Are You Ready to own your Own Business?
Summary
TLDRGordon Bizar hosts a webinar advising entrepreneurs on determining their readiness to own a business. He provides an 11-question self-assessment covering industry experience, financial preparedness, leadership skills, time commitment, and other areas. Bizar then reviews 6 critical concerns including financial analysis, legal due diligence, market research, operational review, growth potential, and value addition. He concludes by highlighting 6 essential skill sets for successfully running an acquired business: leadership, financial management, marketing/sales, operations, adaptability/problem-solving, and industry knowledge.
Takeaways
- 😀 You must evaluate if you have the experience and knowledge to succeed in the industry you want to enter
- 😊 Make sure you understand the financial commitment and risks of business ownership
- 👍 Analyze potential legal issues and ensure regulatory compliance before acquiring a business
- 🔍 Research the market, competition, industry trends and outlook thoroughly
- ⚙️ Review operational processes, systems, equipment and workforce quality
- 🚀 Consider the growth potential and how you will enhance the business’ value
- 🤔 Identify if your skills and capabilities align with the business’ needs
- 😎 Develop leadership, financial, marketing, operational and problem-solving skills
- 📈 Understand how to read financial statements to make informed decisions
- 💡 Be open to advice from mentors and build industry-specific knowledge
Q & A
What are some key things to assess when considering acquiring a business?
-Some key things to assess are your industry knowledge and experience, financial preparedness, leadership and management skills, ability to handle uncertainty and stress, problem-solving skills, vision and goals alignment with the business, time commitment required, and your exit strategy.
What are some hidden liabilities to look out for when analyzing a business's finances?
-Some hidden liabilities to look out for are unfunded or underfunded pension plans, undisclosed debts, pending lawsuits or legal disputes, and issues with compliance to regulations.
Why is it important to understand financial statements when owning a business?
-It's important to understand financial statements to effectively analyze your revenue streams, expenses, and profitability to make informed business decisions. The statements provide critical data to manage cash flow, ensure profitability, and determine areas for improvement.
What causes many business owners to hit a plateau in growth?
-Many business owners hit a plateau in growth because they struggle to delegate tasks and responsibilities. They continue trying to do too many things themselves rather than building teams and management systems.
How can you determine if a business's processes are becoming less efficient?
-Key performance indicators (KPIs) can track processes from month-to-month to detect inefficiencies. Shifts in the metrics will stand out compared to baseline goals.
Why are marketing and sales skills important for a small business owner?
-Marketing and sales are critical for small businesses to drive revenue, especially when there isn't an established sales team in place. The owner often needs to directly oversee finding new customers and closing sales.
What are some key operational expertise skills needed?
-Some key operational expertise skills are supply chain management, inventory control, quality assurance, process optimization, and being able to innovate solutions to tackle issues.
Why is adaptability important for business owners?
-Adaptability is key because the business environment changes rapidly. Being open to new ideas, adapting to market changes, making decisions under pressure, and finding creative solutions are essential.
Should you acquire a business in an industry you have no experience in?
-It's better to gain some initial industry-specific experience first rather than take on the steep learning curve of unfamiliar areas on your own in a new business.
What should you add to a business to pay down debt faster?
-Value-added offerings that boost earnings, cash flow, and growth rate allow debt to be paid down quicker while still having surplus cash for reinvesting and profit.
Outlines
🤵 Introducing today's webinar topic: assessing your readiness for business ownership
Gordon introduces the webinar topic - evaluating if you are truly prepared and qualified to own your own successful business. He will go through 11 key questions to ask yourself and provide a downloadable self-assessment checklist document.
🤵 Reviewing 6 critical leadership and management skills needed for business owners
Gordon emphasizes the importance of having strong leadership and management capabilities before acquiring a business, including motivating employees, resolving conflicts, delegating properly, and more.
🤵 Assessing your financial management skills and ability to understand financial statements
Gordon stresses the necessity of having at least basic financial management skills to run a business successfully. This includes reading financial statements, managing cash flow, tracking expenses, and making informed decisions.
🤵 Considering the time commitments and personal sacrifices often required of business owners
Gordon notes that owning a business requires long hours and significant personal sacrifice, especially in the early days. Reflect carefully on your willingness and ability to commit the required time and energy.
🤵 Evaluating your stress and uncertainty tolerance along with problem-solving abilities
Gordon emphasizes the importance of handling uncertainty and stress well, along with having strong creative problem-solving and quick decision-making abilities - all crucial for business owners.
🤵 Identifying the 6 most critical concerns to address before acquiring a business
Gordon outlines the 6 key areas that must be addressed before proceeding with a business acquisition - financial analysis, legal due diligence, market/industry analysis, operational review, growth potential and value addition.
🤵 Reviewing the 6 most essential skill sets needed to run a business after acquisition
Gordon lists the top 6 skills needed to successfully operate a newly acquired business - leadership, financial management, marketing/sales, operational expertise, adaptability and problem-solving, and industry knowledge.
🤵 Answering audience questions about affiliate programs and readiness evaluations
Gordon responds to a participant's query about affiliate programs. He emphasizes assessing your weaknesses and seeking experienced advice to become truly prepared for business ownership.
