Manage a Small Business SME Management

Victor wants to know about any magic pills that might exist for business success.
I’ve got three for you…
1. Have lots of ______________
2. Be part of an entrepreneurial _________________
3. Build a _______________ of people who actually know and __________ you.
Watch this week’s video and see if you can fill in the blanks. https://youtu.be/bJfu2PhL0g4 
Learn how to buy an already-successful and profitable business even in the covid-recession of 2020 https://www.BusinessBuyerAdvantage.com   
Book a call with me at https://www.clarity.fm/davidbarnett  
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Want to look dangerous like David? Jeff Alpaugh Customs has a special offer for you: https://www.JeffAlpaugh.com/DCB10

 business broker business brokers mergers and acquisitions business advantage smb

Buy a Business

3 Magic Pills for Business Success

I tackle the question, "should my business own the building its located in?"  the answer is surprising to many small business owners and wantrepreneurs.

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[OLDIE] Should Businesses Own Real Estate? Or Is It Better To Lease?

I tell a story of how a young woman is growing her business to death by letting receivables grow faster than payables.  Cautionary tale for any small business owner.

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[OLDIE] Growing A Business To DEATH! Successfully Managing Cash Flow In A Small Business

I discuss the difference between loans and leases when getting equipment in a small business.  The pros and cons of each and why I prefer leases.  Not a discussion about taxes.

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Why would a business want to lease a piece of equipment instead of borrowing money to buy it?
For me the answer is quite simple, cash (capital) is scarce.
When you lease instead of borrowing, you can usually get the equipment with a far lower or no down payment.
Why? In a leasing arrangement the lease company retains title to the goods and can more easily repossess it if you default on your payments.  Because they’re more ‘secure’ they are usually willing to extend more credit.
A bank may have to go through a more difficult process to seize its collateral in a similar situation.
Leasing companies may also have better expertise in the specific equipment that they finance. This means they are better able to manage losses.  Again, another reason to extend more credit than a lender might.
Another great reason why leasing makes sense is because it forces a business to recognize the cost of using the equipment as they are ‘using it up’ to generate cash flow.
I’ve seen too many situations where people have bought equipment outright with no debt.  Or, they made a big down payment and amortized the loan over a period greater than the useful life of the equipment.
They end up using and retiring the equipment before they have finished paying for it!
In the case where there is no debt, companies use their better cash flow position to undercut competitors and trick themselves into believing they are making a lot of money.   
What they’re actually doing is converting their invested capital in the equipment into cash without setting aside the money to replace the equipment!  When it wears out they end up in trouble!
I’ve seen this particularly in trucking businesses where people with no payment make lots of profit and live a great lifestyle but end up in trouble when that truck finally needs to be replaced.
Leasing forces you to recognize the true capital cost of the equipment as you’re using it to make money.
Sometimes you can even finance soft costs such as installation with leasing.
Sometimes leases are only in the company name and don’t require a personal guarantee.  This doesn’t happen with loans from the bank.
With lots of advantages, leases sometimes do cost more than traditional loans but sometimes the terms are more important than the price.  
I’ve never heard of a lease getting ‘called,’ but it happens all the time with business loans and lines of credit.


[OLDIE] Leases Vs. Loans When Getting Equipment In A Business

Robert asks: How do you form and manage a mastermind group?

Watch the video: https://youtu.be/Zj0Yn5YGD0A

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The Invest Local Book blog is all about small business, local investing, home economics, franchises, small business systems and borrowing money for your business. It's full of great content and I look forward to seeing your feedback.

[OLDIE]  How To Form And Manage A Mastermind Group

Watch the video here: https://youtu.be/1EjKjSAd1F8
Learn to buy a business: http://www.BusinessBuyerAdvantage.com
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Join my email list/ see my blog: http://www.InvestLocalBook.com

