How to Buy a Business with NO MONEY- Should you? David C Barnett

How to buy a business with NO MONEY?

I’ve gotten some questions from viewers asking how they could buy a business with no money. 

There is a belief out there that if you can structure things correctly, it’s possible to buy a profitable business while using none of your own money.

I’ve done deals where a buyer borrowed all the money to buy a business, but they did so by putting up some personal assets as collateral.

I’ve done deals where a buyer gets a seller to essentially finance 100% of the purchase, but the buyer was using lots of their own money to improve the business with a short timeline to re-financing it. 

In both cases, we can hardly say that the buyers had ‘no money.’  They certainly had resources to help them make the deals happen.

I made this video to explain the different scenarios that someone might conceivably buy a business with no money and the dangers for the buyers and sellers in each. Watch: https://youtu.be/NVTgDT7Cc2g

In asset purchases, the danger for a buyer, even if there is no down-payment, is that there will be insufficient operating capital and you’d be in a cash flow crisis from day one.

In share deals, if there is a net-positive operating capital balance, the buyer could fleece the company and run away with cash and the seller would be left with nothing.  Who would put themselves in this kind of position other than a parent handing over a business to a child?

The one opportunity for buyers to get their hands on a business with ‘no money’ is usually when there is negative equity.  Watch the video to see my thoughts on this.

If you’d like to learn how to create high returns by making local private lending and lease deals, check out http://www.LocalInvestingCourse.com The Local Investing Academy starts in September.  For a quick introduction, read Invest Local.  It’s available from Amazon stores worldwide or as a .pdf here: https://gum.co/quoB 

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

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Do you live in Toronto or the Maritimes?  I’ve got workshops coming up for Toronto in September on buying and selling businesses and in October-December in the Maritimes.  Book now http://davidbarnett.eventbrite.ca

Thanks and I’ll see you next time. 

Another great 'no-money' video from Glendon

I like Glendon's business education style.  He tells it like it is and calls out his students in his videos.  Learn the truth about starting a business.. just do it.

Thanks Glendon.

Great article on the number of people living paycheque to paycheque and what they can do about it.

I came across this great MoneyWise Blog article about the number of Canadians living paycheque to paycheque and what can be done to find some savings in a budget.

Saving is important because you need your rainy day fund intact before you can save to invest.

Enjoy.

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How to Stop Living Pay Cheque to Pay Cheque

Posted on September 16, 2014 by Andrew SealeLeave a comment

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By Andrew Seale

With files from Melanie Epp

Try as they might, many Canadians are working hard for little gain, according to a new survey by the Canadian Payroll Association.

Around half of those polled say it would be a challenge to meet their financial obligations if their paycheque was delayed by a week and even more – 63 per cent – of young adults aged 18 to 29 are living paycheque to paycheque.

It’s a tough space to be in, says Christine Canning, head of everyday banking at BMO: “It can be overwhelming and very scary,” she says.

BMO’s Rainy Day Survey found similar results, with a quarter of Canadians only having $2,051 in emergency funds – not nearly enough to cover an unexpected health incident or weather a job loss for more than a month.

How can you break the vicious paycheque-to-paycheque cycle? Check out our top tips:

It’s the Little Things

Turns out, breaking the cycle is all about frame of mind – and taking some baby steps. “A lot of us know instinctively what the right things to do are, but knowing what they are doesn’t make it easy to actually do them,” Canning says.

The key is taking a less overwhelming perspective. “Change it from ‘oh my god, I’m supposed to have three to six months of savings stored away, I could never do that,’ to ‘I wonder if I could find 10 dollars a week.’”

As with any financial decision, whether it be tackling debt, contributing to an RRSP or saving, you need to realize that each little decision will add up to a greater whole.

“You don’t have to have a huge amount of money in order to, over time, make a huge amount of difference,” Canning says.

Step 1: Know What You Owe

Taking some time to get to know what you owe can help you decide where to draw a line between your wants and needs. “If you’re someone who finds budgeting intimidating, don’t choose a whole bunch of numbers chose one,” says Canning. For instance, add up all your expenses from debt to rent and groceries and figure out what’s left after you’ve used your paycheque on those bills. Allot a portion of that for non-essential spending and a portion for saving. [CLICK TO CONTINUE TO ARTICLE PAGE, THERE ARE 7 STEPS IN TOTAL]