Mindmap
Keywords
💡business acquisition
💡financial management
💡leadership skills
💡operational expertise
💡problem solving skills
💡sales skills
💡scalability
💡succession planning
💡value added
💡vision
Highlights
Assess your readiness and qualifications to acquire and run a business through 11 key questions
Ensure you have the necessary industry knowledge and experience before acquiring a business
Evaluate if you are financially prepared for the investment required to acquire a business
Consider if you possess strong leadership, management, delegation and team-building skills
Assess your financial management skills including budgeting, accounting and analyzing statements
Reflect on your time commitment and willingness to make personal sacrifices as a business owner
Evaluate your stress tolerance and ability to make decisions under pressure and uncertainty
Determine if you are a self-starter who can self-motivate and have an entrepreneurial mindset
Have a clear strategic vision and goals for the business you aim to acquire or start
Be open and willing to continuously learn, adapt and evolve as the business landscape shifts
Address key concerns like financials, legal, market, operations before acquiring a business
Consider what value-added elements you can bring to increase the business's growth potential
Assess alignment of your skills, experience and vision with the business's opportunities and needs
Develop key skill sets like leadership, financial management, marketing, operations and problem-solving
Gain industry-specific knowledge and continuously learn from experts and mentors
Transcripts
good morning good evening good afternoon
whatever time it is for you wherever you
are right now and welcome to another
session of bizar financing I'm Gordon
bizar and topic for today is are you
ready to own your own business I'm
continually surprised at the number of
people who come through bizarre
financing Essentials and when I have the
opportunity to talk with them in many
cases they are not ready to own their
own business and so I want to review
that with you today because being in a
place where you're ready for the
opportunity to seize it when it comes
along is critical and and there isn't
anything that would cause you to be not
ready that can't be fixed and fixed
really quickly so here we go today and
I'm going to take you through a selfs
survey and a checklist of things to do
that will make you business ready so
when that opportunity is there for you
you can sees it with confidence and
execute it successfully I want to bring
your attention to the message in the
lower right hand corner and that's
download the document from the handout
section we wanted this to be a true
survey and checklist for you so I wanted
to have a handout that goes over the
things that I'm going to cover today so
that you have it in your hands you can
perhaps review it as we're going through
it but more importantly after our
webinar is over today is something that
you can now work through as a checklist
to make sure you're on track to be
business ready to own and operate your
own successful business all right topic
today are you qualified to own a
business of your own I'm going to go
through 11 questions to ask yourself and
then based on your own answers and you
don't have to give them to me today but
you are going to want to make note of
them for yourself because they're going
to tell you where you are in the process
of being business ready when considering
the acquisition of a business it's
crucial to ask yourself a series of
introspective questions to assess your
Readiness and qualifications this self
assessment can help you understand
whether you're well suited for the
challenge and the responsibilities that
come with acquiring and running a
business and here are 11 essential
questions to consider to ask yourself
one is do I have the necessary industry
knowledge and experience
assess your understanding of the
industry in which the business operates
so in other words if you're going to go
into a specific field you need to spend
some time with yourself and ask yourself
what do you know about this business do
you really understand the industry that
it's in and do you understand how a
business in that industry operates and
then consider whether your background
and experience align with the business's
requirements I see so many people in my
career here that are mismatched they go
into something that they know nothing
about and then they struggle and many
times fail not because they're not conf
ENT or intelligent or hardworking or any
of that it's because they start out
behind they start out where they don't
really know or understand an industry
and even though the seller may stay on
and train them the learning curve can
still be long and the experience if it
isn't there can be lethal it can
literally be lethal first question to
ask yourself second question is am I
financially prepared for this investment
it's an investment of money it's an
investment of time it's an investment of
your ego if you undertake something and
don't make it work it's a big investment
for your family it's a big investment to
go into a business you're literally
doing something life-changing so the
question you want to ask yourself are
you financially prepared for this
investment that is multifaceted in what
you're going to invest but understand
the financial implications of acquiring
a business now we cover that in many
ways here in bizar financing so you're
in the right place to learn this stuff
you also want to consider if you have
the capital required or if you can
secure financing now a lot of you are
here in bizar fin ing because you don't
have a lot of capital or you're not sure
if you can secure financing you may have
an impaired credit rating all of those
things we have techniques for but you
don't want to remove yourself from the
fact that business is about money it's
about accumulating money the more money
you have access to the better you can be
in business the more success you can
have and so all along the way you're
going to want to be looking at how do I
get more Capital into my pocket to make
my business work how do I get more
Capital into my business it's a
NeverEnding process in business and the
more you can get comfortable with your
ability to raise money to understand the
sources understand their requirements do
the things that are required to position
yourself to accomplish this frankly the
more successful you're going to be also
think about your ability to manage
Financial Risk I talk to again people
all the time they got Capital they have
the ability to get loans and financing
but they're paranoid about financial
risk putting their signature on a piece
of paper that could obligate them is
paralyzing if you're that way you got to
get past that you got to get past that
in order to be successful in the
business your ability to manage
Financial Risk to undertake it properly
but not be afraid of it when the
opportunities are there and the time
comes is again a very essential part of
your preparation to be a business owner
