How To Buy A Business

Introduction

Most business owners want to grow. If that is you; read on.

There are two ways to grow: “organically,” or through mergers and acquisitions (M&A). In other words, increase your sales/revenue, or buy them.

This book will not disclose much on increasing sales/revenue—that is for another book (start with The Master of The Deal’s Secrets to Grow Your Golden Goose, Not Just the Egg—How to Create the Business Of Your Dreams).

This book will show you how and why to buy a business. Where to find one. What to watch out for. How to negotiate. How to finance the purchase. How to make sure your new business is successful, who you need to help you, and more.

When I bought my first of 37 business entities in 1988, it was nowhere written I would be successful. I overpaid. Knowingly. Because the terms and conditions of the deal were so attractive. And I made money on it from the get-go with positive cash flow in the first 60 days. Then sold the business 7 years later for a handsome profit.

Lesson: pay attention to price and terms. It could have been otherwise. I could easily have failed if not for the sage advice of my trusted advisory team. Over the years I have paid them more than a million dollars for their “tuition.”

Now I am sharing this expertise with you. Because you are my people. My whole family have been independent business owners for 5 generations. Beginning in Germany, my wife’s great grandfather was the “bookbinder to the Kaiser,” then her grandfather started a glass factory in eastern Germany that sold Christmas ornaments and glass eyes to America. After the communist wall came down, her cousin started a now-thriving orthopedic metal-fabricating business in the same eastern Germany. (He is an avowed capitalist now.)

Meanwhile, my grandfather started a glass subcontracting business (just before the Great Depression, no less) in New York, my father started a floor-covering business (just before the Great Stag-Flation), and now our son has bought and runs commercial glass subcontracting businesses. Read his book, Unshattered.

And while I have built, bought, and sold numerous businesses, I still run my own business-coaching firm as well as Corporate Finance Solutions, which delivers enterprise valuations, strategic planning, generational transfers and succession planning, operations audits, financing optimization, leadership training, and business growth strategies.

Also, I am invested in 3 other businesses with a seat on their board of directors. In addition, I count a handful of businesses across the country in my private client group.

Since the mid-1980s, my clients exceed 275 in fields as different as health care, construction, financial services, legal, accounting, manufacturing, real estate service, software and banking. Their businesses represent some $3.6 billion in assets.

When Lee Rust asked me to take over Florida Corporate Finance, I was flattered, and pledged to honor his legacy. His contributions to this book are immense. We have been in direct and indirect communications for over 2 decades.

It turns out we share the same philosophy and ethics; the same finance skill sets and expertise — with different experiences. His indirect as an advisor. Mine direct and first hand as well as an advisor.

What you can expect from me is no-nonsense, no-BS, straight unvarnished truth. Sometimes uncomfortable. Always for your benefit. You want leadership, go to ‘Whose Job Is It Anyway?’. If you want personal finance, I recommend, ‘Smart Choices for Serious Money and Payday!’ Asset protection, Under the IRS Radar’…

In this book, I titled the chapters by the topics, in an organized fashion, and in small bites for your consumption and use and benefit. You are the heroes of our time.

It is so difficult to be a business owner in this era. The risks are greater and more numerous. The rewards can be too — if you simply pay attention to the only three rules:

1. Your job is to get and keep customers (customers, clients and patients are sometimes abbreviated CCPs);

2. Your business purpose is to stay in business; and

3. Once you achieve some critical mass (usually beginning around $2-7 million in sales), your job is only to get and keep your people to get and keep customers. There is nothing else.

Sure, in the beginning you wear several hats. You must eliminate those hats ASAP and delegate them. The only way to do that is for you to attract and retain top talent. And the only way to do that is to grow, which shows your best people that they have growth opportunities with you (otherwise you attract or retain only those with lower skills and talents, leading to your great frustration).

One of the best, fastest and cheaper ways to grow: buy a business. Send me your feedback. There are bonuses sprinkled throughout this book. I also have a surprise—the most amazing Free Offer. Take advantage of it. Have fun. And let’s make sure your business serves you, instead of you serving it.