The 4-Step Method for Buying Businesses Without Your Own Cash or Credit

When it comes to buying or selling businesses most entrepreneurs are unaware of the best practices that allow them to maximize their opportunities. The biggest mistake most often made is they let their emotions cloud their judgment when it comes to making decisions about their business.

Let’s face it. Our business is just like one of our kids. It requires our time, commitment, and passion. When buying a business as a growth strategy, it’s important to understand the seller's mindset. That’s their baby they are selling, and they are very attached to it. You can use this to your benefit and create Win-Win deals.

The 4-step method for buying profitable businesses:

1. Determine:

Determine the suitable types of businesses to acquire. This includes finding businesses that are already profitable, have a strong management team in place, and are undervalued within the market. Pro tip: If your background or expertise is in a particular industry, start your pursuit of acquisitions in that area. Your expertise and network are your most powerful tools. 

2. Acquire:

Acquire the business by utilizing financing from asset-based lenders.  These types of lenders will loan you the money based on the assets that the business you are acquiring owns and not your personal credit score. You can also set up 100% seller financing deals or use deferred down payment and double escrow strategy so as to not require any of your own cash investment.

3. Delegate:

Delegate the management of the businesses to qualified individuals by promoting from within or hiring a recruiting agency.  ZipRecruiter and Indeed are useful tools when promoting within is not a viable option. This will free up your time so that you can focus on finding and buying more businesses.

4. Rinse and repeat:

Take the profits that the businesses generate and do a Rollup of more businesses in your industry to create a larger company under your holding company. This will allow you to grow your wealth exponentially over time. Additionally, when you exit you can get 10x multiples from a larger company.