third question is do I possess
leadership and management skills if all
your life you have found yourselves in
positions where people were telling you
what to do and now maybe you're upset
you want to be in a business because you
don't want anybody telling you what to
do anymore but you never been in a
position of leadership or you've never
been in a position where you've had to
develop management skills then this is a
critical area that you're going to have
to address before you Walt into your
business of your own because this is
where these characteristics have to be
present in you and you might want to be
thinking about the experiences you need
to have to prepare you for business
ownership so you want to evaluate Your
Capacity to lead and manage a team this
includes your ability to motivate
employees manage resources and navigate
business challenges all of those things
you got to have a comfort factor with
them if you really want to see yourself
as prepared to own your own business
number four is how strong are my
financial management skills you're going
to be managing money that's what you do
in business and you want to consider
your ability to manage a budget
understand financial statements and make
informed decisions now I have to tell
you I talk to people who have been in
business for years 10 20 years and they
can't read a financial statement I can
also tell you these people never grew
their businesses they remain mama papa
small operations since the day they took
over the business or since the day they
started the business they never Advanced
because they didn't understand what a
financial statement tells them about
their business and how to make decisions
based on what those numbers tell you and
I tell them all the time look you got to
take an accounting course County 101 you
don't have to be an accountant you have
to have an ability to understand figures
to look at a financial statement being
able to look at it and read it in a way
that it's telling you where your weak
spots are where your strengths are where
you're underperforming all those things
are important and they can come right
out of that financial statement now
again in bizar financing Pro we have a
whole section on reading a financial
statement and we make it really simple
really basic so that everybody can
follow it understand it understand what
those numbers mean make decisions from
those numbers really important but
before you wal into the business you got
to know this stuff why because even
before you're in the business if you're
acquiring it guess what you've got to do
you've got to be able to assess the
value of what you're buying and that's
going to be in those financial
statements in their tax returns you got
to have ability to look at those and
understand what all those numbers mean
and they will scream out at you what's
right about the business and what's
wrong about the business and you've got
to be able to read that if you're going
to be in a business of your own question
number five am I prepared for the time
commitment and personal sacrifices again
I talk to people all the time who have
up till now or up till the time they
came here they've been employees and
when the 5:00 whistle blew they wanted
to go home and they didn't work
Saturdays they didn't work Sundays they
didn't take work home with them they
understood that their families came
first I still think an entrepreneur's
family may come first but you're going
to be making some serious time
commitments to a business and the
personal sacrifices that you and your
family may be asked to make need to be
understood running a business often
requires long hours and significant
personal sacrifice and it especially
requires that in the early days of your
business whether you're starting it or
whether you're requiring it you got to
get your sleeves rolled up you got to
dig in there you got to understand every
aspect of what's going on you've got to
check the things that are happening even
if you have people handling things for
you you got to be able to follow up and
supervise them and you can't let
anything slide because it's your money
on the line when you own the business
nobody else's and employees even if they
work for you even if they're good
employees it's not their money and they
don't perceive things they don't handle
things quite the same as you want them
handled and as you would handle them and
until you get great people working for
you and until you have great systems in
your business you're going to be
spending a significant amount of time
handling those areas where only the
person whose money is at risk whose
business is at risk will pay that level
of attention and reflect on your
willingness and ability to commit the
necessary time and energy if you're
saying to yourself oh look I love
football I love sailing I love skiing
that's where I'm spending my time on the
golf course guess what you're not ready
to own a business because your time has
to be committed to the building of that
business especially in the early days
can I handle stress and uncertainty this
is important because business ownership
can be unpredictable and stressful
that's the nature of business no matter
how big you get it's always going to be
true and even when you're big and you
have teams of people working for you and
you're successful and rolling this is
unpredictable you don't know what the
competition is going to come up with you
don't know when something's going to
happen to your supply chain and all of a
sudden you're virtually out of business
because you can't get your product or
the parts to manufacture the rest of
your inventory of final products and so
it's stressful and access your ability
to cope with uncertainty and make
decisions Under Pressure some people get
paralyzed when they're under pressure
they can't make a decision and they
vacillate and they go back and forth and
they flip and they flop can't do that if
you're going to run a business you've
got to be able to get your arms around a
problem cope with the uncertainty
understand you'll make wrong decisions
and you'll fix them as soon as you see
that they're wrong and you got to be
able to make the decisions Under
Pressure you can't go home and have a a
hot drink okay you got to be able to
just simply be on it deal with it
question number seven is do I have
effective problem solving and
decisionmaking skills you'll know that
because you've done things in the past
that show you have that that you're a
good Problem Solver you see what's wrong
very quickly you're Innovative and how
do you come up with a a solution you'll
try some things if they don't work
you'll retry something a little
different and you'll keep working it
until you solve it and then having the
decision-making skills to actually make
that decision and make it in a way
that's flexible but yet assertive enough
that it has a chance to succeed but
being willing to change if it doesn't
consider your ability to analyze
situations solve problems and make
strategic decisions all right question
number eight am I adaptable and willing
to learn now I'm an old guy I joke
