If you enjoyed this video and would like to take the next step to learn the best ways of buying a business, without risking your own cash, you can access my free training at bit.ly/4ajGRQH Thank you!
A minute and a half in and all that's been said is the 'title' of the video in a number of different way. In business, you cut to the chase. So... I'm out!
If I could show you how to buy a business without actually showing you how to buy a business without any money and if I could show you how to buy a business and say the same thing over and over and over
How do you establish trust with an owner when structuring an earn out? In other words, how do you ensure them that they will receive their performance-based payments as agreed without them having any visibility into the business's P&L's, etc.?
@K C --- Typically, as long as the 'Seller' has guarantees stipulated in the Purchase & Sale Agreement that they (the Seller along with the Seller's attorneys or accountants etc) are entitled to review the financials statements by a certain date each year during the earn-out period, the Sellers are usually satisfied with that arrangement. These fears are usually appeased via various clauses that can easily be included in the contracts between the buyer and the seller.
Hey . Really informative video . Please guide me with this situation . I own a steel manufacturingbusiness . And want to buy a steel plant in order to expand my business . I wish to buy the plant through lease cum buy option for which I am willing to pay 1.5 times the price of the business but with no money down . How do I find business owners who would want to sell their business at the said premium ? Thanks a lot .
According to the sixth method: 1. business Purchase $ 1 million, 2. The business account has $ 100,000 3. The owner leaves the money in the company, 4. The company will be worth $ 1.1 million. 5. The owner does not have to pay 40% tax on if he would take a dividend, but only 10% because he left the money in the company, does this mean that the remaining 30% can be used as personal capital to get a loan from the bank and with it pay the owner? 6. What percentage of UK tax is paid on the profit from the sale of the business?
@@Yoni_Eliav Like I tell people we are not evaluating businesses we are making offers, with that said; your offer is based on the formula of ( cashflow / risk ) while maintaining a base of 1.75x DSCR for debt repayment and retention of cash-flow. So in the case you Illustrated, the seller instead of taking a lump sum upfront they would take the payment over a series of years ( seller finance ) with interested on that money, when purchasing the company you will ask the seller for working capital ( the formula is what's the break even for the month x amount of months, usually 3-6 ) and / or if there is money left in the business you can use that to get a working capital loan on it. But your debt repayment is not based on the money in their bank account but the yearly cash-flows. And minimum you want $300k in earnings, the lower the riskier and the less likely to get external funding. Investors want minimum $1M in earnings as there is more "meat on the bones" and rightly so.
Hey @Jonathan need some advice on a business (gym) which is on sale but I don't have enough funds to acquire it. Which would be the most advisable choice to take?
Hello Jonathan, very interesting topic! Any way to exchange with you about an opportunity I am working on? I need someone like for to pull of a complicated deal.
@@theDealmakers Thanks for responding. I would like to continue this conversation via email, if possible. I find your thought process very intriguing. What would be the best method of contacting you? Much appreciated.
@@gd6576 Like I tell people we are not evaluating businesses we are making offers, with that said; your offer is based on the formula of ( cashflow / risk ) while maintaining a base of 1.75x DSCR for debt repayment and retention of cash-flow. So in the case you Illustrated, the seller instead of taking a lump sum upfront they would take the payment over a series of years ( seller finance ) with interested on that money, when purchasing the company you will ask the seller for working capital ( the formula is what's the break even for the month x amount of months, usually 3-6 ) and / or if there is money left in the business you can use that to get a working capital loan on it. But your debt repayment is not based on the money in their bank account but the yearly cash-flows. And minimum you want $300k in earnings, the lower the riskier and the less likely to get external funding. Investors want minimum $1M in earnings as there is more "meat on the bones" and rightly so.
Is it possible to approach a business which is part of a franchise in this way, or do you think it would weaken a person's chances, because franchises are more financially stable.
@@megamistful why Would you buy a business where you can’t change the name, can’t change the products, can’t change the pricing, can’t change the marketing and have to pay a percentage of turnover to someone else?
@@megamistful Basically Franchise is buying yourself a Job. The franchise business model is designed to make the FranchiSOR rich, not the FranchiSEE. Jon is 100% right. No franchisee ever becomes rich.
