***New Video Alert!
This week- a question from France about whether it makes sense to start a consulting business to meet and learn about businesses that one might buy one day.
Great question.
I personally know a few consultants who have ended up buying businesses they’ve worked on.
I’ll walk you through it in this week’s video: https://youtu.be/E-fdHY7qxmw
Cheers
See you over on YouTube
David C Barnett
The great debate- Is there good small business content online?
New Livestream guests-> Mike Finger and Clinton Lee
These two have been guests on my show before but never locked in heated debate!
Clinton is a long-time consultant who helps leading UK entrepreneurs find the best fit business brokers to represent them in selling their businesses.
Mike Finger is a multi-exit SMB survivor who coaches small business owners in the US on how to make their businesses more saleable.
The discussion?
Is there good content online for people interested in buying and selling small businesses or is it all just hype?
Mike questions what he finds to be most popular.
Clinton says it’s there, but you’ve got to discern the quality of what you consume.
We’re going to discuss this and see if online content creators deliver for SMB learning or if you should be spending your time at the library or something.
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/4KG_DlzUmwM
We’ll be going live September 16, 2024 at 12 Noon Eastern Time and 1PM Atlantic Time.
See you there!
David C Barnett
Understanding Vendor Financing Collateral When Buying a Business
Today’s question comes from Tomo, and it's a great one: What is the collateral for a vendor financing note when you buy a business? https://youtu.be/CzbU6DCLsVo
When you purchase a business, vendor financing (or seller financing) is when the seller agrees to lend you part of the purchase price. Essentially, instead of getting all the money upfront, the seller finances a portion of the sale, and you pay them back over time.
Just like when you take out a car loan or a mortgage, the collateral for the vendor financing note is typically the business itself. If you fail to make payments, the seller can foreclose and take the business back. This gives the seller some security, knowing that they have a claim on the business if things go south.
Sellers might be wary of relying on the business as collateral. They could be concerned that if you mismanage or "wreck" the business, the value of the collateral (the business) will decline. This is one reason why vendor financing often aligns the seller's interests with yours—they want to ensure you succeed so they get paid.
Seller as a Mentor: Because their money is on the line, sellers often provide more extensive training and support to the buyer. They have a vested interest in ensuring that you succeed, so they may act as a mentor during the transition period and beyond.
Transition Assistance: With vendor financing, sellers are usually more willing to help ensure the business runs smoothly, offering guidance and assistance that might not be available otherwise.
Tangible Assets: Any other valuable assets within the business, such as equipment or inventory, are typically already used as collateral for other lenders like banks. This leaves the business itself as the primary collateral for vendor financing.
Personal Assets: In some cases, a buyer may offer personal assets as collateral. However, most buyers are financially stretched after the down payment and may not have much left to offer as collateral.
The Business Itself Is the Collateral: In most cases, the business you are buying serves as the collateral for the vendor financing note.
Mutual Success: This structure incentivizes the seller to support the buyer to ensure the business continues to thrive and the seller gets fully paid.
If you enjoyed this and never want to miss any of my content, be sure to sign up for my email list at https://www.DavidCBarnettList.com
***New Video Alert!
I often get asked what kind of businesspeople should be looking for.
So, today I made a list of criteria for people to consider when deciding what to buy or start when it comes to the world of small business.
I’ll walk you through it in this week’s video: https://youtu.be/_6rezgHbVN4
Cheers
See you over on YouTube
David C Barnett
Are you in Sales? Or are you a CLOSER?!?
New Livestream guest-> Bob King- extreme closer and author.
I’m happy to have Bob join me on a live broadcast.
He’s got years of experience in Hollywood and in direct sales and closing deals in one day.
Tune in and as we’ll be discussing his new book; The Joy of Closing.
This is one of the best sales books that I’ve read in awhile.
I enjoyed it so much, I asked Bob to be on the show.
This is a ‘must see event’ for anyone who needs to bring in revenue to a business or manage some sales people.
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/RBLsCIr4cUY
We’ll be going live Monday September 09, 2024 at 12 Noon Eastern Time and 1 PM Atlantic Time.
See you there!
David C Barnett
Today’s topic comes from John, who’s curious about the benefits of running a business despite the stress, frustrations, and anxieties it can bring. Here's a detailed look at the positives and how they outweigh the negatives:
Flexibility: One of the greatest perks is the ability to control your own schedule. I work while my kids are in school and can be there for them after school. This kind of time freedom allows you to balance work and personal life on your terms.
Income Growth: Unlike a fixed salary, running your own business means there’s no cap on how much you can earn. The more successful your business, the greater your potential income. You can continually create new products or services to increase your earnings.
Location Independence: You have the freedom to work from virtually anywhere. As your business grows, it can become less dependent on a specific location, allowing you to travel and work from different places if you choose.
Personal Goals: Owning a business lets you align your work with your personal mission. For me, it’s about providing a great childhood for my kids. Running my own business supports this mission by offering more control and flexibility.
Work-Life Balance: The flexibility to take extended time off is a huge benefit. I can spend weeks traveling without the constraints typically associated with a traditional job. This flexibility enhances your quality of life.
Efficiency: By employing others or using contractors, you can leverage their time to create more value. This means you can focus on high-value activities while delegating tasks that others can handle more efficiently.
Reduced Risk: When you own a business, your income is spread across multiple customers rather than relying on a single employer. This diversification can reduce financial risk and provide more stability.
Identify Issues: If running your business causes significant stress, it might be due to underlying problems. Analyzing and resolving these issues can improve your experience and make your business more enjoyable.
Stress Management: Stress and frustration can stem from poor time management or inadequate organization. Improving your personal management skills can alleviate some of this pressure.
Adaptation: Growing a business often involves overcoming challenges. These experiences, while stressful, contribute to personal and professional growth. Learning to manage these situations effectively can turn them into opportunities for development.
Starting a business can indeed be stressful, particularly if it’s not yet profitable. Buying an established business with proven cash flow can be a less risky way to enter entrepreneurship, as it avoids many of the initial struggles and uncertainties of starting from scratch.
Running your own business brings a range of significant benefits that often outweigh the stresses and frustrations. It offers freedom, flexibility, and the chance to align your work with your personal goals. Managing stress effectively and addressing any underlying issues in your business can enhance these positives and contribute to a more fulfilling entrepreneurial experience.
If you’re interested in learning more about buying a business or managing your own, check out my new book Buying vs. Starting a Small Business: A Guide to Keep You from Going Broke available Find it now at Amazon.com here: https://a.co/d/bdsOvUe