around about that but I've been in
business for 55 years plus so I'm at an
age where people are supposed to be
fixed in their ways they're supposed to
be not very malleable I have to tell you
I am and I remain adaptable and willing
to learn that a day goes by in my life
that I'm not willing to learn something
new in fact seek out things new to learn
because the economy changes the
marketplace changes people change rules
and regulations change technology
changes everything you do today is
changing so fast that if you aren't
adaptable and willing to learn
constantly then you're going to get left
behind in that business and so adopting
that attitude towards life that I'm
adaptable and willing to learn and I
never think I know so much that I
nothing more for me to learn can't be in
that place the business environment is
constantly changing and so reflect on
your willingness to adapt learn new
skills and evolve with the business
because your business is among the
things that will be changing the way it
works who's employed there who your
suppliers are who your customers are
everything's going to be changing
everything constantly and you've got to
be able to flow with that number nine do
I have a clear vision and goals for the
business without Vision the people
perish and it's also true about
businesses you need to have a Clear
Vision for what you want this business
to be what you see its end products are
what is the goals for that business what
your mission is you should have a vision
statement and a mission statement for
your business so that they're clear and
you can communicate it to other people
and so if you're just stretching along
looking for a business and you find the
business and you just let it go where it
was going and you just try and manage
little parts and pieces of it here
thinking you can fix this fix that it's
not the way to be successful in a
business you have to have a clear vision
of where you want the business to go a
Clear Vision that's consistent with
what's going on in this great world
that's around your business and how that
world impacts your business and how your
business impacts the world and where it
is that you want that business to go and
then you got to break that down into
goals that are reasonably achievable
that you can monitor and track and make
sure that you're on track for the
achievement of your vision think about
your strategic vision for the business
and whether you can align this Vision
with your personal goals and values
that's why so important picking the
right business because business has to
be one that fits your vision and how you
see yourself manifesting your goals in
life through your business so if you're
going to be business ready you really
want to have a strategic vision for that
business and you want to be able to
align it with your personal goals and
values number 10 is am I a self-starter
again I talk to a lot of people who have
come through bizarre financing for years
remember we started this first one of
these in 1980 so it's been a long time
and I have a chance to interview people
and to find out who's successful and
who's not and it comes down to are you a
self-starter and that's a question that
you want to ask yourself no one will be
managing you or supplying you with the
pathway forward it's you have to start
yourself you have to be the motivator
and you may often find yourself in a sea
of uncertainty where you and you alone
must discipline and motivate yourself
nobody is going to give you a poke in
the butt and say get out there and do it
okay when you're into business for
yourself you are the poker you are not a
pokey and so if you look at yourself and
be honest with yourself you got to be a
self-starter you got to be
self-motivated you got to be disciplined
because nobody else is there to impose
those things on you when you're an
employee you got supervisors you got
managers you got Executives you got a
board of directors you got people who
will down a line of command a chain of
command enforce discipline and Supply
motivation you don't have that it's you
you got to have it for yourself and
lastly number 11 for the questions that
you should ask yourself is what is my
exit strategy now are we getting in
front of ourselves here we're looking at
the end and we're not even at the
beginning and the answer is yes okay
because the idea of a business is you're
going to build it and what are you going
to build it towards what you build it
towards depends on how you see yourself
exiting the business are you going to
have a succession plan and pass it on to
your kids are you going to have a
succession plan that allows your key
Executives to take it over and buy it
from you are you going to want to just
sell it in the marketplace are you going
to to take it public in other words
what's your exit strategy with this
business because the day you walk in
that door you have to be building that
business to optimize it at your exit
that's your strategy and if you don't do
that you're going to be wasting years
building a business in the wrong
direction as opposed to having it be
what you need it to be at the time that
you're ready to exit the business so
it's important to consider not just how
you enter into the business ownership
but also how you might exit or
transition out of it in the future now
these 11 questions are questions that
you should spend a considerable amount
of time with with after this webinar is
over and you want to sit in a quiet
place and you want to ask yourself these
questions and if you sit at your
computer or you have a pad and pencil or
a pen in your hand you want to make
notes you want to see how you answer
these questions and then a week or two
from now you want to revisit them and
say is this really the way I feel is
this really the answer for me is this
something that I can change is this
something I'm willing to do differently
that's the purpose of these questions
because they will position you they will
position you to be a great business
owner you come up with the right answers
be will willing to seek advice from
experienced entrepreneurs mentors or
business advisers the reason that this
is important is no matter how successful
you ever are in your business there'll
always be people who know more than you
do there'll always be people who have
had more experience or had a different
set of experiences that gave them
different lenses that enable them to see
things differently than you do and by
understanding how they see it their lens
their experience and their advice advice
can be gold to you because their eyes
that you didn't didn't have their ears
that you didn't have their experiences
that you didn't have the opportunity to
go through all of which can contribute
Great Value to the building of your
business so be willing to seek advice
they can provide valuable insights and
help you make more informed decisions
none of us know everything and when we
think we do that's the beginning of
failure all right you never know
everything you want to surround yourself
with people who are smarter than you are
