Are You Ready to own your Own Business?

Summary

Gordon 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

00:00

🤵 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.

05:00

🤵 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.

10:01

🤵 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.

15:02

🤵 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.

20:02

🤵 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.

25:03

🤵 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.

30:03

🤵 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.

35:04

🤵 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.

Keywords

💡business acquisition

The process of purchasing an existing business. The video discusses assessing your readiness to acquire a business, key concerns to address before acquisition, and necessary skillsets to run the business after acquisition. Examples of discussing business acquisition include the sections 'are you qualified to own a business' and 'six most critical concerns to address before acquiring your business'.

💡financial management

The ability to manage budgets, understand financial statements, and make informed business decisions based on financial data. The video emphasizes financial management as an essential skill, stating business owners need to "analyze financial data to make informed decisions, manage cash flow effectively, and ensure the business remains profitable."

💡leadership skills

Skills to effectively lead teams and organizations. This includes inspiring employees, setting a vision, making strategic decisions, planning, and overseeing operations. The video lists leadership and management skills as one of the "six most important skill sets needed to run your business after acquisition".

💡operational expertise

Deep knowledge of a business's day-to-day operations including supply chain, inventory, quality assurance and process optimization. The video emphasizes the importance of operational expertise to run a business efficiently and compete successfully.

💡problem solving skills

The ability to creatively solve problems and tackle challenges. The video states problem solving skills allow business owners to "make critical decisions under pressure and find creative solutions to various issues" within a dynamic business environment.

💡sales skills

Skills in marketing, driving sales, identifying target audiences and developing compelling offers. The video states understanding sales and marketing is "critical" even for small businesses, as driving revenue growth is essential.

💡scalability

The ability of a business to scale up operations and grow over time. Assessing scalability is called a "critical concern" when evaluating a business to acquire, to ensure alignment with growth objectives.

💡succession planning

A strategy for transitioning ownership and leadership of a business. The video poses "what is my exit strategy" as an important self-assessment question and discusses options like passing the business to children or selling it.

💡value added

Increasing a business's earnings, cash flow and growth rate by improving operations, products/services after acquisition. The video emphasizes the importance of having a value-add strategy before acquisition to transform and enhance performance.

💡vision

Having clarity on where you want to take the business in the future. The video discusses aligning your "strategic vision" to your goals and planning business growth intentionally based on that 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