David C. Barnett
speaker
164 appearances
1 recordings
1 series
first heard Nov 2024
last heard Nov 2024
David C. Barnett’s voice in public audio — every appearance, attributed to the second.
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Appearances
Was ich gerne tue, wenn du jemals Bücher über Negotiationen gelesen hast, ist einer der Begriffe, die du herauskommst, ist BATNA, was für Best Alternative to a Negotiated Agreement heißt. And so when you're negotiating for something, you always want to have an idea of what's my BATNA. If I can't make the deal work under terms that I like, what else would I do?
So if you have a job and you're negotiating to buy a business, your BATNA may just be keeping your job, right? So you're always saying, well, today I've got savings in the bank and I have this income. If this deal doesn't work out for me, I don't Ich werde das nur behalten, richtig? Wenn du unabhängig bist, wird dein BATNA viel schlimmer, richtig? Ja.
So I'll give you an example of where this can come into play. You look at a business and the seller thinks it's worth a lot of money and the price is a little bit frothy and you look at it and you go, this is a little bit overpriced and you just ask yourself, what exactly is in here? And what would it reasonably cost me if I wanted to start this on my own?
And I see this all the time where people want, you know, these businesses are priced in multiples of cash flow. So people want these high multiples of cash flow. And I'll say to a buyer, like, if you bought all the stuff you needed to run a business like this, Und dann hast du dich umgekehrt und eine wirklich aggressive Preisverleihung gemacht.
Wie lange würde es dauern, um eine Klientel zu bauen, der so groß ist, wie dieses Unternehmen? Jetzt, können wir das für weniger Geld tun, als sie fragen? Ja. Und könntest du diese Verluste über diesen Zeitraum für weniger Geld finanzieren, als diese Person fragt? Und ich hatte einige wirklich verrückte, extreme Beispiele. Ich habe mit jemandem gesprochen, der ein Accounting-Office kaufen wollte.
accounting and bookkeeping firm. They had a lot of small business clients and this person had a background in in administration for dental offices. And so they were doing bookkeeping and in charge of this type of thing in dental offices. And they liked this particular accounting firm because they had a lot of small business clients. And I just said, listen, what about this?
What if you started your own and you wrote a letter to a thousand dentists and you said, bring your bookkeeping over to me and I'll pay you $5,000.
Now, you'd put terms on that offer. What you might say is, you might say, you have to sign up for an annual contract. And each year at the end of your contract, we're going to give you a check for $1,000. And over the first five years, you'll get this $5,000 bonus from us. Right? And you're literally, in the sales world, we call this buying business. Right?
You just go out there and you make people super ridiculous offers and you just get the volume. And I said to this person, you would be acquiring these dental offices, you'd be charging them a proper rate, but instead of buying this business, you're just going to be writing the checks to your customers. Right.
and you're going to be able to finance the acquisition of this customer pool over a five-year period by spreading these checks out over five years. And so, would it cost you less to do that than to buy this business? The answer was yes. It would cost far less to make this really aggressive offer. And that's the kind of thinking that I like to employ. A little bit of
Let's turn things on their head. Let's ask some really bizarre questions. Let's look at this from a strange point of view and just see if it makes sense. And the business in particular, the bookkeeping business, was overpriced. I mean, when I saw the deal, I knew it right away. But the person was really... trying to rationalize why they should do the deal.
And the reason they were trying to rationalize why they should do the deal is because all they saw was the potential risk of not acquiring that number of clients. But when you ask a question like, what if we just paid people to be your client, it starts to give you different avenues or angles of thought.
So this is the silver tsunami story. I call it, you know, the idea that the boomers are at this point where they own all these businesses and they're retiring. So I don't know where this idea came from. And I'm thinking it came from academia. And the one thing that makes academics different from business owners is that academics all retire at 65.
So what they do is they put this lens on the business ownership community and they say, oh, well, they must retire at 65 as well. They don't. Right. So if you own a good, profitable business and you're well organized and have systems in place and middle management in place and you can run your business.
und, weißt du, es mit sehr wenig Interaktion und vielleicht ein Teil des Jahres aus Florida verkaufen, warum würdest du das verkaufen? Weil die meisten kleinen Unternehmen verkaufen für etwa zwei bis vier Mal ihren Cashflow. Also, wenn du es mit minimaler Interaktion halten kannst, wirst du es so lange wie du kannst.
Und also sind die meisten dieser Unternehmen verkauft von Leuten in ihren 70ern, wenn sie, wenn sie es wirklich nicht mehr verkaufen können oder es wirklich nicht mehr verkaufen wollen. The other thing is that most of the businesses that are owned by Baby Boomers are not worth owning. Thank you. They don't produce enough cash flow to make them worthwhile. Okay, so that's the other thing.
The ones who are doing well and make good money, there has always been a strong market for good cash-flowing profitable businesses. And back in the great financial crisis of 2008, 2009, every good business I put up on BizBuySell got 10 to 30 or 50 inquiries. So this...
narrative that there's not enough buyers that there's businesses available at a discount is all bull it's not real at all there have always been people that want to buy good businesses and here's the thing is is the really best businesses you will never get a crack at as an outsider what do i mean well every year
Every year the people of a certain industry are getting together at their associations and their galas and their dinner parties or whatever. They all know each other. So when Mr. Smith, who owns a really great profitable business in a certain industry, decides he wants to finally sell, he knows all the players in the neighboring cities and states.
So he just starts calling those people and says, hey, would you like to grow your business by buying mine? Und der Grund, warum er das tun wird, ist, weil er keine Verkaufskommission zahlen muss. And he's talking to people who already understand the industry.
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