This Is Best Way To Buy A Business

Summary

This inspiring story follows a couple who transitioned from 9-to-5 jobs to owning a thriving med spa business, achieving seven-figure revenue in just 12 months. They bought an existing business using seller financing, sidestepping the challenges of starting from scratch. With no prior experience, they applied a strategic approach, focused on transparent pricing, building community, and optimizing operations. Despite early hurdles, including financial uncertainties and equipment issues, they scaled quickly, proving that buying a profitable business can offer a more reliable path to success than building one from the ground up.

Takeaways

• 😀 Starting a business from scratch is often harder and more expensive than buying an existing one.
• 😀 Seller financing is a viable way to acquire a business, allowing buyers to pay over time instead of upfront.
• 😀 It's crucial to match the business you buy with your passion, skills, and network for long-term success.
• 😀 Strategic partnerships and leveraging your connections can significantly boost your chances of success in business acquisitions.
• 😀 Being transparent with pricing builds trust and attracts customers who appreciate knowing the costs upfront.
• 😀 Apprenticeships or gaining experience before jumping into ownership can help overcome knowledge gaps and make you more credible as a business owner.
• 😀 By optimizing an existing business model, such as a Med Spa, you can improve operational efficiencies and profit margins.
• 😀 Financial documents like P&L statements and cash flow analysis are essential for assessing the worth of a business.
• 😀 Business deals often involve negotiating tricky terms; it's essential to stay creative and flexible to make them work.
• 😀 Businesses with established customer bases and equipment have immediate value, reducing risk and improving your chances of profitability from day one.

Q & A

Why did the couple choose to buy a business instead of starting one from scratch?

The couple realized that starting a business is harder and more expensive compared to buying an existing one. Buying a business allows you to start profitable from day one, rather than spending money upfront on equipment and waiting for clients.

How did they find the med spa business they bought?

They followed a method called 'The Perfect Fit Business,' where they looked for a business that aligned with their passion, skills, and network. The husband realized that a med spa was a great fit because his wife was a nurse practitioner, and they both had an interest in the business.

What challenges did the wife face before they could purchase the med spa?

The wife needed to gain experience as an injector but had no prior training. They solved this by cold emailing med spas and offering to work for free, ultimately finding a med spa that allowed her to shadow and gain the necessary experience.

What is seller financing, and how did it help them acquire the business?

Seller financing is when the seller agrees to finance part of the purchase price, rather than the buyer paying the full amount upfront. The couple used this strategy to acquire the med spa, with the seller financing the majority of the deal and allowing them to pay over time with a 6% interest rate.

What was the biggest issue they encountered during the buying process?

The biggest issue was that the med spa’s financial documents were incomplete, and there was no clear Profit & Loss (P&L) statement. However, they were able to reconstruct the P&L using the business’s EMR system and bank statements.

How did they solve the problem with the equipment after purchasing the med spa?

They encountered a problem with a key machine when they found out it wasn't certified, and they couldn't purchase parts for it. They reached out to other med spas for help, and were fortunate to find one that sold them the necessary parts.

How did they finance the business acquisition?

The couple used their savings to finance the business, with a large portion of the deal being covered by seller financing. They continued to work their 9-to-5 jobs for the first year to ensure the business remained financially stable.

What strategies did they use to grow the business after acquiring it?

They focused on transparency with pricing, building a community atmosphere at the new location, and providing honest advice to patients, such as under-selling services when necessary. This helped build trust and customer loyalty.

How did they handle the risk of business failure in the early stages?

They mitigated the risk by staying employed in their 9-to-5 jobs for the first year. They also focused on learning and problem-solving, such as negotiating seller financing and working with the previous owner to transition smoothly.

What are the three key lessons they learned from their business acquisition?

The three key lessons were: 1) Transparency in pricing, 2) Building a strong community around the business, and 3) Providing honest and ethical advice to customers. These strategies contributed to the rapid growth and success of the business.