Show notes from Episode #168 of the Sweaty Startup Podcast.
Nick Bradley visited the show on Episode 95 and talked about why now is an incredible time to buy a business. This rings even more true during the current pandemic.
Every day 10,000 Americans reach retirement age, and so many of the service-based businesses that Nick advocates for are owned by people reaching that age. These businesses are profitable, usually with six or seven figures in annual revenue, and the owners really struggle to find a buyer or successor to continue the operations. Even better is the fact that you can buy one for a great price and have full control over the deal.
Nick is a huge advocate for starting your own business and earning your piece of the market, but knows that buying an established business has its merits. Starting a business can often take 2-3 years before becoming profitable, while buying one can give you a profitable business outright and hands-on training from the seller. Why not buy a business to get past the toughest phase of entrepreneurship?
The timing could not be more perfect. With the COIVD pandemic, many small business owners are falling into financial issues. When Nick Bradley came on the show, there were way more businesses for sale than people buying businesses, and the pandemic is only furthering this buyer’s market.
The business owners that are struggling may not have lived a lean lifestyle to weather this storm, may not have a scalable model, and may still be working in the business and not even see themselves as entrepreneurs. However, their businesses spit out profit and provide a great chance for you to restructure for growth and success.
Buying on Your Terms
Believe it or not, you can buy businesses for little money upfront through seller financing. This means you’ll make a down payment to the seller and then pay them back over time, and even hedge your risk by paying based on profit conditions for the business. Even better, if you buy before September 2020 the US government will make the first 6 payments for you as part of COVID relief.
Since there are way more businesses for sale than buyers, you can call the shots. There should be nothing in the deal that you don’t love, because these sellers are ready to unload their businesses. This can be an emotional process for sellers, they want to see their business live on and they may be disheartened by how tough the process has been. Build rapport with them and build their trust, and they’ll set you up for success as you move forward.
Find Your Deal
The next 6 months in the United States will be an unprecedented time to jump into entrepreneurship through buying a business. Start to look at BizBySell.com and see what the deals are in your area. Email 10 local business brokers and mention that you’re looking for service businesses in the area. You’ll find all kinds of deals from all kinds of businesses, and you’ll find where the opportunity lies.