In this episode, Charles explores the intricate landscape of business acquisitions with David C. Barnett, a seasoned expert who's mastered the art of transforming undervalued companies into profitable powerhouses. David demystifies the process of buying businesses, providing a roadmap for entrepreneurs to spot and capitalize on hidden opportunities. David's journey from financial broker to acquisition guru showcases the power of strategic analysis and hands-on experience. He unpacks his professional evolution, highlighting how his unique "problem-solving" approach has helped countless buyers unearth diamonds in the rough. The conversation between Charles and David is a no-nonsense deep dive into the core elements of successful business acquisition: accurate valuation, comprehensive vetting, innovative deal creation, and effective transition management. They explore the counterintuitive strategy of seeking out businesses with fixable issues, the art of crafting mutually beneficial deals, and the critical importance of industry-specific insights in today's diverse market. David offers a treasure trove of practical advice, detailing his proven methodologies from reinterpreting financial data to his revolutionary "fixer-upper" business selection principle. He challenges traditional entrepreneurial wisdom, making a compelling case for acquiring existing businesses over starting from scratch. KEY TAKEAWAYS: • Grasp David's "fixer-upper" strategy for identifying businesses with untapped growth potential • Recognize the critical role of thorough investigation in sidestepping costly acquisition pitfalls • Explore innovative deal structures that can align buyer and seller interests • Appreciate the value of sector-specific expertise in making smart acquisition choices • Learn techniques for revitalizing struggling businesses, turning challenges into profitable opportunities Head over to podcast.iamcharlesschwartz.com to download your exclusive companion guide, designed to guide you step-by-step in implementing the strategies revealed in this episode. KEY POINTS: 4:55 Business acquisition model: David outlines his unique approach to buying and selling businesses. 9:08 Small business challenges: The conversation delves into common obstacles faced by small business owners. 12:21 Buying vs. starting: A comparison is drawn between purchasing an existing business and starting from scratch. 15:01 Negotiation strategies: The podcast explores effective tactics for negotiating business deals. 17:53 Aggressive offers: David shares insights on making bold proposals in business acquisitions. 20:54 Silver tsunami story: The discussion turns to the myth of the "silver tsunami" in business ownership transfer. 24:03 Insider knowledge importance: Emphasis is placed on the value of industry-specific expertise in acquisitions. 27:22 Operating capital impact: This segment highlights how operating capital affects business valuation. 29:11 Importance of analysis: The conversation stresses the crucial role of thorough analysis in business buying. 34:21 Avoid Instagram trends: Listeners are cautioned against following popular but potentially misleading business trends. 36:33 Visibility in business: David explains the significance of making oneself visible as a potential business buyer. 39:10 Networking strategies: Effective networking techniques for finding business opportunities are discussed. 42:44 Starting a business: The podcast offers advice on the initial steps of launching a new business. 45:47 Networking for business: Further strategies for leveraging personal networks in business are explored. 49:31 Importance of systems: The discussion emphasizes the value of systematic approaches in business operations. 52:27 Selling your business: Tips are provided on preparing a business for sale to maximize its value. 54:52 Managing inventory: The conversation covers effective inventory management strategies. 58:10 Operating manual importance: David stresses the significance of having a comprehensive operating manual for your business. 1:00:01 Seller financing advice: The episode concludes with insights on the benefits of seller financing in business acquisitions.
Chapter 1: What is the main topic of this episode?
Chapter 2: What is David's unique approach to business acquisition?
Jetzt 50% auf Ihren Business-Kabel-Internettarif sparen. Im Shop oder auf vodafone.de slash business. Willkommen bei der I Am Charles Schwartz Show. Heute gehen wir tief in die Welt der Geschäftsverkaufs mit David C. Barnett, einem Maverick, der die Art der Verkaufs- und Verkaufsverkaufs in eine Wissenschaft verändert hat.
David's journey from business finance broker to acquisition guru is a masterclass in spotting hidden gems in the rough and tumble world of entrepreneurship. In this episode, David unveils the secrets that have helped him successfully broker over three dozen business deals.
From his innovative, equally unhappy negotiation strategy to the game-changing, hair-on-it business selection principle, he's about to revolutionize your approach to business acquisition. David's insights could be the catalyst your entrepreneurial journey has been waiting for. The show starts now.
Welcome to the I Am Charles Schwartz Show, where we don't just discuss success, we show you how to create it. On every episode we uncover the strategies and tactics that turn everyday entrepreneurs into unstoppable powerhouses in their businesses and their lives. Whether your goal is to transform your life or hit that elusive 7, 8 or 9 figure mark, we've got the blueprint to get you there.
The show starts now. Charles, thanks for the invite. I love to come and talk with people like this.
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Chapter 3: What challenges do small business owners face?
I'm looking forward to it.
Do me a favor, get the audience a little up to date on who you are and what you do if they don't know you very well.
Ja, sicher. Ich bin ein lebendiger Entrepreneur. Ich habe Unternehmen gekauft, verkauft und geschlossen. Ich leite heute ein Unternehmen. Ich habe das Gute, das Schlechte und das Schlechte gesehen. Ich war einmal ein Geschäfts- und Finanzverkäufer. Ich habe Menschen mit verschiedenen Arten von Geschäftslohnen geholfen, was mich in die Welt des Geschäftsverkäufers geführt hat.
Chapter 4: Should you buy a business or start one from scratch?
Ich helfe Menschen, die Unternehmen kaufen und verkaufen. Ich war glücklich genug, in das Unternehmen zu kommen, gerade auf dem Kurs der großen Finanzkrise im Jahr 2008-2009. Und ich habe das für etwa dreieinhalb Jahre gemacht. Ich habe ein bisschen über drei Tausend Unternehmen für andere Leute verkauft.
