784: Smarter Than a Startup: Buy, Manage and Run a Business the Risk-Reduced Way with David Barnett

David Barnett is a business expert who has helped many people buy and sell businesses. He is the author of the book "Smarter Than a Startup", which provides a risk-reduced way for people to get the business of their dreams up and running. Today, David discusses the advantages of buying an existing business over starting a new one from scratch. He explains how buying a business with existing customers, sales, and profits can make it easier to secure financing and reduce the overall risk compared to launching a brand-new venture.

Quotes

“If you have money set aside to be sort of your initial nest egg to start a business, you probably can parlay that money into an acquisition.” - David Barnett

“The whole point of the idea is to figure out how you're going to get into business without risking everything.” - David Barnett

“A very small decline in sales can be a large decline in profits. Businesses are what we call an asymmetrical system.” - David Barnett

Takeaways

00:54 Buying an existing business can be a lower-risk path to entrepreneurship compared to starting from scratch.

03:05 Existing businesses with cash flow and profits have advantages in securing financing and leveraging resources.

12:57 Carefully analyzing the financial details of a business acquisition, including hidden costs, is crucial to avoid overspending.

17:45 Seeking expert guidance can help entrepreneurs navigate the process of buying a business and avoid common pitfalls.

21:00 Caution is advised when considering the purchase of distressed businesses, as the recovery timeline and potential for continued losses may be uncertain.

Resources

Podcast: Play in new window | Download (Duration: 23:14 — 21.5MB) | Embed

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Filed in: Archive 4: 2020-2023 • Interview • Podcast

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