@@Loreleiiii before that for my personal satisfaction like to develop professional qualifications and knowledge in the field of finance and statistics, so that can be cfo of my own business
Like I tell people we are not evaluating businesses we are making offers, with that said; your offer is based on the formula of ( cashflow / risk ) while maintaining a base of 1.75x DSCR for debt repayment and retention of cash-flow. So in the case you Illustrated, the seller instead of taking a lump sum upfront they would take the payment over a series of years ( seller finance ) with interested on that money, when purchasing the company you will ask the seller for working capital ( the formula is what's the break even for the month x amount of months, usually 3-6 ) and / or if there is money left in the business you can use that to get a working capital loan on it. But your debt repayment is not based on the money in their bank account but the yearly cash-flows. And minimum you want $300k in earnings, the lower the riskier and the less likely to get external funding. Investors want minimum $1M in earnings as there is more "meat on the bones" and rightly so.
Do you purchase or refinance for assets based finance? Ss I do not own the business or property but aiming to purchase both to the sell lands of which then pays off the loan essentially.
@@theDealmakersThis is really a good information and can be crucial in creating the red sea of competitors... I mean, I am literally going to the banks this week to see if we could do something with it (Croatian banks). I messaged you on LinkedIn and hopefully we speak soon. Stay safe.
@@theDealmakers I agree. I like to work in a way that if I receive an information from someone that I benefit from, to show gratitude. I also noticed that not everyone works in that way, hence exposing myself may not be a good idea. But this is only me. From your videos I noticed that you have the confidence to trigger the minds of the people, I highly respect that.
In regards to credit, anybody who owns over 20% equity in the company has to sign off, but you can get someone else to sign off for you as the guarantor. There are also options like Personal Guarantee Insurance.
That is was I looking for, could it be also combined between an LBO and a seller financing? And what if the buyer has some personal debt not related to any business? There's any kind of way structure where the bank doesn`t need any of the histories of the buyer?
Sam is here : yes, absolutely. Personal debt is largely irrelevant unless the company has a charge over it as a result. Unsure what you mean in the final sentence
@@theDealmakers Got your book. And I can confidently say, I don't know how to put it down. Got it last night. 80% done. I do have a question that I could not find in the book.
Not everyone wants to take over a business, I know many people who owns business and a son or daugther, but their offspring have no interest in becoming a business owner
My dad sold his business instead of giving it to me because he’s a stubborn man and wouldn’t listen to my business development ideas. It was always his way which is why it wasn’t working out for him
Jonathan... I am a former lawyer. I went through tough financial issues due to marriage breakdown. My credit rating is knackered but I am determined to get back on my feet. Can I work this model with a poor credit rating? I have some good ideas for acquisitions from my prior area of expertise..
Jonathan Jay thanks but won’t my ability to obtain credit impact my power to fund or invest into the acquisitions ... even if i don’t physically need to dip into credit (I understand buyer finance etc) ... do I need to show financial strengths on a private level?
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If you enjoyed this video and would like to take the next step to learn the best ways of buying a business, without risking your own cash, you can access my free training at bit.ly/4ajGRQH
Thank you!
I made lots of money buying companies with problems I knew how to solve the problems then resold them as good companies with no problems .
Do you put then into an llc or corporation or do you buy that also when you assume control of the company?
Great. I wish you left out the music as your content is great without it
Noted!
Nearly for 2 minutes you are repeating the same statement lol
some things are worth repeating
I felt the same way
Don’t listen then go away
What a silly comment...the man put to much effort to make that video you have to participate it at least...
Proof that small minds are everywhere
more than 2 mins to say just one line?????
A minute and a half in and all that's been said is the 'title' of the video in a number of different way. In business, you cut to the chase. So... I'm out!
If I could show you how to buy a business without actually showing you how to buy a business without any money and if I could show you how to buy a business and say the same thing over and over and over
Well, there are actually six methods in this video
How do you establish trust with an owner when structuring an earn out? In other words, how do you ensure them that they will receive their performance-based payments as agreed without them having any visibility into the business's P&L's, etc.?
You're right - it's very important - partly down to your personal credibility and partly the legal protections you provide
@@theDealmakers Thank you! Enjoying your content.
@K C --- Typically, as long as the 'Seller' has guarantees stipulated in the Purchase & Sale Agreement that they (the Seller along with the Seller's attorneys or accountants etc) are entitled to review the financials statements by a certain date each year during the earn-out period, the Sellers are usually satisfied with that arrangement. These fears are usually appeased via various clauses that can easily be included in the contracts between the buyer and the seller.
It's a contract/liability for the business just like any other long term note. It's just a private note that is held by the seller instead of a bank.
Hey . Really informative video .
Please guide me with this situation .
I own a steel manufacturingbusiness . And want to buy a steel plant in order to expand my business . I wish to buy the plant through lease cum buy option for which I am willing to pay 1.5 times the price of the business but with no money down . How do I find business owners who would want to sell their business at the said premium ?
Thanks a lot .
