Latest / The SmallBizChat with Melinda Emerson / Stop Looking for a Job - There's a Better Answer with Melinda Emerson

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Stop Looking for a Job - There's a Better Answer with Melinda Emerson · The SmallBizChat with Melinda Emerson

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  Three, two, one, zero.
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  Ignition.
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  Lift off.
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  Ending small business failure.
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  Welcome to the Small Biz Chat podcast with the number one small business expert, Melinda
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  Emerson.
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  Melinda's goal is to end small business failure, and she'll give you the information
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  you need to succeed and live the life you dream of.
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  Now here's your host, the small biz chat lady herself, Melinda Emerson.
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  Have you subscribed to the small biz chat podcast?
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  Well, it's time.
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  Every Wednesday, we offer listeners bite sized actionable tips to start and grow a successful
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  small business.
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  In just twenty minutes or so a week, you can get a ton of insight and resources to propel
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  your business forward.
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  Be sure to subscribe to the Small Bitch Chat podcast today.
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  Hi, everybody, and welcome to another episode of the Small Biz Chat podcast where we help you
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  start and grow successful small businesses.
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  I'm your host, Melinda Emerson, the small business lady, America's number one small
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  business expert.
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  And listen, today's topic is simply this, stop looking for a job.
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  There's a better answer, buy a business.
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  Now listen, if you have been laid off, downsized, or you're just plain fed up with
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  corporate America, today's episode might change how you see your next move.
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  Listen, instead of dusting off resumes, helping recruiters call back, what if you just skipped
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  that whole job hunt thing altogether and bought a business instead?
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  Well, today I'm gonna talk about how to build your smarter path to entrepreneurship.
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  It's called entrepreneurship through acquisition.
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  And if you look at the research, 96% of small businesses out here will never reach a million
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  in revenue, which means you can buy them and flip them and grow them.
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  And it's not as much money as you might think.
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  When you start a business that already has customer systems and cash flow on day one,
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  everything is easier, including borrowing money to buy that business.
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  So if you are serious about owning your next act instead of begging for it, this episode's
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  for you.
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  So let's get into it.
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  So why is finding a job mentally outdated?
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  Well, listen, if you are 40, you catching hell out here in the job market.
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  There ageism, there's racism, there's gender discrimination, all the things, right?
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  Not to mention the fact that corporate loyalty is dead and working for the government is no
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  longer a safe bet, especially for people who've been in the workplace twenty, thirty, forty
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  plus years.
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  So I would just wanna give you guys some quick stats.
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  Every day we hear about more layoffs in the government, legal or not, career pivoting
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  amongst mid career commitment is really, really tough.
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  And Lord knows if you had a director VP or SVP job and you have been walked out the door
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  because now DEI is a bad word, it's gonna be extremely difficult for you to get another job
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  at that level making that kind of money.
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  But if you have been in corporate America twenty years, twenty five years, you've got
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  money to invest, you've got savings, you've got assets, which makes you an amazing candidate to
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  buy a business.
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  You don't wanna just be looking for a job because you need insurance, that's not what you
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  wanna do.
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  Insurance is expensive, but you'd rather get it through a business because you can write it off
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  versus just paying it straight up as a solo consultant working out of the back bedroom of
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  your house.
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  I read this book by Walker DeBell and he talks about the startup trap versus the acquisition
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  advantage.
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  And he talks about how the startup phase of a business is actually a company killer.
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  And he's not wrong.
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  It is so hard to get through the gauntlet of what we call small business.
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  And so I really want you to realize that buying a healthy business gives you a 98% success rate
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  once the due diligence is done.
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  Now, the key is making sure that business is healthy.
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  So you do wanna understand what's going on with the business.
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  Like what kind of infrastructure do they have?
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  What kind of long term contracts they have?
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  What kind of brand equity and reputation they have in the marketplace?
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  And what is the team like?
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  Who are the people that work for the business?
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  Does the business completely revolve around the owner or is this a business that you could
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  successfully transition into and grow?
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  It doesn't make sense to buy a business that you don't think you can grow.
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  But if you're buying, like for example, a small service business, a cafe, a marketing agency
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  with stable clients, that is a great business to grow.
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  But let's talk about the availability of businesses.
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  Listen, right now in America, 10,000 baby booms are retiring every single day.
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  Many of them own a business.
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  In fact, 40% of small businesses right now that exist right now are gonna change hands in the
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  next five years because baby boomers want out, they are tired, they do not wanna learn AI.
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  And so they are willing to give it up.
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  And it's not as much money as you think, I swear to you.
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  Millions of people profit off of companies that are already in existence and you could do it
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  too.
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  And right now with 40% of businesses potentially available to transition hands, this
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  is a once in a generation wealth transfer opportunity and you do not want to miss out.
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  And I know you are tired of sending resumes into black holes and not hearing anything or
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  having headhunters jerk you around thinking you got a real opportunity that evaporates, you are
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  tired.
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  And so I want you to think about this as another option that's bigger and better than
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  any job you could ever get, unless they make you CEO, how good could a job actually be?
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  So let's talk about what does it take to buy a business?
