***New Video Alert!
Everyone is getting rich with Boomer business sales in the Silver Tsunami.
Do you feel left out?
This week, I respond to a wave of broke business buyers who we’ve met and I’ll let you know why you’re facing frustration AND-
WHAT TO DO ABOUT IT.
Watch this week’s video here: https://youtu.be/C9immXZZOdw
Cheers
See you over on YouTube
David C Barnett
Tsunami of 'No Money' Buyers
New Livestream guest-> Markian Pergat
I’m happy to have Markian Pergat join me on a YouTube Premiere
Markian Pergat is an entrepreneur from the Ottawa, Ontario area.
Tune in and as we’ll be discussing Markian experience on how he got into running his own business and entrepreneurship.
This is a ‘must see event’ for people who are interested in running their own business too.
Be sure to join our YouTube Premiere so that you can ask questions, replay will be available.
Set yourself a reminder on YouTube here: https://youtu.be/NHggS-L9JcU
YouTube Premiere will be going live Monday May 05, 2025 at 1PM Atlantic Time and 12 Noon Eastern Time
See you there!
David C Barnett
Today’s question comes from a recent conversation I had with a business owner who had been preparing his business for sale. He told me that, on the advice of his accountant and other professionals, he had paid off all of his business debt to make it more appealing to potential buyers. While his intentions were good, it reflects a common misunderstanding about what really makes a business valuable and attractive to buyers. https://youtu.be/pOJ3B1_K9L8
Let’s get to the heart of the matter: a business’s value is primarily based on its cash flow and risk profile—not its debt balance.
Think of it like this: if you were selling your house, would potential buyers care about your mortgage? Not at all. Your home’s value is based on comparable sales, location, and condition—not whether you’ve paid it off. When you sell the house, you use the proceeds to pay off any remaining mortgage.
The same concept applies to businesses. Buyers are interested in what the business earns—its free cash flow—not what the current owner owes. A business that generates $100,000 in cash flow is worth what it’s worth, regardless of any debt obligations the seller may have.
Yes, you read that right.
When a business has existing debt—like capital leases or equipment loans—these can sometimes be assumed by the buyer. That means the buyer doesn’t have to raise as much cash upfront. For many buyers, the hardest part of a deal is pulling together the financing to make the purchase.
If the buyer can assume certain obligations as part of the purchase consideration, it lightens their immediate financial burden. This makes your business more attractive and potentially easier to sell.
Not necessarily.
While it’s important to have clean financials and a clear picture of your obligations, eliminating all debt might actually take away some of the flexibility a buyer would have in financing the deal.
Instead of rushing to pay off everything:
Organize and document your debts.
Understand which ones are assumable.
Discuss financing flexibility with your advisors.
And remember, I work with clients around the world—Canada, USA, UK, New Zealand, Australia—so if you’re looking for one-on-one advice, I’m just a call away.
If you’re thinking about selling your business, head over to howtosellmyownbusiness.com. You can.
Or grab my book: How to Sell my Own Business
Sign up for my email list at DavidCBarnettList.com to receive exclusive content and 7 FREE gifts.
Cheers, and see you next time!
David C. Barnett
***New Video Alert!
How do you negotiate the best price?
There is the price, terms, conditions, what’s included, working capital items, etc.
It can be a lot. Here’s my advice this week.
Watch this week’s video here: https://youtu.be/nA4iCVgw_gM
Cheers
See you over on YouTube
David C Barnett
International Trade Planning and Problems
New Livestream guest- Lora Rigutto, CITP I’m happy to have Lora join me on a live broadcast. Lora has decades of experience in international trade and is the head of partnerships and community outreach at the Forum for International Trade Training. Tune in and as we’ll be discussing CITP training. Yes- there is a specific professional designation for planning and executing international sales expansions! Yes, we’ll be talking about tariffs and opportunities that may be created by the changing rules and how one goes about planning and executing a new international sales strategy. This is a ‘must see event’ for anyone who anticipates getting into a business that may have foreign sales opportunities. https://fittfortrade.com/ https://www.linkedin.com/in/lorariguttocitp/“If I’m ready to sell my business, should I call my realtor?”
It’s a fair question—but the short answer is no, and here’s why. https://youtu.be/s9HkiHiiEB0
Let’s look at the facts. Realtors specialize in real estate—they help people buy and sell property like homes, condos, office buildings, or commercial real estate. And while your business might include real estate, most don’t.
In fact, when I was a full-time business broker, I sold 36 businesses over three years—and only three of those included real estate. Most businesses are leased spaces, operated from laptops, or based out of people’s basements.
Yet time and time again, I talk to people who assume a real estate agent is the go-to pro for selling a business. So let’s break it down.