According to the sixth method:
1. business Purchase $ 1 million,
2. The business account has $ 100,000
3. The owner leaves the money in the company,
4. The company will be worth $ 1.1 million.
5. The owner does not have to pay 40% tax on if he would take a dividend, but only 10% because he left the money in the company,
does this mean that the remaining 30% can be used as personal capital to get a loan from the bank and with it pay the owner?
6. What percentage of UK tax is paid on the profit from the sale of the business?
Please watch more videos on this channel as your logic went wrong from point 3
@@theDealmakers I saw all the videos and there was no more extensive information in the videos on this point.
I'd be happy if you direct me
@@Yoni_Eliav
Like I tell people we are not evaluating businesses we are making offers, with that said; your offer is based on the formula of ( cashflow / risk ) while maintaining a base of 1.75x DSCR for debt repayment and retention of cash-flow.
So in the case you Illustrated, the seller instead of taking a lump sum upfront they would take the payment over a series of years ( seller finance ) with interested on that money, when purchasing the company you will ask the seller for working capital ( the formula is what's the break even for the month x amount of months, usually 3-6 ) and / or if there is money left in the business you can use that to get a working capital loan on it.
But your debt repayment is not based on the money in their bank account but the yearly cash-flows. And minimum you want $300k in earnings, the lower the riskier and the less likely to get external funding. Investors want minimum $1M in earnings as there is more "meat on the bones" and rightly so.
@@billionaireacquisitionmast459 I just visited your channel & subscribed. Your doing a great job❤️ Hopefully you get more visitors too
Good evening Jonathan
Could you do a video explaining how to source a good deal making team
Very good informative vedio sir thanks again 👍 Sir
Hey @Jonathan need some advice on a business (gym) which is on sale but I don't have enough funds to acquire it. Which would be the most advisable choice to take?
Hello Jonathan, very interesting topic! Any way to exchange with you about an opportunity I am working on? I need someone like for to pull of a complicated deal.
Number five and six just might help me buy that motorcycle shop. I’ve been dreaming of thank you for this video.
This explanation is not clear for me. It will be more understandable if you write some scheme or make some illustration
Please make a video on how to find best business to buy and how to find that that business in good or not good to buy
Mind blown. 6th method. Tell me more.
what do you want to know?
@@theDealmakers Thanks for responding. I would like to continue this conversation via email, if possible. I find your thought process very intriguing. What would be the best method of contacting you? Much appreciated.
@@gd6576 if you want to learn how to buy a business this way, then this is the best course to attend: www.thedealmakersacademy.com/FAST
@@gd6576
Like I tell people we are not evaluating businesses we are making offers, with that said; your offer is based on the formula of ( cashflow / risk ) while maintaining a base of 1.75x DSCR for debt repayment and retention of cash-flow.
So in the case you Illustrated, the seller instead of taking a lump sum upfront they would take the payment over a series of years ( seller finance ) with interested on that money, when purchasing the company you will ask the seller for working capital ( the formula is what's the break even for the month x amount of months, usually 3-6 ) and / or if there is money left in the business you can use that to get a working capital loan on it.
But your debt repayment is not based on the money in their bank account but the yearly cash-flows. And minimum you want $300k in earnings, the lower the riskier and the less likely to get external funding. Investors want minimum $1M in earnings as there is more "meat on the bones" and rightly so.
@@billionaireacquisitionmast459 my mind is blown by all this knowledge in the comment section 🤯.
Is it possible to approach a business which is part of a franchise in this way, or do you think it would weaken a person's chances, because franchises are more financially stable.
I never advise anyone buys a franchise
@@SuccessTrackUK What is wrong with buying an existing franchise? I am very curious about this statement
@@megamistful why Would you buy a business where you can’t change the name, can’t change the products, can’t change the pricing, can’t change the marketing and have to pay a percentage of turnover to someone else?
@@megamistful I own a healthcare franchise and I will NEVER buy another franchise in my life.
@@megamistful Basically Franchise is buying yourself a Job. The franchise business model is designed to make the FranchiSOR rich, not the FranchiSEE. Jon is 100% right. No franchisee ever becomes rich.
Hey @Jonathan let's start a company already 😁
Excellent!
Glad you liked it!
Do these techniques work in Europe and all over the world ?
yes- every country has it's own legal and accounting rules but the principles are the same
Some aspects can be used
My plan is to buy a hotel business which is doing well
Same let’s partner up and be learning buddies lol
@@Loreleiiii before that for my personal satisfaction like to develop professional qualifications and knowledge in the field of finance and statistics, so that can be cfo of my own business
Rarely practical
this is how all businesses are bought - unless you have a lot of money - and most people don't
Can I aquire a business without PG?
yes, you can
Can this be applied in the U.S.?
yes, it's the same world-wide
Can I buy Jonathan Jay?
