***New Video Alert!
In the world of small business investing, we try to separate operating businesses from real estate because the assets are different and are valued in different ways.
But what if the business IS Real Estate?
Marinas, campgrounds, Bed & Breakfasts, motels, etc?
What different considerations are in place and how do we know we’re making an offer that makes sense?
Watch this week’s video here: https://youtu.be/a-nFc0riJZc
Cheers
See you over on YouTube
David C Barnett
Big Brand Output- Small Business Budget
New Livestream guest-> Jaci Russo
I’m happy to have Jaci join me on a live broadcast.
Jaci has decades of experience working with companies to craft the right branding and implement strategic plans to make sure this brand works its way into every level of the organization.
In particular, she’s worked with many small businesses through the Brand State U project.
Tune in and as we’ll be discussing rebranding after an acquisition, Strategic Branding Plans and Rebranding a Holdco.
This is a ‘must see event’ for small business owners and those with aspirations to become one.
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/ld7aqigjpNM
We’ll be going live Monday January 22, 2024 at 12 Noon EST and 1pm Atlantic Time
See you there!
David C Barnett
Hey everyone,
I remember a few years ago I had an interesting exchange with a viewer about a potential investment scenario that I believe could benefit many of you. Let's dive into it!
The Situation:
A viewer on the West Coast shared a unique opportunity. A friend is launching a startup, armed with a solid business plan and approval for a loan from a bank. The catch? The friend needs a certain amount of cash as equity to secure the loan.
Option A: Invest the Money
The startup entrepreneur approached the viewer with two options:
Loan $15,00 or-
Invest $15,000 in the business.
The Dilemma:
The viewer sought advice on the pros and cons of each option and how to secure returns.
Why I'm Not a Fan of Being a Minority Shareholder:
Business owners can manage finances in a way that leaves no net income for dividends, leaving minority shareholders with little return on investment.
The only way this might work is if the shares had some kind of defined preferred rate of return and without collateral, these are still risky.
Option B: Lend the Money:
Considerations:
Collateral: Does the entrepreneur have any collateral to secure the loan?
Interest Rate: Without collateral, think of yourself as a credit card. Be cautious and consider a higher interest rate.
My Advice on Interest Rates when putting your money into these kinds of deals:
For secured loans: Prime plus a few points.
For unsecured loans: Consider the risk and go for higher rates, similar to credit card rates.
Risk Mitigation: If possible, secure collateral for a Plan B in case the business doesn't succeed.
A Personal Touch: For more significant amounts, consider involving multiple investors to share the risk and responsibility.
Investing or lending to startups involves risk, and understanding your position is crucial.
Remember, the success of a startup depends on various factors, and having a backup plan is wise.
If you’d like to watch the video I made about this or download a 10 step checklist here:
Don’t forget to like the video!
Those old ones need more love.
Cheers! 🥂
David Barnett
***New Video Alert!
Charan wants to bring in an investor to help buy a business.
The investor wants their money back in 2 years.
So, how much of the profits should he commit to repayment of this investment?
Watch this week’s video to see all the red flags this question seems to reveal: https://youtu.be/wt3pPN915GA
Cheers
See you over on YouTube
David C Barnett
Few years ago I remember I had a conversation with someone who had been diligently exploring the path to buying a business.
Their experience resonated with common challenges faced by many prospective buyers, and I thought I'd share some insights that might be valuable for you too.
Challenges Faced:
The individual shared two recurring hurdles in their attempts to buy a business
Significant Deposits and Detailed Financial Information:
Sellers consistently asked for substantial deposits as a demonstration of commitment. Simultaneously, they were pressed for detailed financial information, making negotiations complex.
Vendor Financing Resistance:
Attempts to discuss vendor financing were met with resistance, and they found it challenging to even initiate these conversations with sellers.
The First Sale - Selling Yourself as the Right Buyer:
The underlying issue was clear – the individual had not successfully made the first sale. When buying a business, it's not just about sellers presenting their product; it's about buyers selling themselves as the right fit for the business. This involves showcasing your capability, resources, and commitment.
Preparation is Paramount: Approach potential sellers with confidence by preparing thoroughly.
The Buyer Resume: Learn the importance of a buyer's resume in breaking down barriers and making that crucial first sale to the business owner.
Remember, the first sale isn't the seller convincing you to buy their business; it's you persuading them that you are the right person for the job.
Feel free to reach out if you have any questions or if you're ready to embark on this journey to business ownership success.
Download free resources here: MASTERING THE FIRST SALE SUCCESSFULLY BUYING A BUSINESS
Cheers!
David Barnett
***New Video Alert!
Mono has found an explanation of how to buy a house and keep it’s 2021 mortgage rate.
Is this really possible?
What do I think?
AND- how can this creative stuff be applied to small business deals?
Learn all about it in this week’s video: https://youtu.be/0RdqvpkyMME
Cheers
See you over on YouTube
David C Barnett
***New Video Alert!
You want to earn more and build a better company?
Invest some time in learning or improving these skills.
That investment will pay dividends for LIFE.
Find out what they are in this week’s video: https://youtu.be/tQuX3QVer4k
Cheers
See you over on YouTube
David C Barnett
