The Deal Box: How to Know Which Business Is Actually Right for You | 358

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Transcript

SPEAKER_01 0:00

Welcome back to the Business of Beers Podcast, your daily dose of strategies, tools, and tips to help you build an eight-figure business. Today's episode is a clip from one of my YouTube lives. If you'd like to hear the whole thing, there's a link below in the description. Cheers.

SPEAKER_00 0:16

I want to show you one other thing. Uh and it's this thing called the the deal the deal box. And I think it's really important when you're when you're looking at a business to really have a clear like box, like you're a batter trying to go hit it hit a ball, of what are you going to swing at? Like what are the things that really you're going to be excited about versus what are the things that like you know are outside your box and you you're totally blind to them. And so, you know, I've become better as an operator for the businesses that I buy in, or even the ones that I want to partner in based on this on this deal box. And so I'm going to walk over this pretty quick and then we'll get into like diving into some of these. But you you want to look at the business through the lens based on your situation. And so if you're looking to buy your first business, like the stuff that we're going to go over here is is so critical because I think this is why a lot of people get stuck, and a lot of people that I, you know, and I have a team that helps people buy franchises, and and um, you know, this is like the first thing that I recommend them doing is because they're open to anything, right? And that you could like, and if you're open to anything, it's it's really hard to get clear on what you want, and then like you're chasing all these rabbits and going down all these things, and it's uh you're not gonna get anywhere. And so first thing is budget. So, like how much money do you have to invest? And so what you want to look at is both cash, like not really net worth, that doesn't matter as much, but like from a cash perspective, what are you willing to put into the business? And and be honest that like like there's risk that you lose it, right? And so you don't want to you don't want to put in any more that you can afford to not see back for a while. How much you're willing to borrow? Some people are okay taking debt on. There's other people that are like, hey, Dave Ramsey, like uh, I'm not gonna take anything. If you do decide to take debt, there's a lot of different ways you can do it. SBA, seller financing, personal loans, HELOCs, 401k, like leveraging all that stuff. Uh so ultimately total budget, understanding what your your monthly nut is and how many months of runway. Because a lot of times, if you're buying these new businesses or even even launching one from scratch, a lot of times these things take time to ramp up. And you have to be okay in some of these, in like not making money for a little while. And and like that is a reality for many business owners, even ones that are buying existing businesses with cash flow. Like, it's possible that you could get in there and the business, you know, has a bunch of things that you didn't defer to expenses and equipment that breaks, and like you end up taking all the money that you thought you were going to distribute out and like put it back into the business because you need to like ramp it up. And so just just be aware that that like you know, you should definitely have a good runway. And if not, you that's where you kind of look into uh lowering expenses or finding a different opportunity. Time inventory, huge one. Like we all we only have so many hours in a day, right? And so, how many hours can you like realistically work? You know, if you're going full time to thing, you know, better. Uh that's like the best way to do it. For or if it's like me and it's like, all right, I'm gonna I'm gonna add this to my team, then it's like, how much does this spread my team in? And so, you know, even in Midas, like we have 36 locations. I'm not buying a single location at an hour and a half away because I know from my my team's perspective, it would spread my guy really thin, and that would be that'd be difficult unless we had this bigger plan. And so I'm like pretty conscientious of that. Um and then also understanding what the um oh no, I got that later, another part of the time. Uh and then like are you going, are you like are multiple people gonna be involved in this business? So maybe it's you and your wife or you and your your husband, and like together you're gonna you're gonna tag team and handle it. Uh, and just understanding is this like a side hustle that you're just doing on the nights and weekends and you're making a little bit of cash, or is this like, hey, we're going all in, I'm quitting my job, um, and uh uh like like we got to burn the boats here. Then it's like skills and strength. So like I I want to get into a business that matches my skills and strength. And all businesses are not the same. And so you really want to kind of get into are you a salesperson or a systems person? Those are like the two big buckets. Like, if you're a salesperson, you could you could do really, really well in a business like this, um, the artificial turf business. Like we are selling $10,000 jobs, 2030. I mean, we my partner sold a $70,000 job. We're working on a a $2 million estimate right now that I I think we're gonna get. But he's just because he's really good at he's really good at sales, right? But if you're like a systems person and you're like, hey, I don't really like, you know, whatever, trying to sell in home and overcoming the objections and dealing with financing and all this stuff, you probably want to get you probably not that type of business. You'd probably be better suited, even in something that's like this B2B kitchen services. Like there is no sales, it's like an operational heavy business, um, managing routes and equipment and and like labor and stuff. So anyway, you you understand what are your talents and then and then finding a business that matches that versus trying to like get into something that you're not gonna be very good at. Risk tolerance. If you lost this money, how would it change your life? Do you have a fallback plan? Can you sleep at night with debt? All the things that like you become a business owner, or or like even if it's me and I'm saying, hey, do I want to go and spend millions of dollars to buy another market and and take on you know triple the amount of debt that I have today? You know, I don't know. Like, I don't know if I'm gonna do that at the point that I'm at now. And so just understanding your risk tolerance, you know, even for me, I was I was way more you know open to risk earlier on, but then as you you know, you you go you get bigger, you know, it lowers it. And then lifestyle. So like I think this is like a big one that a lot of people under underestimate, but just like, what do you think your life is gonna look like after buying this business or getting involved in this business? And that it's possible that that business requires nights and weekends in terms of like, or that that this kitchen business, like they literally service people in the middle of the night. And as the owner, like if if there's a problem, they're gonna call you at at 4 a.m. or at midnight. And until you build that layer of management, uh, you gotta be okay with that. Seasonal business, like some seasonal businesses are great, people love it because they just like get the week, the the summers off, they go to Florida, whatever. Then other people like it would drive them crazy. So, anyway, that's uh this is the deal in box. So before you even like waste time on biz by sell or looking at anything or talking to brokers, you really have to have like a pretty good idea on specifically what's your box look like. Like, what are the businesses that you would look at and you would get super excited about? And what are the ones that you're like, nah, this is stupid, and you just keep scrolling. Um, and then you can set up alerts and stuff based on what you're looking for. So we're looking at budget, we're looking at time invested, we're looking at your skills, we're looking at risk and lifestyle. These are the five things. So when I think about like what are your skills, so if you are a techie person and you're into all this stuff, then I I would think if you bought that type of company, you you like you're passionate about it as like uh an industry. I I I think that almost a requirement. It's not something that like I would get into because I don't think I could be like I don't think I'd care enough. And uh a lot of businesses like that that are highly specialized in the service, like you're going to these venues, you're setting up all these lights, you're making a good show. Like my skills are like I I'm good at taking something that that like works and uh copying and pasting it like over and over and over again. Like I buy one shop and it's like boom, boom, boom, boom, I like stamp them out, right? Like that's what I'm like, that's what my skill is, and the way that my brain works is then it's everything's like process and funnel driven. It's like how do we create consistent experience? Um and so for me, franchising works really well because that's the whole model. Uh the same with like the turf business. It's like, all right, how do we like, how do we get a sale, like how do we, how do we, how do we systematize the sale process to sell a $10,000 you know backyard or whatever? And then how do we systematize the sales process? And then how do we multiply people and then how do we multiply markets? Same, same concept, just just a little bit different flow. And so my problem personally with a business like that is I don't think that is the type of business that you can like stamp out. Like I think it's it it would I think it would be much harder because it's so specialty in nature. And um, but for you, like if that's what you love and you're like, hey, I don't care about stamping it out. I just want like I want like a really good business that I can like like get in every day and I and I and I love it and and all that, then I think that'd be I think that'd be awesome for you. Um not just not for me uh personally.