When Is It Time to Buy Another Business? – Ask Clay Anything

Show Notes

How do you know when it’s time to buy another business? When should you buy another business and when should you just stay the course and grow your existing company? Clay Clark and Doctor Z provide insight and when wisdom about buying a business for a thriver in Colorado Springs.

Coaching Level – Wants to be pushed an 8 on a scale of 1 to 10 (willing to work 10 hours per week on the business) – 10 (50 hours per week)

Coach:

  • Robert Redmond
  • Wants to be pushed at an 8 level (on a scale of 1 to 10 with 10 being the highest)

Core Niche:

  1. He’s been in the flooring business for 20 years and started his own business 4 years ago.
  2. Residential flooring (selling and installing in Colorado Springs, Denver, Billings etc.)
  3. 90% residential
  4. 10% commercial
  5. Subs out 100% of the installation, yet “owns the process”
  6. 100% of his business is based upon organic referrals
  7. Stays in touch with customers by reaching out to them on a quarterly basis
  8. Current schedule satisfaction = 3 on a scale of 1 to 10 (with 10 being the highest)
  9. WANTS 2 TRACKS FOR GROWTH
    1. 1st Track – Traditional growth track that he is on (stay on this track)
    2. 2nd Track – Setting up a business to buy additional flooring companies
    3. NOTABLE QUOTABLE – “Be greedy when the market is fearful” –  Warren Buffett
    4. Question For Dr. Z – Under what circumstances would you buy an existing practice as opposed to opening a new office of your existing brand.
      1. If you can knock out a competitor
      2. If the location is where you want to go
      3. If someone is going through an emotional part of life and is willing to sell it at a cheap price
  10. Would eventually like to be traveling speaker (Like Jim Rohn)

Biggest Limiting Factor:

  1. Finding quality sales associates and consultants (all independent contractors)
  2. Wants to grow from $2.75 million in sales to $3.5 million in sales
  3. He brings in $2,500 per deal

Rate of Growth:

5 (on a scale of 1 to 10 with 10 being the highest)

Path:

Book Your Business conferences tickets at the https://www.thrivetimeshow.com/conference/

Step 1 – Post the Number of Deals You Need Per Week to Achieve Your Goals Somewhere Where Everyone in the Office Can See It

Step 2 – Post the Number of Rejections You Need Per Week to Achieve Your Goals

Step 3 – Block Out Time for Your New Growth Calendar

  1. 1 Hour – Group Interview Every Week
  2. 1 Hour – All Staff Team Meeting
  3. 1 Hour – Weekly Training of Your Team
  4. 1 Hour – Weekly Meeting to Review Financials
  5. 1 Hour (PER DAY) – Daily Meta – Planning Time
    1. Ask Yourself:
      1. “What am I doing that I should not be doing?” and hire someone to do it.”
      2. “What is our biggest limiting factor?”
      3. “What is one action step that would change my life for the better?”
      4. “Am I happy with my progress in the areas of my:”
        1. Faith
        2. Family
        3. Finances
        4. Fitness
        5. Friendship
        6. Fun
  6. 30 Minute – Daily Huddle with Your Team (to Prevent Drifting)
  7. NOTABLE QUOTABLE – “Every time I read a management or self-help book, I find myself saying, “That’s fine, but that wasn’t really the hard thing about the situation.” The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal. The hard thing isn’t hiring great people. The hard thing is when those “great people” develop a sense of entitlement and start demanding unreasonable things. The hard thing isn’t setting up an organizational chart. The hard thing is getting people to communicate within the organization that you just designed. The hard thing isn’t dreaming big. The hard thing is waking up in the middle of the night in a cold sweat when the dream turns into a nightmare.” – Ben Horowitz (The best-selling author of The Hard Thing About Hard Things – The man who grew Opsware and sold it to Hewlett Packard for $1.6 billion in cash)

Step 4 – Begin Group Interview and Never Stop Until Your Brain Explodes

  1. Weekly job posts
  2. Weekly group interview
  3. Have qualified candidates shadow you
  4. Don’t read resumes until they have shadowed you

Step 5 – Optimize Your Local Google Map

  1. Upload the best photos you have
  2. Upload the real hours that you keep
  3. Choose the right name of the Google Map
  4. Optimize the category