Related article:
Should my Small Business have 100 or 1,000,000 Shares? How do Shares work?
Over the last two weeks I’ve had two different clients who were somewhat confused about how shares work in a corporation.  Both were small business owners.
One owner was trying to pass the family business on to their children.  They asked me how to ‘transfer their shares’ from the established corporation to the new corporations of their children. Hmmmm…
The other client was a pair of entrepreneurs who wanted to bring on a third partner and have his investment go into the company.  They weren’t sure how to accomplish this.  
I taught them how they could achieve their goals by splitting their existing shares and have the corporation issue new shares to the new partner.
Not sure what I’m talking about?  Learn how to use a corporation’s shares to make your deals in this video: https://youtu.be/1EjKjSAd1F8 
Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.
If you would like to hear from me weekly before anyone else, you can sign yourself up at www.DavidCBarnett.com  
I’m coming to Charlottetown, Prince Edward Island in January 2017.  Seats are already filling up.  Find all my live events here: http://davidbarnett.eventbrite.ca 
Thanks and I’ll see you next time.

Should Your Business Have 100 Or 1000000 Shares- How To Buy A Small Business

Watch the video here: https://youtu.be/MeFAmvf6veE
Learn more about Local Investing at http://www.InvestLocalBook.com or buy it at Amazon. 
Learn about the local investing academy at http://www.LocalInvestingCourse.com 


Related Article:

Why can’t a borrower offer the same collateral to many lenders?
I got a question from a viewer in Prince Edward Island the other day.  
He had read my 2014 best-selling book, Invest Local, and had a question about preparing information for a lawyer in order to register security on a lending deal.
Many people who are contemplating investing in a small business via making a secured loan often wonder how they can make sure the borrower isn’t offering the same collateral to more than one lender.
I made this video to explain how registries work and give a brief history of how they came to be. Watch: https://youtu.be/MeFAmvf6veE 
The PPSR registries (or UCC registries) allow you to publicly record the fact that a certain piece of property has been pledged as loan collateral.  They’re the most versatile registries because you can record a lien on almost any kind of property (outside of real estate.) 
The system is so straight forward that many local investors register their own security using online services.  This is in contrast to real estate registries which are strictly the domain of attorneys because they are so complex and every jurisdiction is unique.
I’ve done dozens of deals where I’ve registered myself, using a third party service provider,  as a lender in a PPSA database.  I’ve also done many lien-searches when investigating the purchase of used vehicles or equipment.
It’s critical to learn how this works if you want to deal in lending or used equipment because a lender’s rights under a lien don’t go away if the property is sold.  
Simply put, if you buy an RV and there is an outstanding loan secured against it and the loan goes into default, the lender can still take it to satisfy the debt whether you bought it or not.
If you’d like to learn how to create high returns by making local private lending and lease deals, check out http://www.LocalInvestingCourse.com The Local Investing Academy starts in September.  For a quick introduction, read Invest Local.  It’s available from Amazon stores worldwide or as a .pdf here: https://gum.co/quoB 
Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.
If you would like to hear from me weekly before anyone else, you can sign yourself up at www.DavidCBarnett.com  
Do you live in Toronto or the Maritimes?  I’ve got workshops coming up for Toronto in September on buying and selling businesses and in October-December in the Maritimes.  Book now http://davidbarnett.eventbrite.ca 
Thanks and I’ll see you next time.

Why Can't You Use The Same Collateral For Two Loans- How To Make Private Loans - Local Investing

you're the worst kind of coward
run when you want me most
push me away afraid that I won't come close
act like everything that hurts is all my fault
you're the worst kind of coward
run when you want me most

do you know what you're holding
when I'm in your arms
do you know what you're hearing
when I whisper these words
do you know what you have
when you have my heart
if the answer is no
I'm just gonna go

you're the worst kind of liar
saying you're not in love
you're feeling something trying to shut it off
pretend you're cold inside when really you're warming up
you're the worst kind of liar 
saying you're not in love

I think you know I think you know
I think you know

I discuss buying, selling, financing and managing small and medium sized businesses either alone or with guests.  
I've started, bought, sold and closed businesses. 
Author of three best-selling business books; 'Invest Local: a guide to superior investment returns in your own community,' 'Franchise Warnings: What you really need to know before you buy' and 'How To Sell My Own Business: A guide to selling your own business without paying a broker's commission.' all available as well as 5 other books on Amazon or from www.DavidCBarnett.com

Why Can't You Use The Same Collateral For Two Loans- How To Make Private Loans - Local Investing

DBarnettMoncton

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