 2019

Spot the signs of Entrepreneurial Burnout


Dreading the start of another day.

Do you ever cringe at the day ahead of you when you wake up in the morning?

Do you dread the ring of your phone?

Do you feel like you give all you have and it just doesn’t seem worth it?

Maybe you’re burning out!

This week I speak to entrepreneurial burnout and momentum coach Linsi Brownson who gives us some great insights into this problem among business owners.

If you own a business or will one day, this conversation will be valuable to you.

Check out the conversation here: https://youtu.be/QLnPsOqXa20



Learn how to get systems into your smallbiz here: https://www.EasySmallBizSystems.com

Learn how to buy a successful business at https://www.BusinessBuyerAdvantage.com

Book a call with me at https://www.clarity.fm/davidbarnett  

Stop missing my videos and other news. Join my email list here: https://www.DavidCBarnettList.com   

#entrepreneurship #smallbiz #business #burnout #momentum

Friday, June 14, 2019

Wednesday, June 12, 2019

Will you surf the Entrepreneurial Silver Tsunami? Talk about demographics with Mike Finger




A huge number of Baby Boomers are set to retire and sell their businesses.

This means the price of private companies could be crashing any day now….

Except we’re not seeing it happen.

What is keeping the market from being flooded with retirees trying to sell their businesses?

Is it all hype?

Is there something happening in the market we can’t see from the business for sale marketplace?

What do Mike and I see from the business owners we meet every day?

Check out the conversation here: https://youtu.be/pU_B_nlelqw



Learn about selling your business at: https://www.HowToSellMyOwnBusiness.com

Learn how to buy a successful business at https://www.BusinessBuyerAdvantage.com

Book a call with me at https://www.clarity.fm/davidbarnett  

Stop missing my videos and other news. Join my email list here: https://www.DavidCBarnettList.com   

#entrepreneurship #smallbiz #business #onlinebusiness #website