Step 6 – Get 100 Google reviews as soon as possible

  1. MYSTIC STATISTIC – “88% of consumers trust online reviews.” https://www.forbes.com/sites/jaysondemers/2015/12/28/how-important-are-customer-reviews-for-online-marketing/#472b1a391928  
  2. AMPLE EXAMPLES –
    1. Oxi Fresh – Carpet Cleaning Quotes
    2. Elephant In The Room – Tulsa Men’s Haircuts
    3. Phone Doctors – Tulsa IPhone Repair
    4. Barbee Cookies – Tulsa Cookies

Step 7 – Create a Google canonical compliant website

  1. AMPLE EXAMPLE –
        1. Type in the following to see our businesses and clients
          1. Tulsa Mortgages
          2. Tulsa Cookies
          3. Tulsa Men’s haircuts
          4. Buy Pumpkins in Tulsa
          5. Find pumpkins in Tulsa
          6. Tulsa pumpkins
          7. What is the best place to buy pumpkins in Tulsa
      1. Variable #1 – Reviews – Must get to 100 reviews as soon as possible (40 before ads will be trusted)
      2. Variable #2 – Canonical Compliance
      3. Variable #3 – Most Content  
      4. Variable #4 – Most Mobile Compliance
      5. BOOKS 
  • Search Engine for Dummies – Bruce Clay
  • The Retargeting Playbook – Adam Berke, Gregory Fulton, and Lauren Vaccarello
  • How Google Works – Eric Schmidt
  • The Honest Seduction – Scott Brinker, Anna Talerico, and Justin Talerico
  • Get Rich Click – Marc Ostrofsky

Step 8 – Design a No-Brainer That Works

  1. AMPLE EXAMPLE –
      1. FREE 3D Mockup / Model
      2. FREE QUOTE
      3. EITRLounge.com – $1 first haircut
      4. Oxifresh.com
      5. Fullpackagemedia.com – ½ off of your 1st shoot
      6. AMPLE EXAMPLE – ShawHomes.com – $15,000 of Free Upgrades, Closing Costs or Reduced Price + Free 3rd Car Garage

Step 9 – Design Retargeting Ads

  1. FUN FACT – The average person has to visit your website 4.7 times – The Retargeting Playbook
  2. AMPLE EXAMPLE – www.harrys.com
      1. Then pull up www.cnn.com and www.foxnews.com and www.tulsaworld.com

Step 10 – Create Standardized Pricing Sheets

  1. 20 hours – 40 hours
  2. Schedule monthly time to update pricing sheet

Step 11 – Practice Delegating to Manager

  1. 4 Hours Per Week
  2. Practice Turning Your Phone Off at 1:00 PM Each Day
  3. The Earth is not creating any more of you and at a certain point you won’t be able to scale yourself

Step 12 – Launch 3 Legged Marketing Stool

  1. Third Party Web Listings
  2. Search Engine Optimization
    1. Create content via transcribed Weekly Podcast
    2. Article writing
    3. NOTABLE QUOTABLE – “I’ve viewed myself as slightly above average in talent. And where I excel is ridiculous, sickening work ethic.” – Will Smith
    4. AMPLE EXAMPLE – “Revolution Health”
  3. Gather Objective Google Reviews
  4. Retargeting Advertisements

Step 13 – Install Tracking System

  1. Lead Source
  2. Create an Inbound Sales Script
  3. Install Clarity Call Recording

Step 14 – Create a Workflow with WOW Experience

  1. Sights
  2. Sounds
  3. Smells
  4. Decor

Step 15 – https://www.thrivetimeshow.com/towerofpower  

NOTABLE QUOTABLE – “Lazy hands make for poverty, but diligent hands bring wealth.” – Proverbs 10:4

Business Coach | Ask Clay & Z Anything

Audio Transcription

Make sure you never miss a broadcast by signing up for the thrive time show podcast and back to a show that’s cooler than the other side of the pillow. It’s the thrive time business coaching show.

He’s welcome to thrive, Dr. they can sell instead of from the bottom. All right.

