How to Buy a Business With No Money in 2024

Summary

This video script reveals a strategy for achieving a five-figure monthly income by acquiring 'boring businesses' using other people's money. It emphasizes the low risk and high potential of this method, supported by statistics and real-world examples. The speaker outlines four ways to finance business purchases, with a focus on seller financing as the most favorable option. The script educates viewers on how to negotiate seller financing deals, positioning them as potential solutions for business owners looking to sell, and ultimately replacing their W-2 income with a profitable business venture.

Takeaways

• 💡 The speaker suggests buying 'boring businesses' as a smart way to achieve a high monthly income with a low failure rate.
• 🏆 Successful individuals like Warren Buffett have made their wealth through similar strategies, emphasizing the importance of business acquisition.
• 🚫 The speaker dismisses popular online business models like Shopify stores, Amazon FBA, or ad agencies as not being the best path to wealth.
• 💰 The opportunity to buy businesses is abundant due to a lack of buyers and an excess of businesses for sale, creating a seller's market.
• 📈 There are four main methods to finance a business purchase: using cash, bank/SBA loans, seller financing, and outside capital raise.
• 🎓 Harvard's case study indicates that entrepreneurs who acquire businesses earn more than consultants, bankers, etc.
• 💼 Most people with a net worth above 5 million dollars own their own small business, highlighting the link between business ownership and wealth.
• 📊 Small businesses are often profitable and have been in existence for a long time, making them a less risky investment than startups.
• 🛡 The main barriers to buying a business include lack of awareness, not knowing how to find or buy a business, and financial constraints.
• 💸 The speaker shares personal experiences and examples of others who have successfully bought businesses with little to no money down.
• 📝 Seller financing is presented as the most favorable method for purchasing a business, as it can require little to no upfront cash and offers tax benefits to both parties.

Q & A

What is the main strategy discussed in the script for achieving five-figure monthly income?

The main strategy discussed is buying existing small businesses using other people's money.

Why does the speaker believe buying businesses is a better strategy than starting new ones?

The speaker believes buying businesses is better because it has a lower failure rate, allows for immediate income, and is a proven method used by many successful people, including Warren Buffett.

What are the four main ways to finance the purchase of a business mentioned in the script?

The four main ways to finance a business purchase are: using cash, obtaining an SBA loan, securing outside capital, and seller financing.

Why is seller financing the speaker's favorite method for buying a business?

Seller financing is the speaker's favorite method because it often requires little to no cash upfront, reduces risk for the buyer, offers tax benefits to the seller, and allows for flexible terms.

What are the common reasons business owners are motivated to sell their businesses, according to the script?

Business owners are often motivated to sell due to the '5 Ds': divorce, departure, disability, dissolution, and death.

How does the speaker suggest negotiating a seller-financed deal?

The speaker suggests framing the deal as a way for the seller to receive annuity payments over time, thus ensuring ongoing income for the seller while the buyer takes over operations without involving banks.

What is the Lindy effect and how does it relate to buying small businesses?

The Lindy effect is the theory that the longer something has been in existence, the more likely it is to continue. This means that a small business that has been around for many years is more likely to remain profitable compared to a new startup.

What advantages does the SBA loan offer for business buyers?

The SBA loan offers advantages like the government covering up to 90% of the purchase price, which is like 'free money,' although it involves debt and less flexibility.

What challenges do people face when trying to buy a business, as highlighted in the script?

Challenges include not knowing about the opportunity, not knowing how to find businesses to buy, not understanding the acquisition process, and concerns about financing.

What examples does the speaker provide to illustrate successful business acquisitions using little or no money down?

Examples include the speaker buying an internet business for $0 down that now makes $300,000 annually, a laundromat for $0 down that cash flows $67,000 a year, and other individuals who bought businesses with little to no upfront costs.