people who have done more than you've
done people who have had experiences you
haven't had the time to have and you
want to benefit from the insights that
they can give you okay now we're going
to shift gears a little bit your sixth
most critical concerns to address before
acquiring your business if you don't
address these six concerns you're
limiting your ability to get into the
business or succeed with it afterwards
so let's take a look at them and see how
it is that we can address those critical
concerns in a way that's meaningful for
us and our businesses acquiring a small
business is a significant decision and
it's crucial to address several key
concerns before proceeding and here are
the six most critical areas to consider
one financial analysis this involves a
thorough review of a business's
financial statements including profit
and loss statements balance sheets and
cash flow statements so if you're saying
to yourself I'm not a good numbers
person I am not good in math I don't
understand financial statements they are
Greek to me then you're not alone for
one thing that's true of a lot of people
but you need a rudimentary understanding
of the financial aspects of a business
and if you take a course called
accounting one you're not going to be in
accountant which you'll understand the
stuff basically you'll know a debit from
a credit you'll know what the p&l
actually tells you the profit and loss
you'll know how to understand income
you'll know how to understand expenses
if you're smart you'll also pay
attention when they talk about certain
financial ratios and again we have a
very thorough section on this in Pro
because it is so essential otherwise you
have no way to really understand the
intricacies of your business and what
contributes to its success and what
doesn't it's all broken down into
Financial numbers on these statements is
the very hard part and basis of a
business and in order to understand what
your business is doing good bad or ugly
you've got to understand at least the
rudimentary aspects of financial
statements understand the revenue
streams expenses and profitability where
do they come from how do they manifest
through your business remember you're
going to be looking at a company now to
buy so you got to be able to look at
those financial statements and see
what's working right in the business and
what isn't otherwise you're buying a pig
up poke as they say you got a big bag
that's surrounding this company and if
you don't have the ability to open up
the bag and see what's in the bag you
may not like what's in the bag once you
own it right so it's really important to
do this and you want to check for any
hidden liabilities or debts sometimes
people say they're hidden how do I find
them right how do I find them there are
tests that an accountant can do based on
certain invoices and check ledgers they
can go in and do a search to see where
evidence pops up that there is this
liability but it's not showing up on the
books anywhere so there is ways to do
that and you don't want to go into a
business blind do you want somebody on
your side who knows how to just do a
quick check to see if this company has
hidden liabilities or debts one of of
them is in the pension plans of some of
these companies they have what are
called unfunded pension plans or not
fully funded pension plans so it shows
that they have these employees they have
all of this money put away in a plan for
when they retire the problem is it isn't
enough to provide what the plan calls
for so when the person retires the
company has to pull from its then
earnings to pay off some of that
retirement so if that's true you're
buying a company where you're going to
be the one who owns it at the time that
it has to pay for that portion of the
employees retirement they're gone
they're not contributing to your
business but now it's you not the old
owner who's playing for the employees
pension that motivated that employee at
the time the old owner owned the
business not you all really important
stuff so you're going to check for
hidden liabilities and debts and it's
often wise to involve a financial
advisor or an accountant to help you
with this because you're not supposed to
be an accountant but you need to know
that there are these pitfalls here that
you need some professional help
sometimes to watch out for you the next
critical concern is legal due diligence
examine any legal concerns associated
with the business this includes
reviewing contracts leases and
agreements with suppliers and customers
also includes any employment contracts
the list goes on and on so again you
want to have a legal professional who's
available to you especially for your
first purchase now even today I hire
lawyers to help me with an acquisition
but I've been through so many of them
that I don't need to hire them on day
one in fact I draft most of the
agreements myself there are things that
I undertake for due diligence and review
but at the end of the day after after
I've drafted the agreement I'll still
send it to my attorney and I'll say to
sprinkle holy water on this and what
that means to them is we don't want them
to write the agreement we're not going
to pay them to write the agreement we're
going to pay them just to make sure that
we haven't overlooked something silly
that we should have caught or that maybe
there's been a change in a rule or a
regulation or a tax or something like
that that only somebody who does it
every day would know that changed and so
that's why we do that but after a while
you'll have less and less Reliance on
legal professionals but on the first one
or two you're going to be paying for the
education okay you're going to pay them
but you're going to learn you're going
to see what goes into the agreement
you're going to have these agreements in
your file cabinets or on your computer
when it comes time to write an agreement
you literally take it use it as a
template you write it yourself and then
you just send it to your attorney saying
sprinkle some holy water on this you can
do that once you've been through two or
three of these ensure there are no
pending lawsuits or legal disputes now
attorneys do searches for that they have
the software and the S Services that
enable them to go in and search for any
of these types of things that you would
have difficulty doing without those kind
of services
compliance with local state and federal
regulations is also crucial you don't
know that the business isn't for sale
because the city just put through a new
zoning ordinance that now puts this
business out of business because it
can't stay there any longer it can't
conduct that kind of business in that
environment any longer so you got to
know all that stuff so you're going to
have to get a little professional help
here but the point is legal due
diligence without it you could be buying
a disaster and that's the reality of it
consider Consulting a lawyer with
experience in business Acquisitions
because it's only somebody who's done
business acquisition it's really going
to be aligned with the right information
that you're going to need okay critical