Welcome back to the thrive time show on your radio and business conferences podcast download and on this short but super effective podcast. We’re answering the questions directly from Mr Preston. Now, Mr Preston. My understanding is that you have a company that is doing well in Colorado Springs and you want to know how to take your company to the next level because you’ve been in the flooring business for 20 years, grinding and you start your own business for years ago and you do. Ninety percent of your business is residential, 10 percent is commercial, and you sub out pretty much the entire process and you’re wanting to know, okay, I want to tracks and z. This is where I want to have you kind of lock in here mentally. Do you know what? I’m going to get out the key and I’m going to lock this thing is trust and once you to lock in on these two tracks, track one, track one, you want to keep your traditional growth track and just keep that consistent because you’re already growing at a nice rate, but the second track is that you want to set up a business to buy additional flooring companies because eventually you’d like to travel and to speak, and to teach people what you know you want to grow from two point seven, $5,000,000 in sales to three point $5,000,000 in sales, so you have a track number one.

You already have a successful growing company, but you want to set up a second track to buy businesses. You want to buy additional flooring company, so I want to spend the majority of our time focusing on that track because a, your coach will walk you through the specific steps, but I really want to tap into disease wisdom on this concept of buying businesses. Now, Z, before we do that, Eric Chuck get a hot take. Yeah. I just want to throw in a little thing for as we’re considering, he also rates his schedule on a one to 10 with 10 being the best schedule at a three. So right now we’ve got to help him improve his schedule as well. SoZ , I’m gonna. Walk Up Preston through what I believe to be the best steps and I’d like to get your take on this on a scale of one to 10.

If you’re saying to me that your schedule a 10 would be like, man, I have time freedom. I love my schedule and uh, one is just a terrible shoot me, um, z. How many guys have you met in their fifties that are trapped in a schedule that is terrible and they’ve been in that schedule for 20 years and they’re just, that’s what they do. They’re just stuck in that. Maybe 55, maybe 60. There are, they’re a doctor or a dentist or a lawyer. There’s somebody they make a lot. They spend a lot and they’re trapped in that cycle of just working every hour for the dollar. Talk to me about, have you seen that happen? Z?

Oh, all the time. It’s almost 95 percent of the people that are. I mean it’s a massive majority of the business conferences people that I know and what happens is, is that so many people, even if they’re, if they’re an entrepreneur, they have a business, they will. All that means is they have control. They’re their own boss, they have a job,

they are their own boss, they are their own boss. They own a job

and and that’s not a bad place to be. Don’t get me wrong, and I think that’s one of the enlightening you would say young grasshopper. More

thing to say is that we try to teach you to not make himself John Job, but to make yourself a bitmap job stands for just over broke because every hour you’re going to get paid back. You look out at the time, but you have no time to enjoy the money you make and that’s not good. That’s not good. So far. Higher

ethereal thinking that Metta space, if you will, is not about and working in the business, but as we say so many times on the podcast and radio show, it’s working on the business and when you make that transition, it’s pretty awesome. It doesn’t happen day one, but and, and the, there’s some people really love what they’re doing.

I’m going to give an example of somebody that I know very well who made this transition three years ago and I forced it to happen to her. Okay. She made $40 per haircut, z. You get in this idea for a data. The average haircut is $40 and this person made $40 per hair cut because they own the company and every time they cut the hair, we worked out a deal. They got 100 percent commission on the haircuts they did to present. So their thought was, well, if I cut to people’s hair per hour, that’s $80 per hour. So I’m just going to work 40 hours a week cutting hair. So when we’re talking about making literally almost $3,000 a week cutting hair sounds nice from Alice Clark, but I brought up the idea, I said, hey, what if you no longer cut hair at all and you make $2 per hair cut, but you never cut the hair.

And there was intense pushback. Yeah, well now this business is cutting thousands and thousands of people’s hair and this person’s making well over $10,000 a month without cutting anybody’s hair at all. But you would have thought it the most offensive idea in the world to go from making $3,000 a week where they’re cutting the hair themselves to making $10,000 a month where they’re not cutting anybody’s hair. Can you talk to me z about the concept of making the mindset of making $10,000 a month, not cutting anybody’s hair or making $3,000 a week cutting everyone’s hair. I mean, because a lot of entrepreneurs get stuck in that cycle of like, well man, I could make $12,000 a month if I do all the haircuts myself.