Here’s a simple comparison:
Real estate typically involves things like:
Land
Roofs
Walls
Foundations
Doors
Businesses, on the other hand, involve:
Employees
Receivables & payables
Inventory
Operational systems
Customer relationships
Totally different ball games. Selling a business isn’t about the structure—it’s about cash flow, intangibles, and risk. It’s part finance, part operations, part psychology.
So why the confusion?
I live in New Brunswick, Canada, where (believe it or not) business brokers are legally required to hold a real estate license. This comes from outdated laws that imagined every small business as a corner store with a storefront.
Because of this, a lot of real estate agents think they’re qualified to sell businesses just because they hold a license. They’re not. In fact, they often don’t know what they don’t know.
Let’s talk about the Dunning-Kruger Effect for a second.
The Dunning-Kruger Effect shows how people with low knowledge of a topic can often feel very confident, simply because they don’t realize how deep the subject goes.
So, your average home-selling real estate agent? High confidence, low actual understanding of business sales. I’ve had bankers call me in disbelief after seeing someone try to buy a convenience store using a home purchase agreement.
As they learn more, some of these agents realize how much they don’t know—and their confidence drops. That’s when a few of them either:
Step away and refer clients to professionals (good call), or
Level up their skills to become real business brokers (rare but respectable).
✅ Business brokers specialize in valuing, marketing, and negotiating business sales.
✅ M&A advisors handle larger or more complex deals.
✅ In some cases, commercial realtors can be helpful—especially if real estate is a major component of the sale.
In fact, my best referral partners were commercial real estate agents—they understood enough to know business sales weren’t their game and would refer those clients to me.
Sometimes, a business owner wants to sell both the business and the building. Here’s how I’ve handled those situations:
Separate the two: Sell the business first, offer the building as optional (to lease or buy).
If the buyer wants just the business? Great.
If the buyer also wants the property? Bring in a commercial real estate agent.
Now you’ve sold the business and helped an investor acquire a leased property with a stable tenant—win-win.
If you’re serious about selling your business, start with someone who understands businesses, not buildings. You wouldn’t call a dentist to fix your car—so why would you ask a realtor to sell your company?
Need help getting started?
📘 Check out my book How to Sell My Own Business
📄 Or grab my book: 12 Things to Do Before You Consider Selling Your Business
Sign up for my email list at DavidCBarnettList.com to receive exclusive content and 7 FREE gifts.
Cheers, and see you next time!
David C. Barnett
***New Video Alert!
Today, I run down a list of mistakes I see people do when buying a business and let you know how to avoid most of them.
These are not the bits of advice that you’ll hear from most online ‘buy a business’ content.
Watch this week’s video here: https://youtu.be/b_KLvF_j11c
Cheers
See you over on YouTube
David C Barnett
Regrets in M&A deals
New Livestream guest- Fractional CFO Dustin Williamson
I’m happy to have Dustin join me on a live broadcast.
He has years of experience in the world of business in finance roles.
Tune in and as we’ll be discussing regrets that often creep up in mergers and acquisitions and we’ll also talk a bit about planning for deals in cyclical industries given his experience in the Oil & Gas sector.
This is a ‘must see event’ for anyone who foresees a deal in their future as there will be lessons for everyone in this conversation.
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/Jt8d68SzJMo
We’ll be going live Monday April 21, 2025 at 1 PM Atlantic Time and 12 Noon Eastern Time
See you there!
David C Barnett
When you're buying a part of a business, the numbers you get—financials, revenues, expenses—reflect the entire operation, not just the segment you're interested in. https://youtu.be/zrKQWzxN58w
So:
You don’t have clean, ready-made financials for the slice you're buying.
You need to reconstruct what that slice would look like if it stood on its own.
1. Start with Sales
Pull out the revenue attributable to the part of the business you're considering buying.
2. Estimate Cost of Goods Sold (COGS)
Determine whether you can get the same supplier discounts as the full business currently does. If the existing business got volume discounts, your COGS might actually be higher.
3. Forecast Overheads
This is where synergies get lost. Admin costs like payroll, accounting, or purchasing may have been shared. Now you’ll need your own setup, so costs go up.
4. Build a New, Hypothetical Income Statement
Using all the info above, you create a “what-if” income statement as if this were a standalone business.
5. Apply Valuation Techniques
Once you've got projected net income or cash flow, you:
Use a capitalization rate (e.g. 3x earnings), or
Use discounted cash flow (DCF) by projecting future cash flows and discounting them.
Here’s the kicker:
What it's worth to you may not match what the seller thinks it's worth.
Why? Because:
You may lose efficiency (higher overheads).
You might not be able to access the same discounts or resources.
You’re probably taking on more risk.
So your version of the business will likely be less profitable, which should lower its valuation from your point of view.
Sign up for my email list at DavidCBarnettList.com to receive exclusive content and 7 FREE gifts.
Cheers, and see you next time!
David C. Barnett
