Curly’s Secret To Life And Business Acquisition (You Only Need . . .)

Did you know that Jake Gyllenhaal’s first role was playing Billy Crystal’s son in City Slickers?  It is a pretty good movie.  If you haven’t seen it, the plot revolves around a middle-aged man having an identity crisis.  He tries to mix things up by going to a dude ranch to LARP being a cowboy.  His guide is a very crusty cowboy named Curly, played by veteran character actor Jack Palance.  Palance was also quite the character in real life, famously doing one-arm push-ups as part of his Academy Award speech when he won best-supporting actor.  His performance was anchored by a great speech about how the secret of life was that you needed just one thing.

Billy Crystal’s character then spends the rest of the movie trying to figure out what matters most to him.  It is a good film, with a great lesson.  Did you know that in the business acquisition game, you can apply the same principle?

Just One Business - The Money Math

Once you understand the money math of business acquisition, it is easy to see how just one cash-flowing business can make you a millionaire.  This isn’t theoretical for me.  The example I am about to show you is one of my students who purchased a nail salon.  He financed the deal with an SBA loan for 90% and persuaded a private investor to fund the other 10%.  This means that without any of his own money, he purchased an income stream for his portfolio with the following numbers.

There are three things that jump out from this graph.  First, do you notice that the business is cash-flowing 105K immediately?  The great thing about buying a business is that the ramp-up phase has already happened.  The founder has taken all the risks and suffered all the mistakes for you.  You get cash flow from day one. 

The second thing I want you to understand is that in year 11, his cash flow will double.  How can this be?  Hint: This is when his loan obligations fall off.

If you can evaluate the numbers correctly, this Acquisition Ace only needs to maintain the current cash flow of the business to hit these numbers.  This doesn’t take into account if he chooses to buy another business with the leverage he has gained.   If he can manage to grow the business, these numbers will go up.  “Just One” business will give him a million dollars in income after ten years.  Curly from City Slickers would be proud.

How To Convince Someone To Give You Money

A common objection I hear from people is that they don’t have the money to buy a business.  I just showed you how it can be done without having to use any of your own money.  It is not “easy” to get a SBA loan, or someone to help you with financing in an equity-for-cash deal.  But it isn’t impossible either.

If you can find a business that has been operating at a profit for over 5 years, you have a 90% success rate if you acquire it for the next five.  This is a powerful statistic that most savvy investors are aware of.  This isn’t what brings them into a deal though.  It is a requirement, but it doesn’t matter if they don’t buy into you.

How you position yourself when you approach potential investors is paramount.  If you can showcase your relevant experience on the management side of things it is almost a no-brainer for them to become a silent equity partner.  If the numbers add up, and if they buy into you, they will help you acquire the business.

I know this may seem like a lot but don’t worry.  Over time it will become second nature, especially for those people who work with me.  Learning how to position yourself is a core part of being an Acquisition Ace.

There Is More Than One Way To Get There

The acquisition game is not a one-size-fits-all endeavor.  There are a ton of different ways to get where you want to go.  Don’t get hung up on one path.  Instead, I only want you to start thinking differently about what is possible.  To help you do that I want you to take a look at an X/Twitter thread I did with five creative ways you can fund your first acquisition.  You can take a quick look at it here: 

Don’t let doubt stop you from finding that “one” business that can change your life.  Let yourself start to think differently about what’s possible and start moving toward your goals.

Have a great rest of your week!

 As always, if you want to compress time frames and have me coach you on every part of the process, book a time to chat with me here: Calendar

Ben, I Want to learn more…

If you feel that you are constantly working "in" the business instead of "on" the business and feel that your goal of financial freedom has led you to a prison of your own design.

You are not alone, I used to be there as well.

I have 6 companies and counting and work less than 20 hours a week on them - COMBINED.

It is not rocket science and I can help you do the same for your business.

Choose a time on my Calendar and we will get to it.

Onward,

Ben

PS - Coaching compresses timeframes. If you want help on finding the perfect deal for you, book a time on my calendar here to explore becoming an Acquisition Ace: Calendar

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