concern number three is a market and
Industry analysis understand the market
in which the business operates analyze
the competition market trends and the
overall health of the industry they're
critical to the future of your business
you don't want to go in where the
competition is going to clean your clock
or where market trends are heading in
the wrong direction or where the overall
health of the industry is in serious
decline you don't want to do that so a
little bit of research work and Analysis
there is going to be really important
and it's important to assess whether the
market is growing stable or in Decline
and how the business fits into the
broader industry landscape so you're
going to want to know all this so that
you can acquire the company with
confidence and if you own a business you
want to go through the same evaluation
because do you want to continue to owe
this business or maybe it's time to get
out maybe it's time to sell it to
somebody else and research a different
business to go into that's healthier and
then number four is an operational
review look into the business's
operational aspects including the
efficiency of process processes the
condition of equipment Inventory
management and the quality of the
workforce what kind of employees do they
got are they drug addicts or are they a
serious Workforce with high levels of
training and education high levels of
commitment loyal workers who've been
there for a long or a reasonable amount
of time that they're committed to the
company that the company's probably
treated them right along the way so that
there's a mutual affection of the
company for them and them for the
company an operational review how does
this company function do they produce
quality product do they have a high
return rate because they don't how to
manufacture correctly or they don't
package well so things break there words
what's going on with the company truly
you want to understand all of its
aspects and assess the business's
location infrastructure and Technology
systems today every business has a
technology system of some kind and
you've got to understand it you got to
know it works you got to know they're
operating reasonably at the
state-of-the-art they don't need the
state-of-the-art but they don't want to
be too far behind either and if they are
then you've got to have as part of your
plan how you going to fix that what are
you going to do don't overlook the fact
that if you're going to change change
the technology systems you have this
thing called behavior modification which
is very difficult in adults everybody
wants to do things the way they've
always done them you don't want to be
the person that goes into the business
says I know how to do this with today's
modern technology and new processes and
all these things can be different and I
can take this struggling barely growing
business and I can turn it into a
rapidly increasing state-of-the-art
company to be the Envy of the industry
and the reason that you can't do that or
you certainly can't do it easily and you
can't do it inexpensively is because
everybody you got working there does it
the way they do it now they love the way
they do it now they don't want to change
and they will resist that change that
resistance can mean that you can go
literally years and still not have your
new technology new processes implemented
and all along the way you got people
sabotaging you because they don't want
to change it's the human nature folks
it's out there it's what you have to
deal with operational strengths and
weaknesses can significantly impact the
future success of the business all right
you got to know what they are you got to
be realistic about anything that needs
to change you got to be realistic about
your ability to change them but you got
to know how they do it you got to know
how it needs to change you got to be
able to evaluate that number five future
growth and scalability you don't want to
buy a business that just stays the way
you bought it you got to grow it which
means there's got to be scalability
within that business consider the
potential for future growth and
scalability this involves evaluating the
business models viability in the long
term potential areas for expansion and
the capability of the business to scale
up operations so if they're still doing
things with pens and paper and in order
to triple and quadruple your volume it's
got to go digital you got to know that
you got to understand that you got to
know what you can do in that business
and what you can't so if you're going to
buy a business unless you want to run it
the same 10 years from now as it's
running right now and have the business
never grow or never produce anything you
really got to look at this element this
concern this critical concern for what's
the future growth and scalability of
this business also consider your own
vision for the business and whether it
aligns with its current trajectory maybe
you're buying a company and it's growing
five or 10% per year and there's nothing
wrong with that they don't have staff
there they don't have people there they
don't have a Marketplace there that
aligns with your vision to double and
triple your sales year after year after
year okay so you got to make sure that
there's an alignment with your
expectations and what the business
itself and the industry itself is
capable of there's got to be an
alignment all right and number six this
is the one to me that's probably the
most important I shouldn't say that it's
just very important very important and
it's value added and what this means
essentially is asking yourself the
question of what are you going to add to
the business that will increase earnings
cash flow and the rate of growth because
that's where value is in the business
okay but it only happens if you add
value so if you're buying a business and
it's on a trajectory of 5% growth per
year that's all you're going to get when
you own the business unless you do
something dramatic to add a new product
to add a new service to change a process
to do something that adds value to that
business so that when you own it it's
capable of increasing its earnings
beyond what the old owner was able to do
increasing its cash flow beyond what the
old owner was willing to do and creating
a steeper incline in its rate of growth
so it's going to grow FAS faster and
more dynamically than the old business
and it's because you added something to
that business and before you buy that
company exactly what it is that you're
going to add and exactly what that
addition is going to do to earnings cash
flow in rate of growth if you are using
financial leverage other words you're
going to borrow a lot of money to buy
the business which is part of bizar
financing we find ways to leverage all
this financing that we need to acquire
your business and if you paid a fair
market price for the business all of the
existing cash flow that comes with the
business now will be consumed Debt
Service it's an axiom okay you take the
business you paid fair price for it you
borrowed all the money to pay for it
