The Biggest Myth About Buying a Business

Welcome to ‘Scrappy Buyouts’…….The No-Nonsense Guide to Business Acquisitions

If you’ve ever dreamed of owning a business but thought it was out of reach, you’re in the right place. Each week, we break down the process of acquiring a business in a way that’s practical, achievable, and—most importantly—scrappy. No corporate jargon, no MBA required.

This week, we’re covering:

• Why you should consider becoming a business owner

• How you can actually make it happen

• Common myths that stop people from buying a business (and why they’re wrong)

Let’s get into it.

Why become a business owner in the first place

Think potential.

How about considering that your job is not as stable as you blieve. That the salary you recieve could be let go at any minute.

Whilst you have spent your entire life building and working for someone elses dreams, what about your own?

US salaries operate on a different level to most of the world, however, for the UK readers, we know it takes 15 years of climbing a corporate ladder to even dream of making it into the top 10% of earners making over 70K per year.

Compare that against spending 15years on your own dreams.

Scaling your own business.

The end goal could result in millions, if not, still a hell of a lot more than the labour market offers.

So thats motive.

But how to go about it.

Why Consider Buying Over Starting

There are two main paths to financial independence: build something from scratch or take over something that’s already working.

Bare in mind that startup success rates in the US in only around 10-20%, however the rates for successful acquisitions are around 80%.

It is clear who has the upper hand here. This is part of reason I believe in the next 10 years property will take a back seat to acquisitions.

Lets think about it for a second:

Buying a business gives you:

1. Immediate Cash Flow:

Unlike startups, existing businesses already have paying customers.

2. A Head Start:

No need to struggle with product-market fit; the foundation is set.

3. Better odds of Success:

As mentioned above, the failure rate for start-ups is high.

4. More Control Over Your Future:

Owning a business puts you in charge of your time, income, and growth potential.

How You Can Become an Owner

Contrary to popular belief, you don’t need millions in the bank to buy a business.

Its not for just the city slickers.

Buying existing businesses can benefit everyone looking to grow their wealth.

Lets take a look at some options.

Seller Financing

Many business owners are willing to let you pay for the business over time using its own profits. Why? Because if they at retirement age and have no siblings to take it up, it gives them the freedom to enjoy monthly cash-flow and close on the deal.

SBA Loans & Alternative Lending (US terminology - however similar loan structures exist in UK & Europe also, EFG & EIF respectively)

These are Government backed loans and creative financing that can help you secure funds for small business acquisition.

Buy with a Partner/ Private Investor Find someone who complements your skills and puts in some capital. This could even be split with owner franchising if you are starting with completely zero.

Sweat Equity

Work in the business. Learn the business. Become a part owner whilst learning the ropes, with the view to own it outright.

Your time in the business will pay for the acquisition.

(personally not as much of a fan, if you are looking to scale, this takes up alot of your time working for free)

Depending on the value, we could be talking years. Therefore, you will also need savings to survive whilst you sweat it out and take control.

Myths About Buying a Business (That You Should Ignore)

“You Need a Lot of Money to Buy a Business” 

Not true. As we talked about above, many deals are structured with little to no upfront cash.

“Only People with an MBA Can Do This” 

Also false. Plenty of successful business buyers have zero formal business education. It doesn’t take a genius to figure it out, you just need to be a little savvy, or scrappy.

“You Have to Be an Expert in the Industry” 

If you acquire a super nice business like manufacturing tech, and you have no idea about anything with a charging cable, be prepared to hire someone who can. But of course, managers eat into profits.

 “It’s Too Risky”  It’s actually less risky than starting a business from scratch, as you’re buying a proven model. And always remember, anything worth having is risky. Even your 9-5 is risky.

Additional notes:

Search for Off-Market Deals

The best businesses aren’t listed publicly; network with owners looking to retire. How to search for this will be an entire different copy, be sure to stay tuned.

Start Small

Instead of chasing a million-dollar acquisition, begin with a smaller deal and scale up. Local street stalls, coffee shops, local services etc.

There are boomers at retirement age looking to sell their businesses.

You don’t need to acquire Tesla.

That’s wraps up this week’s copy, the aim here was to open your mind a little for those who are not too familiar with buying businesses.

Il be back with another copy soon.

If you enjoyed this, be sure to tell a friend, the more subs we get, the more copies I can put out.

Plus, eyes peeled for referral bonuses.

Aaron