When you’re taking a $2,000 a haircut, they are quick. I wanted him to play because I, I was, uh, I was, I was laughing and I was really going to do it, but I had something I want to play for you because I recorded some guys at the bar last night. Oh sure. And this is what they say about that last night.

I see. This is a thought. This is a thought. Here’s the deal. What you do now is you have the time freedom to now you can maybe take half of that to do. I mean, it’s one of those things where, what is your time worth? Where do you want to be in life? What are your life goals? What’s going on with you?

So to Preston. I want to, I want to talk. I’m going to speak this in your life. I want to kind of back me up because it’s a deal where Z, uh, last count. Are you 53 still my friend? Yes, I’m 53. Okay. So He’s more wisdom on this. Preston board. Venice, if you’re going, it seems crazy, but if you’re going to grow from a two point seven, $5,000,000 business to a, let’s say $20,000,000 company, you actually have to be to go backwards financially for a while, Z, you’re going to have to hire a really good managers to manage the daily aspects of your company so that you have the time freedom to move forward into by these other companies. Now, get repeat step, stepping to move forward. Z, three steps. Step one is you’ve got to step backwards for who’s steps. There’s so mean. Z. Talk to me about. Let’s go with the optometry clinic. When you decided to open up the second optometry clinic, you had to hire a very qualified manager or are you had to promote or you had to have that conversation where somebody else would entirely run the other location when you opened up the second location.

I had managers already and I had a hire more doctors and so you know, we’re open seven days a week. I’ve got eight doctors that work for me now and so there’s. There’s a lot of, a lot of moving parts to it, but you’re right. Whenever I first I remember I was working, um, when I first started, I was working seven days a week. I was working six in my own practice in that day that I was off. I would find a Gig in town to go work in. I was working seven days a week and I did that for a couple, not three years, more than two, somewhere between two and three years. Two and a half years. Dude, don’t go to an APP. Good. Cut The difference, making it even to a two and a half. We’ll go into co two and a half.

No one’s gonna argue about a few months. Um, and people say, well, why? I go because I can, you know, my, uh, my business conferences children were so young, they were gonna remember me not being there anyway. And, and it was a, it’s Kinda like greg sit around and watch a nfl football where I can go work for the afternoon. And so my, my deal was, is that I worked, I grind and saving money and that’s the thing about is trying to delay gratification living below your means, building a war chest. So then when I said, listen, I don’t want to work weekends anymore, I’m going to hire a guy now. It wasn’t like I don’t have the money to do it. I had the money to do it. And so I did it. Now what, you know, me paying him to work Saturdays, I’m extra Saturdays because just in my practice and he, me paying him to work Saturdays was money out of my pocket. Money I could’ve been making. But I decided at that point in my life for whatever reason, whatever my reasons were, I’ve said, you know what? I’m going to give up some of my money so I can have the time freedom of a Saturday.

Another example was when you decided to invest in Regent Bank, and I’m not sure at what point when you invest in something, when you would call yourself the owner or one of the things. I was on the board of directors and figured out that. But you had not a good banker but you invest, I want to say yes or say no, I believe. Oh, you were a 10 percent owner of regent bank, is that correct? Yes. Okay. And so Rachel Regent Bank was a bank called the Bank of no water. And you guys purchased that bank? Well, it’s really dry out there and a makeup. No water, uh, the bank without water. Uh, that bank had you guys bought that bank for roughly how much? Approximately 13 million. $13,000,000. And today the bank is worth how much,

what? It was the $75,000,000 bank then and now it’s a $500 million dollar bank.

It’s a little bit more, but I want to make sure you get this idea. How many customers a day do you typically meet? Where you check them out? You give them a sucker, you verify their deposits. You because there’s a, there’s a, there’s a new thing. It’s kind of like a, almost like a skee ball on steroids. You, you take the, it’s a nice, it’s like a, a business conferences container and you put it down the chute and so somebody says, Hey, I would like to go ahead and deposit $472 and you go sir, go ahead and fill it. The deposit slip and containers, containers and they and they sinned the container through and it goes through the tube and all of a sudden you, um, so when you, you fill it out and you put a sucker in there, you put the envelope with the cash in and the whole thing. Z. How many people typically do you a greet every day? How many people do you help them with? Their deposits? How many people per day are you meeting with? Helping them with their deposit slips to make sure that their money is deposited properly, accurately at region bank. Hold on, I’m counting, I’m going to. I’m thinking. Give me one second.