none of it was yours now where does that
cash flow in that business go every
penny of it is going to go to pay off
your debt service it's by definition if
you paid market price and you're
borrowing at Market rates then every
dollar you earn is going to go into
paying off that debt that doesn't do you
any good now you have no cash left over
to grow you have no cash left over for
you to have a nice life and you're going
to spend five to seven years in the
business advertising debt you don't want
to do that so you're going to have to
add something when you own the business
that means your business is now worth
way more after you own it because of
what you've done the additions you've
made the things you brought to that
company that make it a more viable
company that increased the cash flow and
now that increase in cash flow the
increase in earnings the faster rate
growth enables you to pay down that debt
faster and as a result of paying it down
faster is also Surplus cash that's left
over for growth and for you to put in
your pocket and go to Hawaii with or
wherever it is you like to vacation so
adding value very important so added
earnings cash flowed growth rate are
essential for your business to succeed
because you're going to leverage but now
you got to add something in order to
make that leverage really pay so value
added very important concern know how
you're going to do it before you sign on
the dotted line to buy the company
understand your goals and capabilities
in running the business assess whether
your skills experience and resources
align with the needs of the business and
remember acquiring a business is not
just about its current state but also
about its potential and how well it fits
with your objectives and capabilities
much bigger process than just just say
oh it's a good business that's made
money in the past that's not enough
let's talk a little bit about the six
most important skill sets needed to run
your business after acquisition you need
certain skill sets if you're going to be
successful running the business so you
don't want to buy the business and then
sit there and say oh my gosh I don't
know how to do this I don't have the
skill sets to do this I better go back
to school you know want do that all
right so six most important skill sets
needed to run your business after
acquisition so you're going to focus on
how do you make sure you have these six
important skill sets so that when you're
in your business you're Rip Roar and
ready to go successfully running a small
business after acquisition requires a
diverse set of skills and here are six
of the most important skill sets one is
leadership and management skills
effective leadership is crucial this
includes the ability to inspire and
motivate employees set a Clear Vision
and make strategic decisions those are
skill sets you need to have you need to
be comfortable with them management
skills are equally important for
organizing planning and overseeing
business operations all right remember
you're in a business it's not just you
you got all these people that are
working for you you're going to have
teams dedicated to certain functions
they have to be inspired motivated they
have to have a clear vision and then you
have to make strategic decisions make
the decision and you enforce those
decisions because if you don't the
employees will do what they want to do
and that's not where you want to go
being able to delegate tasks manage a
team and resolve conflicts is key one of
the single biggest reasons that people
who go into a business whether they
start or buy they get to what's called a
plateau and they can't get any further
okay no matter what they do the business
won't grow it's a plateau year after
year the business is stagnating it might
be making money but it's stagnant and
the single biggest reason is the
remember an owner is a doer right
they're really good at doing stuff
that's how they got into business in the
first place and they will give a task to
an employee the employee will screw it
up they'll take it back and continue to
do it themselves can't do that can't
grow that way you've got to develop a
skill set that enables you to delegate a
task monitor the performance of what's
Happening educate and instruct so that
the person understands how to do it how
to do it well and that there's a
supervision process that makes sure that
they do it well and then after a while
what will happen is that employee will
get so good at doing it they'll do it
better than you did but it's got to be a
process it's got to be an ability to
delegate and then manage a team of
people orchestrate between the team
members as to what needs to happen
you've got good team leaders then you
don't have to do too much of that but
you won't get good team leaders until
you yourself have been a good team
leader and you understand what goes into
it and that you're able to resolve
conflicts quickly because if you got
people butt in heads about how
something's going to get done you want
to be able to resolve that conflict
before it becomes counterproductive all
right leadership and management skills
crucial growing a business okay so this
is an important skill set you got to
work on it you got to develop it
financial management a solid
understanding of financial management is
essential this includes budgeting
financial planning accounting and
understanding financial statements so
this isn't the first time today you've
heard this right so it's really
important that you have a background in
this stuff you have a comfort level with
it you may have an employee who is more
of an accounting type than you are and
they run these numbers and they do these
things but you have to understand them
you have to be able to interact with
that employee to ask the right questions
and to make sure that they're
undertaking it in a way that's going to
get you the results that you're looking
for you should be able to analyze
financial data to make informed
decisions manage cash flow effectively
and ensure the business remains
profitable I can't tell you how many
people don't know how to read financial
statements don't understand the numbers
they're doing something and months go by
when something has changed and all of a
sudden the business is losing money and
they don't know why they don't know what
costs went up they don't what process
slowed down they don't know because they
don't have a way to track it without the
numbers you don't know now there are
some things maybe that might be obvious
and you can fix those things without
understanding the numbers but at the end
of the day your business is multifaceted
it's got so many moving parts to it that
unless you have good track numbers
unless you have what are called key
performance indicators kpis that track
different processes in the business and
in month-to month you can see when those
kpis are shifting and you know by the
shift in that kpi that this is less
efficient than it's always been or it's
not meeting the efficiency goal that you
set for it for the next month if you
don't have that you're trying to run the
