Listen "The LMM Is RAINING Zero-Money Down Acquisition Gurus... What to think?"
Episode Synopsis
Key Ideas and Facts:The AI breaks down a recent LinkedIn post by Ben Kelly (and the comments) about his zero-money down business acquisition process.Background: Ben Kelly acquired three businesses (SaaS, Nail Salon, and Web Design) while working as a W-2 employee. He claims to spend only 2 hours per week on one of them, and none on the other two.SaaS Company: Revenue - $1,318,163, Cash Flow - $150,000, Weekly Effort - 2 hoursNail Salon: Revenue - $1,124,889, Cash Flow - $30,000, Weekly Effort - NoneWeb Design Company: Revenue - $256,667, Cash Flow - $10,000, Weekly Effort - None8-Step Acquisition Strategy: The post outlines an 8-step strategy for acquiring a small business while employed:SBA Loan Application: Apply for an SBA loan at a bank, providing a business plan, W-2 pay stubs, tax returns, and a personal financial statement.Financial Audit: Audit Profit and Loss statements (P&Ls) and tax statements. Kelly suggests offering an accountant 2.5% equity in the business in exchange for their services.Seller Communication: Understand the seller's motivation, prioritizing retiring owners with well-built businesses. "I love buying from retiring boomers because I know their businesses are usually built well & the reason for selling isn't to do with a business flaw."Private Investor Search: Find a private investor, potentially through your network or LinkedIn.Financial Analysis and Offer: Analyze Seller's Discretionary Earnings (SDE), which Kelly equates to cash flow. Make an offer of 2.3x the SDE. "If SDE is $1M, make an offer of $2.3M."SBA 7a Program and Investor Equity: Use the SBA 7a program where a private investor covers the 10% down payment on the loan in exchange for a 15% equity stake (a 50% equity bonus on their 10% down payment). "Essentially, they get 15% equity for paying 10% down. You're $0 out of pocket."Business Management: Implement changes to run the business "passively" using employee bonus schemes, hiring a general manager, and building out systems. "Your staff are incentivized and able to run daily operations without you being there."Find that full post here: https://www.linkedin.com/feed/update/urn:li:activity:7295804728960028672/DISCLAIMER: The BizNexus Roundup podcast features AI hosts whose analysis is based entirely on pattern recognition and reports created by actual human experts. While our hosts can process vast amounts of data, they've never actually closed a deal or sat in a boardroom.Our discussions draw from publicly available sources and expert insights, but we strongly encourage listeners to consult the original documents and reports referenced in each episode for the complete context and analysis. The AI hosts' market predictions and deal assessments, while data-driven, are no substitute for professional human judgment and due diligence.For actual M&A advice, pleaseLearn More About BizNexus Schedule a Demo: https://www.biznexus.com/demoAccess our marketplace: https://www.biznexus.com/marketplace-homeAccess our community: https://community.biznexus.com/Learn more about OmniSource™: https://omnisource.ai/Follow us on LinkedIn: https://www.linkedin.com/company/biznexusGet an acquisition loan: https://biznexus.tech/acquisition-financing Show Credits Intro Music Artist: DJ Freedem | Track: Pretty Boy
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