I like the 5th and 6th method, especially the 6th one. Can you go into more depth please?
I might well do that on another video
Like I tell people we are not evaluating businesses we are making offers, with that said; your offer is based on the formula of ( cashflow / risk ) while maintaining a base of 1.75x DSCR for debt repayment and retention of cash-flow.
So in the case you Illustrated, the seller instead of taking a lump sum upfront they would take the payment over a series of years ( seller finance ) with interested on that money, when purchasing the company you will ask the seller for working capital ( the formula is what's the break even for the month x amount of months, usually 3-6 ) and / or if there is money left in the business you can use that to get a working capital loan on it.
But your debt repayment is not based on the money in their bank account but the yearly cash-flows. And minimum you want $300k in earnings, the lower the riskier and the less likely to get external funding. Investors want minimum $1M in earnings as there is more "meat on the bones" and rightly so.
Cool content
Do you purchase or refinance for assets based finance? Ss I do not own the business or property but aiming to purchase both to the sell lands of which then pays off the loan essentially.
It's a refinance
You should remove this from youtube
why is that?
@@theDealmakersThis is really a good information and can be crucial in creating the red sea of competitors... I mean, I am literally going to the banks this week to see if we could do something with it (Croatian banks).
I messaged you on LinkedIn and hopefully we speak soon.
Stay safe.
@@delta1200 you're only competitors are those who take action - and that's always less than half
@@theDealmakers I agree. I like to work in a way that if I receive an information from someone that I benefit from, to show gratitude. I also noticed that not everyone works in that way, hence exposing myself may not be a good idea. But this is only me.
From your videos I noticed that you have the confidence to trigger the minds of the people, I highly respect that.
Jonathan i need help plz on how to buy a business i need some advice plz
Jay,
???
I got very bad credit
How do I go through
go through what?
@@udbdkuhsvd5000 your credit score isn't relevant when buying a business
In regards to credit, anybody who owns over 20% equity in the company has to sign off, but you can get someone else to sign off for you as the guarantor. There are also options like Personal Guarantee Insurance.
That is was I looking for, could it be also combined between an LBO and a seller financing? And what if the buyer has some personal debt not related to any business? There's any kind of way structure where the bank doesn`t need any of the histories of the buyer?
Sam is here : yes, absolutely. Personal debt is largely irrelevant unless the company has a charge over it as a result.
Unsure what you mean in the final sentence
@@SuccessTrackUK Thanks for the advice!
Love your content. Does this apply to USA also .
yes, it does - any country
@@theDealmakers thank you so much for this clip right here. Took lot of note.
However, a question that keep coming up for me was.
@@theDealmakers Got your book. And I can confidently say, I don't know how to put it down. Got it last night. 80% done.
I do have a question that I could not find in the book.
What is the business structure best set up for a Merger and acquisition business like this (LLC, C Corp, S corp, B crop) etc?
@@maximo5737 My advice in this area only cover the UK - you would need specific accounting/legal advice for your country
This is gold thanks 💝
Glad you like it!
they way you present it as the seller is an idiot and as a buyer , i am the genius hypnotise the seller
nope, not at all
Wrong mindset
Repeat repeat and talk like you are deaf!
thank you!
hi jo , now one sells business unless it was losing, otherwise they won't , if retiring they give it to there son , or any relative ofr friend
are you saying that no one ever sells a profitable business? Interesting opinion
Not everyone wants to take over a business, I know many people who owns business and a son or daugther, but their offspring have no interest in becoming a business owner
My dad sold his business instead of giving it to me because he’s a stubborn man and wouldn’t listen to my business development ideas. It was always his way which is why it wasn’t working out for him
What about getting a business loan as a down payment to finance an owner seller contract?
You could, but that's probably going to be hard to achieve - there are easier ways to finance a deal
my mate wants to sell his business for 183k , the yearly revenue is 300 pound /year
Jonathan... I am a former lawyer. I went through tough financial issues due to marriage breakdown. My credit rating is knackered but I am determined to get back on my feet. Can I work this model with a poor credit rating? I have some good ideas for acquisitions from my prior area of expertise..
Raj B your credit rating isn’t really relevant
Jonathan Jay thanks but won’t my ability to obtain credit impact my power to fund or invest into the acquisitions ... even if i don’t physically need to dip into credit
(I understand buyer finance etc) ... do I need to show financial strengths on a private level?
@@rajb688 no, you don’t
literally showing my mum this for meme value
I agree, but what if the bank money platform is missing?
what's a money bank platform?