Zero. But what did you say? Zero. Now when you put in the money into region bank, be assignment Z, it can be erased. Delirious. When you put the money into the bank though, you put money into the bank and you invested the money, you in the bank and in the character of Sean Copeland, right? The CEO, the president of Regent Bank. Right. Do you put the money in? Can you explain what happened to the economy? Right after you put 10 percent. It was the worst time ever to buy a bank. It was the big downturn in [inaudible] eight. It was like you were out counting cows and pastures you don’t get this thing sold some to the US economy for anybody just tuning rash just crashed over those that had been on another planet like Mars or Jupiter or whatever. It took recess. It took recess. It said, you know what?

I think I’m gonna. Take a time out. I think lunch is over. I’m going to go to recess. But you invested in good people and a good man. Sean Copeland in the bank? Yes. Yes. And you guys just kept being consistent. The economy. How much were you? How excited were you were when Ben Bernanke, he decided to go ahead and to do bailouts for banks. Did you care, were you against it, were you, for it, what was happening in your mind right at the time where you’re going, this economy is cratering. And were you in favor of the stimulus? Did you not like it? I want to know because you, you had a bank at the time, well, you know, you say bail out, but you had to pay it back. So it was alone, but it was called the bailout. Well, it was called the bail out, but it was, it was a loan to banks and it’s, I was for it because I thought that, you know, our, our financial system needed.

The problem was we had some problems and that is, was there a perfect. You don’t mind, would you wait for a perfect solution? You never do anything. And so it was the move at the time and it worked to some degree. Um, and um, you know, we’re apparently the last time I checked we’re alive and kicking in, our economy is doing very well. Okay. So you were in, you were in favor of that. Uh, but let’s say you weren’t in favor or you weren’t in favor of, what does it have to do with our thriver? Well, thrivers out there alone. I bought. I’m about, like I said, I did make a good banker because I want to say yes, give them a loan and they need a alone right? Yoga alone. But beggars are more like A. I want to make sure I get to make this real for our thriver there.

Our thriver out there is going, okay, I want to scale my company on a scale of one to 10, 10 being the best, one being the worst. I am not happy with my schedule. I’m a three and I want to grow from two point seven, $5,000,000 a year of sales to where I want to grow on the second track where I’m starting to buy other companies. And so Z, if you did not, uh, get yourself to a place where you were completely removed from the daily operations of Dr. Robert Zoellner and associates and the xe 66 auto auction and the other ventures your a to z medical and your diagnostic sleep center. Dr Z sleep center. If you had not removed yourself from the daily operations of those businesses, could you have afforded the mental capacity or the financial capacity needed to invest in a kind of a rebranded startup bank? I mean, would you even have the time or the money to do it? Well, no, you don’t. If that’s the thing about it is that if you’re still spending a significant amount of hours in your business, then you’re not ready to get another business or business conferences, and I would challenge him right now instead of buying other flooring companies, you might and you may the right deal,

but usually it’s not the right deal. Usually people want more. Usually people think their business is worth more than it is. It’s my baby. It’s my baby. You know? I tell you what, my grandfather started that company. My grandfather had been doing this 12 years ago, 12 years ago. Sentimental value. Do you think we’re just going to go off the numbers? No. Twelve years ago, my forefathers for four score at 32 years ago, but we’ll hold these things to be self evident. Here’s the thing about it is it’s I find it almost universally true that it’s better to to, to take care of that just to another, another outlet for you. Another, another, another office, another business that’s you, your brand, your, your. You’re instead trying to rebrand stuff. I get in, negotiate and then buy and then figure out a way the numbers aren’t right or aren’t exceptions, but very rarely, right. I’m not going to work. I want to walk you through the

exceptions. If I can go through this. The exceptions are this here check, but I want to make sure we, we, we, we put this in the show notes. Warren Buffet says, be greedy when the market is fearful. Warren Buffet says, be greedy when the market is fearful. SoZ , Warren Buffett’s whole mindset is if a company is in free fall, like bank of America was when the economy collapsed. I mean, the shares for Bank of America really could not have got any lower without a government stimulus or bail out, right. Um, so that’s when he decided to buy them because he’s like, they can’t get lower. So if you’re out there as if you’re wanting to buy a company that’s bombing, I mean, you can do that, but you also have to embrace that you’re going to have to go in there and basically redo everything. And so Z, I mean, right now, let’s just say there’s an optometry clinic out there that was available to purchase now in Tulsa. Could you legally buy a third optometry clinic if you wanted to in Tulsa?

