Today, I want to tackle one of the biggest questions every business owner faces: How do you put a price on a business?
Whether you’re thinking about selling in a few years or just want to plan for the future, understanding how valuations work — and which type you actually need — can make a huge difference.
Learn more about business pricing, exit prep, and MPSP reports: HowToSellMyOwnBusiness.com
Watch the full video here: https://youtu.be/6AFQjkl-Mvs
Everyone needs a book for their business
New Interview guest- Linda Smargis
I’m happy to have Linda join me for a one-on-one interview!
Linda has been a ghostwriter for years helping people and businesses everywhere gain credibility by becoming an author.
Tune in and as we’ll be discussing what kinds of businesses can benefit from the marketing heft that can come from being an author.
This is a ‘must see event’ for business owners who are looking for an edge over the competition.
I even once spoke to someone who used a book in their search efforts!
Set yourself a reminder on YouTube here: https://youtu.be/f984MII_emU
Premiere will be going live Monday December 08, 2025
See you there!
David C Barnett
Key Risks, Financing Realities, and How to Structure a Partnership the Smart Way
This week I would like to talk about a question I received few years ago, Kurt sent in a great question:
“I’ve recently approached a local business owner about partnering—me buying into the business. He might actually be considering it. How do I evaluate this opportunity and what financing options exist?”
If you’re thinking about becoming a minority partner in an existing business, there are unique risks, structural challenges, and financing limits you need to understand before moving forward.
Let’s break it down. https://youtu.be/UNZavOxgg74
If a business is already operating and has financing in place, you aren’t buying the whole business. You’re buying shares representing the equity, not the debt.
Example:
Business value: $400,000
Existing debt: $300,000
Equity: $100,000
If you buy 50% of the business, you aren’t responsible for half the debt—the financing is already baked in. You’re simply buying $50,000 worth of shares.
Here’s a reality many buyers don’t like hearing:
No bank lends money to buy shares in a small business.
The only exceptions:
Personal loans based on your income
A personal line of credit
Loans from family or friends
Rare cases where the seller finances the buy-in
If you’re planning to quit your job to join the business, remember:
Arrange any personal financing BEFORE you leave your job.
Banks lend based on your personal income—not projected future business earnings.
This is the part most people underestimate.
Being a minority shareholder is a lot like getting married—but without the romance.
Why?
Because the majority owner can still outvote you on every major decision unless you create a detailed partnership agreement outlining:
Voting rights
Reserved matters requiring unanimous consent
Profit distribution
Decision-making authority
Buy-sell clauses
Dispute resolution processes
If your relationship relies on the contract regularly, it means conflict already exists.
And conflict usually stems from one critical issue…
I’ve seen many partnerships explode simply because both partners believed they should control the same areas of the business.
Successful partnerships have:
Each partner knows exactly what they are responsible for.
Just like a larger company, the business has a defined hierarchy and workflow.
Partners don’t meddle in each other’s domains.
I recently worked with a partnership where:
One partner was CFO and President
The other was Head of Operations
They rarely stepped into each other’s lanes. That structure is what made the partnership last.
Unlike starting a partnership from scratch, you’re joining a business that is:
Already established
Already operating under one person’s control
Already influenced by one owner’s habits, assumptions, and decision-making style
Here’s the key question:
Is the current owner emotionally mature and business-savvy enough to share control?
If they’ve been the sole decision-maker for years, shifting to shared ownership may be harder than you think.
Some people structure buy-ins over several years. For example:
Year 1: Buyer purchases 20%
Year 2: Company pays a dividend
Buyer uses dividend to buy another 20%
Over several years, ownership flips
This only works when partners have:
Policies & procedures
Job descriptions
An organizational chart
Defined responsibilities
A clear shareholder agreement
Without that structure, the partnership turns into chaos—and somebody eventually wants out.
If you want the full argument, I lay it out in detail in my book Invest Local:
Being a minority shareholder is rarely a good idea
The only exception is when all shareholders are active operators, which applies in your case
But proceed carefully.
Evaluate the owner, the business, the structure, and—most importantly—the relationship.
And remember:
Partnerships are easier to get into than to get out of.
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 .
👉 Want deeper dives like this? Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.
Learn more and enroll at https://www.BusinessBuyerBoardroom.com
This week, I’m diving into a big question:
Do delivery apps actually destroy restaurants?
If you’ve ever thought about buying or running a restaurant—or if you already own one—you need to understand how these apps really work.
I’ll also share real examples, research from The Guardian, and lessons from restaurateurs I’ve worked with.
Want to understand cash flow, margins, and business models like a pro?
Check out my Cash Flow Forecasting & Business Plan Program at BizPlanSchool.com
.Watch the full video here: https://youtu.be/thouWK5QQpI .
Business or personal brand?
New Interview guest- Noemi Ceapa, brand specialist
I’m happy to have Noemi join me for a one-on-one interview!
She’s a big business expert when it comes to developing and implementing brand messaging and now works with small business owners who are growing from one stage to the next.
Tune in and as we’ll be discussing how the brand and messaging may need to change as a business grows from start to growth to maturity.
This is a ‘must see event’ for anyone wanting to start, grow or buy a business.
Set yourself a reminder on YouTube here:https://youtu.be/1dz0ybj6U2I
It will be going live Monday December 01, 2025 at 1 PM Atlantic Time and 12 Noon Eastern Time
See you there!
David C Barnett
I want to share a story about a creative deal I’ve done in real estate — a lease option, also called lease-to-own. https://youtu.be/xXcSGJPHiNg
My neighbors recently inherited a small hobby farm, but the market for that type of land was tough, and traditional mortgages were hard to get. I showed them a strategy I had used a few years ago when selling one of my houses: a lease option deal.
Two Contracts
Standard Lease: Required by New Brunswick law, three-year term, $1,300/month.
Exclusive Option to Purchase: Separate contract, fixed purchase price, $3,000 non-refundable option premium applied toward the purchase price.
Rent Credit Toward Purchase
The rent above market value ($1,300 vs $1,000) accrued as credit toward the eventual down payment.
Mortgage Qualification
Structured to meet CMHC guidelines, allowing the tenant to use their payment history toward mortgage qualification.
The tenants paid rent for almost three years, essentially covering my new house mortgage.
When they exercised the option, the accumulated credits covered their down payment — no extra cash required.
I made a profit, the tenants got a home they could afford, and they took great care of the property.
My neighbors used the same strategy for the hobby farm. By following this model:
They sold without listing through a real estate agent.
They received monthly payments while the buyer improved the property.
The property remained in their name until the deal fully paid out, reducing risk.
Lease options help buyers who cannot get traditional financing.
Structuring the deal correctly protects the seller and incentivizes the buyer.
It works best when the property is thinly traded or difficult to finance.
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 .
👉 Want deeper dives like this? Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.