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  You have to have good credit.
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  And when I say good credit, I mean six eighty credit score or higher because you are going to
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  have to put a little bit of money in yourself, right, from your four zero one or from your
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  home equity, from your savings, but then you're gonna get an SBA loan to help you buy the rest
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  of it.
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  And you're gonna use the revenues from the business to pay the loan back, right?
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  There's also seller financing.
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  Sometimes from a tax benefit, it benefits the seller to get paid over time as opposed to a
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  big lump sum money where the government's gonna get 30%.
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  So there's lots of deals to be had out here, you guys.
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  And one of the things that you wanna figure out is what we call seller discretionary earnings.
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  And what that is, is it represents the true earning power of a small business and how you
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  figure this out, because it's really about what the owner actually takes home.
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  And to evaluate it, you wanna start with the business's net profit, and then you wanna back
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  out the owner's salary.
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  And then there's all kinds of personal expenses that business owners can run through the
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  business.
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  And then there's interest, taxes, depreciation, one time costs that really won't continue under
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  the new ownership.
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  Once you calculate all of this, this really gives you the clearer picture of the total cash
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  flow available to a single owner.
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  And what you wanna do is compare what we call the SDE or seller discretionary earnings to the
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  asking price to determine if the multiple that they're asking for is actually reasonable.
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  A healthy, stable SDE really indicates that the business can support the debt payments and
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  paying you as the owner a salary, which is what you really wanna calculate and understand.
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  Now, I realize that that is kind of a little bit of a complex thing to understand, but when
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  you come to my conference in January, I'm gonna explain a lot, lot more about it.
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  You also wanna consider what tools and systems that you're gonna use in the business so that
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  you can really understand how the business operates post purchase.
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  Now, the one thing you're gonna have to do if you're thinking about buying a business is
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  shift from employee to CEO.
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  And really it's gonna be a mindset shift.
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  You're gonna have to unlearn all those things corporate America beat into you because no
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  one's coming to save you basically.
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  You really want to understand how to run a business.
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  You might have expertise in HR or marketing or sales, but to run a business, you gotta do 12
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  things right to run your business well.
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  Now, if you have employees, the best thing is you're not gonna be doing it all by yourself.
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  But you really wanna think about how you can acquire a business and grow it.
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  And really what you're evaluating more than anything else is the growth potential of any
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  business that you're really going to be looking at, because you're not buying a business that's
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  market is shrinking, you wanna buy a business whose market is growing.
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  So I just want you to start thinking about this.
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  There's five areas of business right now that are really, really going.
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  Pet care businesses, food service businesses, health and wellness businesses, elder care
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  businesses.
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  There's a lot of areas of business that are growing right now, personal services,
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  businesses, there's lots of areas that you could be looking into and you can buy an
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  existing business or a franchise.
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  There are more than 4,000 franchise concepts.
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  You don't gotta have too many dollars and try to buy a McDonald's.
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  There's one in every price point you can imagine.
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  The thing about a franchise is you really wanna look at what the franchise support is.
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  What is the training after they hand you the keys?
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  What are they going to do to help you be successful?
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  And don't forget, I'm the small business lady.
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  I teach people how to run successful businesses.
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  So even whether you buy an existing business or you buy a franchise, you gonna need the small
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  business lady, honey.
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  So don't forget about me.
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  But anyway, I wanna encourage all of you to think about coming to my conference that I'm
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  hosting in January, it's called the Next Act CEO Summit.
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  And I am so excited to be hosting this event.
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  It's gonna be January.
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  It is virtual, it is online, there is no commute, right?
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  This is a conference for people who are ready to own their next chapter by buying or building
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  a business.
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  It's gonna be three powerful days, Thursday, Friday, and all day Saturday.
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  You're gonna learn from top experts on acquisition and financing and leadership so
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  that you can move from employee to entrepreneur with confidence.
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  I wanna invite you to grab your early bird tickets now because you're gonna get exclusive
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  bonuses, including a pre training with me before the conference even takes place.
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  If you are interested in turning your expertise into equity and never getting fired again, I
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  wanna invite you to go over to smallbizladyuniversity.com/nextactceosummit.
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  Click the link and it's gonna be in the show notes for this podcast.
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  I want you to get your early bird tickets because you guys, this is going to be amazing.
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  So it's not about starting over, it's about starting smarter.
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  And I can't wait to see you at the summit.
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  Again, the website is smallbusinessladyuniversity.com/nextactceosummit.
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  I can't wait to see you there.
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  And thank you for joining this episode of the Small Biz Chat podcast.
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  I'm Melinda Emerson, your host, the Small Biz Lady, and I will leave you with this.
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  You never lose in business, either you win or you learn.
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  God bless everybody.
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  Thanks for listening to the small biz Chat podcast with Melinda Emerson.
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  Subscribe to this podcast wherever you listen to podcasts, and join us next Wednesday for
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  more fantastic information and interviews.
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  You can find more sources and small business success strategies by visiting Melinda's
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  website, succeedasyourownboss.com.
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  Thanks again for listening, and we'll see you next week.