But I could. I mean, the, the thing about the laws in Oklahoma are such that if I, if I personally owned, of course my daughter’s an optometrist. I mean I have, I have guys that have been with me, you know, 20 plus years that I would trust to put it into their license, so to speak. Um, but to think about it is, is that if you own more than two, then they, the law currently says you have to treat it as a commercial entity, which is beans, that there’s two separate doors, a door for the optical and indoor for the doctors. So like if you’ve ever been into a, if you’re listening right now, if you’ve been into a lenscrafters, there’s a separation of the doctor and the optical if you’ve ever been into a lot of commercial entities and so I can have as many as I want. I just have to treat them differently. And that was one of my big advantages is having one door you walk in, it’s all in one room for the customer. So I feel like it feels like it’s a, a commercial setup and just the feel and the flavor and the look.

So if somebody, let’s say someone’s listening out there and they’re an optometrist and they’re wanting to sell their practice to you under what economic variables does it make sense? Let’s say a guy does. I’m just making up an example. Let’s say a guy, he’s an optometrist out there, z and the guys doing $2,000,000 a year of gross revenue. Okay, and he’s in Oklahoma City. Under what variables would it make sense for you to even entertain buying as opposed to just starting your own in Oklahoma City? I mean there what, what kind of certain way you go? I would have to see at least a, b or c before we even make sense to even think about it. Because you know you’re marketing, you know your systems, you know how to train people, hire people, you know how to do that and this isn’t. This isn’t like a get rich quick thing.

You know the system so you can just start a business tomorrow in Oklahoma City you can hire the people, train the people market you could. You know what you’re doing. So under what scenario would even make sense ever to buy a competitor? Well, here’s the deal. It makes a lot of sense. If the deal can be done correctly. Number one, you’re taken out a competitor out of your market. Okay? You’re not competing against them because right now if I go to golden city and open up cold, like you just said, I got that guy knocking him down to two mil a year. Okay, so that’s a competitor. Someone got to kind of drive into. So one, if you could knock out a competitor, it might make sense to acquire. Just put us on the show notes there. Now I’m ready to knock out a competitor. It might make sense to acquire only if you could potentially knock out a competitor.

Yeah, no, no, that’s a great reason to do it because you knock out a competitor. Number one, you’re going to sign along noncompete and uh, you know, see you later. Alligator. Number two, if the locations where you want to go, I mean if I drive around Oklahoma City and I go, this is the hotspot. Oh wait, there’s a guy here already. I’m going to walk in the door and see what his price tag is. And so if location, location, location is a, is a good thing for you, then that’s the next movie. You said if it’s the location is hot, then that makes sense. Absolutely. The next one, I know what you’re buying. I mean there may be some real estate involved, there may be some, you know, some of the other things. And so now you’re kind of not only doing the optometry practice, but you’re also doing some commercial real estate.

Okay. Now maybe it makes sense to step out and do that. Okay. Bonus move. If a guy’s going through an emotional situation in his life, and this sounds horrible, but z, these are, these are real scenarios. These are real scenarios. Um, when I was building my company Dj Connection Dot Com, do you know the best time to buy speakers from a competitor z when they went out of business? Oh yeah. Dude. Every time they went through like a personal drama, like one of my competitors who got arrested with a dui and it like, was it like a bad news story? And he got arrested and I’m going, it’s terrible. But if you ever wanted to sell us gear, right? Because it’s like, who wants to buy used speakers a DJ companies. So it’s like, it wouldn’t make a whole lot of sense for me to want to buy my competition and pay for the now as far as what a company’s valued at, there are all different ways to do that, but I want to walk you through the rules of thumb and I want to talk about this and then we’ll wrap up today’s podcast because your business coach will walk you through the next steps.