Und dann habe ich diese Industrie verlassen, weil Business Brokerage als Unternehmen sehr schmerzhaft sein kann. Es ist für den meisten Teil ein Kontingenzrevenue-Modell. Das bedeutet, dass Business Brokers bezahlt werden, wenn sie ein Unternehmen für jemanden verkaufen.
Und so kannst du ein Jahr oder mehr mit einem Geschäftsführer sprechen, bevor sie entscheiden, ihr Unternehmen für Verkauf zu listen. Es kann dann Monate dauern, um es bereit für Verkauf zu bekommen. So to get all the documentation organized, the packages put together, etc.
Chapter 5: What are effective negotiation strategies for business deals?
And then it can actually take years, depending on the type of business it is, to really find a buyer, the right buyer, who wants to do a deal and then help the buyer organize everything they need with respect to financing and all that kind of stuff as well. So it's a very long process. There's plenty of places where deals fall off the tracks. And so it was frustrating for me.
all kinds of stories of of deals that i worked on for a long time that never came to fruition i eventually left that business got into banking and i was a banker for a few years and and uh you know just like those old gangster movies uh they kept pulling me back in i kept getting phone calls from people who were trying to work on small business deals looking for help and started to do a little bit of consulting as a side hustle and then when the bank reorganized there was an opportunity for me
um vollständig in die Welt von kleinen Geschäftsverhandlungen zurückzukehren. Aber ich habe es mit einem sehr unterschiedlichen Geschäftsmodell gemacht. Also helfe ich jetzt Menschen, die kaufen oder verkaufen, aber ich mache es als Konsultant. Und ich habe den Prozess in einer Serie von Schritten gemapert. Ich habe Geräte, die ich in jedem Schritt durchführe.
Und ich habe das Geschäftsmodell von Lehrern und Accountants gebraucht, in dem ich jeden Schritt mit Leuten tue und ich sie für meine Arbeit baue, wie ich jeden Schritt tue. Und so macht es ein paar Dinge. Nummer eins, es verhindert das große Kontingenz-Kashflow-Rollercoaster, das Geschäftsführer oft von.
Aber Nummer zwei, die Leute, mit denen ich arbeite, werden mich oft viel weniger bezahlen, als wenn sie einen Geschäftsführer gehören oder mit einem Geschäftsführer arbeiten. Und der Grund ist, dass Geschäftsführer Kommissionen bezahlen, damit sie einen guten Lebensraum verdienen, den jeder verstehen kann.
But when you understand how many deals a broker works on that just don't go anywhere, you realize They have to charge higher rates because the deals that do close have to cover over for the work that went into the other ones. And the difference with me is that every person I work with is paying me every step along the way.
And so the people who successfully do deals end up paying a lot less than if they had done the traditional broker model. And it's working. It's been about almost 10 years. So it's going well.
So a lot of people want to start a business or they want to buy a business. They don't really know the pitfalls of both of them. And one of the things we talked about right before we came on air was that you just released a kind of a post that gave a shocking thing that a lot of people were like, hey, that'd be really great.
Do we ever talk a little bit about the post you just made about how many new businesses are starting and what your thoughts on that?
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Chapter 6: How does industry-specific knowledge impact acquisitions?
Chapter 7: What is the 'silver tsunami' and its implications for business transfers?
But when you understand how many deals a broker works on that just don't go anywhere, you realize They have to charge higher rates because the deals that do close have to cover over for the work that went into the other ones. And the difference with me is that every person I work with is paying me every step along the way.
And so the people who successfully do deals end up paying a lot less than if they had done the traditional broker model. And it's working. It's been about almost 10 years. So it's going well.
So a lot of people want to start a business or they want to buy a business. They don't really know the pitfalls of both of them. And one of the things we talked about right before we came on air was that you just released a kind of a post that gave a shocking thing that a lot of people were like, hey, that'd be really great.
Do we ever talk a little bit about the post you just made about how many new businesses are starting and what your thoughts on that?
Ja, klar. Also gab es Daten, die aus dem US-Gewerbe herausgekommen sind, die über den Boom in neuen Geschäftsmodellen sprechen. Und sie sprachen darüber, wie positiv das für die Wirtschaft war. Und ich ging und schaute die unterliegenden Daten. Es gab einen Bericht.
Und eines der Dinge, die nicht klar war in den Headlines, ist, dass die Leute, die Registrierer der verschiedenen Staaten und föderalen Ebenen, die das Starten neuer Entitäten recorden, sie klassifizieren Start-ups in zwei verschiedene Buckets. Da gibt es die Wiederaufgaben.
Nicht zu sagen, dass es eine schlechte Art ist, aber es gibt bestimmte Leute da draußen, die einfach nur ständig Entitäten kreieren. Also wer ist das? Nun, das sind vielleicht große Unternehmen, die vielleicht eine andere Firma für jedes Gebäude, das sie besitzen, z.B. Or what have you. And certain law firms maybe that are helping them do this.
And so is it really a new business when a big Fortune 500 company creates a new LLC because they want to open up a warehouse in Minnesota? They might create an entity for that, but it's not really a new business. And so if you kind of look at that and you take those away, dann ja, es gibt einen Ausstieg in den täglichen Menschen, die ein Geschäft starten.
Aber die Regierung recordiert nicht, welches Geschäft das sind oder welche Phase sie sind oder was sie tun wollen oder so etwas. Sie sagen einfach, hey, ein neues LLC oder ein neues Unternehmen ist geformt und sie zählen sie einfach.
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