business blind it's like flying by the
seat of your pants it's like getting in
the cockpit of a plane and saying I
don't know what all these instruments
tell me so I'm just going to fly by
field all right that's not the pilot I
want taking me in my plane that's not
the way that the business should work
financial management you got to sit in
that driver's seat and understand it the
next area that you need to have a skill
set in especially in a small business is
marketing and sales skills and
understanding how to Market your product
or service effectively and drive sales
is critical now in a small business it's
hard retire good salespeople and if you
don't know how to sell your product and
you aren't the one who gets out on the
road and makes things happen with new
customers new sales new introductory
offers that get people wanting to buy
your prod if you don't how to do all
that you're in Deep D my friend okay and
the reason is that unless you're buying
a company that's got a great sales team
you're the only one who's going to be
able to get in there and do that and if
you don't have that skill you shouldn't
buy that company because I can't tell
you again how many people buy companies
they're not good in sales they're good
in process so they work in the business
they improve all the processes and the
company's getting more efficient and
everything's going well they're not
selling anything all right so all of a
sudden the company's income is slowing
down and it becomes non-existent and
they go out of business and they had
great processes they had a great product
everything was wonderful they couldn't
sell okay you need those skills and even
if you got a partner who has the skills
that at least gets the skills into your
business but somebody in that business
better be really good at marketing and
sales and this includes knowledge of
digital marketing market research
customer relationship management and
sales strategies all important be able
to identify and Target the Right
audience develop compelling marketing
campaigns and close sales are vital
components okay all of these things are
important number four operational
expertise operational expertise this
involves understanding the day-to-day
operations of the business what does it
do how does it do it who does it what's
the supply chain look like skills in
Supply Chain management inventory
control quality assurance and process
optimization are important okay because
your business has to be efficient
otherwise your competitors will clean
your clock these have to be things you
have your arms around and that you have
the ability to look at things and see
when they're not working right and read
numbers and let the numbers tell you
when things aren't working right and
then be Innovative that through both
experience and insight being able to
innovate Solutions all of which are
built around operational expertise
efficiently managing the operation
ensures the business can deliver its
products or Services effectively while
maintaining cost Effectiveness that's at
the heart of your business operational
expertise all right number five
adaptability and problem solving skills
the business environment is dynamic and
being adaptable is key to survival and
growth and this includes being open to
new ideas adapting to Market changes and
being Innovative strong problem solving
skills are necessary to tackle
challenges make critical decisions under
pressure and find Creative Solutions to
various issues to me this is what makes
running a business so thrilling because
I love this stuff I wake up in the
morning and I love to solve problems and
I love to tackle challenges that I love
to make critical decisions see what
happens change if I have to find
Creative Solutions to various issues if
you don't like that stuff and you're not
good at it you might want to look at how
can you shift your attitude a little bit
how can you adapt to having this more
present in the way you approach things
but adaptability and problem solving
skills crucial to building a business
and the last of these is industry
specific knowledge again I talk to a lot
of people who go into a business and
sometimes they'll tell me look I'm fed
up with the industry I'm in I don't want
to ever see this type of business
business or industry again I want to go
into something totally new you can do
that but now you got a learning curve
okay and you shouldn't do it where the
learning curve is in your own business
you should take that learning curve by
going to work for somebody else who has
that type of business and let the
learning curve happen there instead of
happening when you own a business and
now you hav a clue what to do in certain
situations so going into a business you
should go there with a certain amount of
Industry specific knowledge before you
buy that company or start that business
for that matter in addition to these
skills it's also important to have
industry specific knowledge related to
the businesses you're acquiring it's
important understanding the nuances of
the industry can greatly enhance your
ability to make informed decisions and
succeed in your Venture continuous
learning and being open to seeking
advice from mentors or industry experts
can also be extremely beneficial this is
the second time you've seen this okay
mentors industry experts can be
tremendously beneficial but if you have
a learning curve to learn in Industry
you want to equip yourself to learn it
quickly to learn it with a mentor to
learn it with a guide to learn it with a
partner but you've got to have this
because if you don't there are people
who are competitors in your industry
that have been doing it for a very long
time they've succeeded because they've
done it well and they will eat your
lunch if you don't have a minimum amount
of Industry specific knowledge so much
for the six most important skill sets
let's take a look at the questions that
you might have having been through all
of this are you ready to have your own
business any questions let's start with
the written one here do you have an
affiliate program I have a distribution
network available derell send me an
email to question at bizar financing yes
we do have an affiliate program I have
pride of authorship here but I really do
believe that our bizarre financing is
one of the best business success courses
in existence our success rates and
people taking our programs are very high
please get in touch with me derella
happy to talk to you about that
hopefully the information that we shared
with you is valuable in terms of getting
yourself ready and positioned to be a
great business owner so that when your
opportunity comes you're going to be
Stellar thank you for being here I look
forward to seeing you on the next ones
that we do which are the fourth
Wednesday of the month so that's for
Essentials and if you're Pro and you're
here remember we have a pro webinar also
on the second Wednesday of each month
looking forward to seeing you all then
until then I wish you all the best of
success
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