But traditionally if you go into a bank to secure financing, to buy a company, aZ , a small business conferences in America, they’ll typically, the banker will look at the profitability, the sustained of the current company, and they’ll multiply that times two and a half. So let’s say a company makes $100,000 a year profit. A banker who’s typically sane would say, uh, at a maximum we could value the company at $250,000 plus assets after depreciation. So if you’re in the flooring installation company, they might say, uh, some of that wood floors kind of timeless. That carpet could be dated. All the tools have no value after depreciation. So if their competitor makes $100,000 a year profit, the most we could lend you for that is tutored and $50,000 plus a, maybe they own a building, maybe they have a few tangible things. So the, the, the profit times two and a half plus the depreciated value of assets because z at the end of the day, I’ll do the end of the day. Most deals are done through a bank. Most people use lending to buy businesses. Correct. So when you look at a business, is it even because a lot of people can say, well, my business, if you take my profit times 20, that’s what it’s worth. Because Uber was valued at five point 2 billion and they try to kind of compete with what they’re reading in the Wall Street Journal or something. But a small business

that it’s difficult to buy a business. And that’s what I’m telling our writer, enter our email or inner. Yes, it’s difficult to buy a business. Don’t get frustrated. Read that. Don’t waste a lot of time. It, you know, make, make an early stab at. If it’s a person that’s in distress, if it’s a person that is actively wanting to sell, that’s a much better target than just walk into some place, say, hey, use this hostile takeover. I’m taking this thing over. How much you want for it? How am I quit your job? How much you want right now? For right now? I come in here, I write you a check, check or cash. I got cash into trunk. You know, got a briefcase, get the body. Forget the body I got shoveled past the body, looked past the shovels, and I want you to look for the cash cash.

You may have to move the shovel over to get all the cash, but help my foot out of the way. It’s how much, by the way, why will here, if you do know of a good, uh, uh, uh, if you look at for a good concrete professional, I know a guy, I know one guy, I know you don’t want an empty lot that going to be empty for a while and never go into the bed of the river area over there. They said, queen cod, don’t look at it. Don’t, don’t, don’t. Don’t get his eyes on the road, eyes on the road, down the road. I straight ahead. Why is no a horse head in your bed? I don’t know. I might know some things. If you talk about things, if you talk about, I might say, I might just might find a double a multiplication of the horse heads in your bed. If you just say in maybe half a horse head and that’s why. That’s why it’s so difficult because a lot of entrepreneurs are a. When they’ve started a business and it’s a successful business, they think more of their own business than anybody else does, and that’s true. They should. They should have your business, but if you’re a guy out there, you’re thinking it’s time to sail.

Get realistic. This thing’s worth a billion dollars. It doesn’t matter what somebody thinks it’s worth. It’s what they can afford to pay. What would they afford to borrow? Actually, let me walk you through this though, but I guess I’ll give him a good example. There’s a person recently who I can think of in my life that’s, it’s a very good at building things, building, building homes, and very skilled of a Minnesota. Very skilled, very nice. They of the facts that you ice fish out of a. They do not. That’s going to Shanti, Shanti. No, but they all, they build very nice, um, luxury homes. And I remember as a young kid working for this person for a while and we’re talking about the nicest houses in Minnetonka. Minnetonka is up there. It’s a three bed, Minnesota. But see, do you remember when the economy got to a place where anybody could borrow money for anything before the recession?

Oh yeah. There was a time called Ninja or Nina loans. No income, no asset verification loans. How is that possible? And no income, no job verification. Well, what happened is the economy wasn’t growing fast enough, and so the president, Bill Clinton wanted to speed it up and he wanted, he wanted a bigger percentage of the population own homeowners. And then President Bush, he thought, well, we gotta spit it up some more. So long story short, we’re talking about zero money down, people buying zero. I’m not getting in Minnetonka. People doing jumbo loans. You’re getting two loans and they’re called a balloon loan. This is crazy, but z, if you don’t refinance into some kind of traditional financing within five years, the loan payment gets insane. Yeah, it’s the red people are building massive homes, mass in Minnetonka, Minnesota. Well, this particular person who I know very well, I went to work for them during the summers and we’re building crazy houses.

I’m talking ridiculously nice homes. I got hired. My full time job was to build a retaining wall for this particular customer. Who is her house at? Her name was judy and he had a beautiful house looking over Minnetonka in my entire job. The entire summer was to work with a guy named Joe and the bobcat guy to build a retaining wall. There’s three people are full time job was to build a retaining wall all summer. Well, you needed to retain stuff three months. This guy was an actual bobcat. Now these are three months now and she had a spire going up her house. It was unbelievable. It was like a modern day castle. Yeah. Yeah, and when it was a. It was a ninja loan or a Nina loan, no money down and she’s building this crazy home. Well now you can’t do that. Since the economic correction, it doesn’t matter how great you are at building these, like fairytale homes.

Somebody has to get a loan to be able to build this house or to be able to buy this house and so if you want to buy businesses through acquisition, you got to understand that the vast majority of the time you’re going to have to get a small business loan to buy the home and I don’t care how much you think the company’s worth. If you can’t get a bank to approve it, it’s not going to go through and see you’re an owner of a bank or an investor and of a bank and you’ve on a board of a bank.

Just in our final capstone thought, I wanted you to talk about serving on the board of a bank. How often do bank say no versus how often do they. Does the bank say yes, they say no a lot more than I want them to say. That’s our Biz. It’s like becoming. It’s almost like someone and what’s in my glasses? We look, I’m going, no, I don’t see that in your future. I don’t say no to anybody, anybody other businesses. And so it’s kind of ironic that when people come in, but it’s true, but you’ve got to, you know, and it’s a very conservative bankers and I was a very conservative, but if a banker approves the loan and the loan goes into default, that hurts the bank. Well you make such a small margin on each loan. That one bad loan can cover so many others.

The profit you make on those. So you do have another loan. You do have to be careful and I’m not talking about reckless lending, I’m talking about being careful and I know all of that, but like I always like kicking open the loan when they were in the executive loan committee. I like to open the door and just yelling. Yes. And then shutting the door box there, watching the look on their face. Like, let’s just watch it happen. Hardly constantly. Did someone say yes, just say yes. I feel like I would have said yes this month. What? The crap now. Okay. The final final thought here for you is if somebody’s on a scale of one to 10, rates are scheduled right now on a scale of one to 10, 10 is I have maximum time freedom and a three is I don’t have any time freedom at all.

Should they be focused on buying other businesses or should they be focused on fixing their own calendar? First, self evident, focused on fixed, ticketed by seven or eight. You should be focused on your own, your own business, and you need to do the moves will teach you the supermoon. Yep. Just give us a call. Just continue to contact us. We will help you, guide you through and guide you, guide you through the steps you need to do to get that up to about a seven or an eight, and at least that probably right in there, maybe even maybe even crazy to go tonight before you’re wanting to expand your tent. Expanding your tent is a wonderful thing. Don’t get me wrong, it’s. It’s a wonderful thing. It’s intense expanding your tenants.

This just. That’s good. Your cookie for the night. Do

you think about that so fast? It’s an old campaign check. It goes back. It goes back to a say. It goes back to a saying it first things first and I know so many people that are young entrepreneurs or businesses or just starting their thinking about where they’re going to go to the next office, where they’re going to go with the next busy. I’m a mover and a shaker. Yeah. I’m going to leave a legacy for my grandchild and making things happen and I’m like, Hey, first thing’s first, get this from and rocking and rolling. Do well with this. I mean, I’ll meet with someone who just opened a business conferences. If they’re talking about two or three others, I want to open. I’m like, Whoa, Whoa, whoa, Whoa, whoa. Time out time. So common. Pump the brakes, pump

the brakes, work on this, get this word needs to be, and then you can do it because they looked at me and they go, Oh, you’re a serial entrepreneur, man, you rock and roll. And I said, well, I didn’t open my second one up until 10 years into my eyes. Come on 66 minutes. Oh my God, I’m hungry. I saw right. Thrive nation. If you’re out there and you have any idea what the song Hungary eyes is all about, please email me to info. Curiously, if you from the dirty dancing soundtrack, and if you know the song hungry eyes, please feel free to email me to info at thrive time. Show thrive time show.com. Yes, and I will give you a big shout out on the show because there’s got to be a few people out there that are very familiar with the song hungry eyes. I didn’t know what it means. My eyes like pizza. So we’re good now. Thrive nation. Without any further ado, we always want to end the show with a boom. And so here we go. Three, two, one.

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