305 -Bulls%$t - Debunking The Myths Of Business Acquisition

0:00Last Friday, I recorded a video, Bullshit, debunking the myths of business acquisition. And that was after I sent an email to my mentees asking them to tell me what they were afraid of when they started this process or what they didn't think was possible and then how they learned whether those were true or not true. And so there were so many responses, almost 200 responses to that email, that I couldn't get them all into one video without making a really long video. So I decided to do Bullshit, Debunking the Myths of Business Acquisition Part 2, which is this week's podcast. So let's go through that.

0:48I'm going to read the comments and give you my comments as well if I need to do that. Mr. Whipple, it was probably the fear of immersing myself into areas I had absolutely no knowledge of. For example, meeting high-end executives to vet as potential directors and fearing that they would ask questions that were way out of the scope of my expertise. Of course, as I spoke to more and more of these guys, I quickly absorbed their acumen and learned how to respond with confidence. I'd say, all in all, for me, looking at the small steps one at a time and taking action helped. I keep making mistakes until I get it right, and eventually it became easy.

1:35Okay, here's a little longer list. I heard people buy troubled companies to do turnarounds, but why would anyone sell a healthy business? There's a whole lot of reasons, but don't do turnarounds at the beginning. Why would anyone agree to sell its finance? They could just stick around for two, three, four, five years longer and get the same money without selling. Yes, but they have to stick around, which a lot of times they don't want to do. Why would experienced CEOs, CFOs, etc. want to join my board? Why wouldn't they do it themselves? Well, they probably realize that teams get things done. I don't have proper expertise.

2:14Maybe I should get an MBA or sales course or start a small company and prove I can run it. Don't need to do that if you have people around you that know how to do it. That's why you put a team around you. Why would owners want to talk to me since I don't have experience myself and no track record as a team? But you do have a dream team around you, board of directors, and their expertise becomes your track record, essentially. Why would financial institutions lend us money, especially for the first acquisition? Well, if you keep the former owner involved, there's continuity there. What if I get fired because my employer sees I'm no longer going to my job because seeking business deals?

2:55Okay, well, that can happen, absolutely. So be smart about what you do on LinkedIn, who you have as friends on LinkedIn. You can turn off notifications, et cetera, et cetera. But yes, that is a risk. For some people, they look at that and say, well, I hope that happens. It'll make the decision easier for me. It's got some downside, though. How can I create a convincing company vision, mission, strategy without prior experience in doing it. What if my attempts make me look foolish? Well, if you have the right people around you, that won't happen usually. Experienced board members get plenty of paid board position offers, so why would they work for free for me?

3:38Well, if you think they're working for free, then you have a problem. If you think they're working for equity in a venture that they're going to help build and you're confident in that, then it's a different situation. Nobody I knew believed that it was possible to acquire businesses with little money down. We all believe that you have to have money to make money. Boy, that is really true. Seeing it done time and time again changed my thinking. Now I make owner financing a key part of the conversation. Amen. Thanks for all the videos. They help to stay the course. Okay. My biggest, Mr. Whipple, my biggest misconception was based on the idea that the financing should all be provided on the buyer's side.

4:23When I started this process, it never occurred to me that a motivated, boy, that's an important word, motivated seller can play a major role in the deal structure. With this in mind, I've adopted a broader mindset that deals are attainable if there is mutual willingness to move forward on closing a deal. Now, I see a lot more potential deals if the seller is truly motivated and fits my criteria. That last sentence is super important. You are looking for motivated sellers. Usually those are older, 60 years old and above, looking to transition, but motivated seller. That's what you're looking for, okay?

5:05Mr. Whipple, I didn't believe people would take me seriously. I didn't believe I would be able to talk numbers with people with finesse. I got a sales job two years ago with no training ever closed the first door I walked into my first day. Things I get nervous about now is not knowing enough of how to run the business after acquiring it. Well, if you surround yourself with good people, that will be easier. Mr. Whipple, for me, the hardest part was, is to convince sellers to sell their business throughout the process. I was scared of rejection and therefore was too soft, pleasing in communication throughout the deal.

5:43That resulted in trying to control outcomes of their decisions, which is not possible. I wanted to be too complete in providing information because of fear. Now I am much more confident in the deal processes after my first deal and do more deals now. I accept the losses as learning and are more free and therefore confident and attacking in the negotiations. The seller needs to know we are professionals and set the pace. It feels like I cracked the code and am now ready to scale up fast also for bigger deals. But do small deals until you're ready for big deals. Mr. Whipple, howdy. I thought a short, fat, nervous, nice person with sweaty palms that has a disability and also is a minority could not get this done.

6:36But through personal growth, he's got a sense of humor, and Napoleon Hill Foundation inspiration, I feel that I can grow past these speed bumps. While I have not completely crossed all the speed bumps of doubt, I remain optimistic that I will achieve what I want through sheer strength and power of positivity and determination, Basically, listening to your courses and podcasts continues to enforce that belief. I truly appreciate your support, and you are an amazing inspiration. Thank you so much, Mr. Whipple. Well, you are very welcome. Hi, Bruce. Alternative fee arrangements with outside legal and accounting.

7:14A close second would be attaining financing. I now know that both are absolutely possible. Maybe, not easy, but definitely possible. Hi Bruce, hope all is great. Yeah, everything's good. I was afraid that I wasn't cognitively at the level of the big hitters I was reaching out to, and I would look and feel stupid. The lesson was that they are generally not that impressive or intimidating on a mental level, but they had just earned their wisdom from experience and taking action. Every conversation I have grows my experience and increases my wisdom. Essentially, I absorb it from them. I'm not afraid of reaching out.

7:59Just are hungry for more of it. Good for you. Okay. Good afternoon, Mr. Whipple. In response to your email, what things were you afraid of or didn't believe were possible that you now see as possible and now have taught yourself that those fears or doubts were wrong? So I just read you what I said to these people to respond to. It took a coincident, unrelated interview of a retired four-star general saying that the thing they missed most was being in command and being kept informed to realize that we really can provide things of interest to our board members. I might have intellectually understood it, but had not been able to fully understand it and been able to execute on the knowledge.

8:51So yeah, high-performance people, especially when they're retired, usually are looking for something to do. And so this gives them something that they feel that they can contribute. Mr. Whipple, I've completed 14 transactions in the past six years. Currently, I'm 36. And now what I was most afraid of was self-doubt, not being enough in making an improper investment decision deploying capital. I realized now it was the story I told myself internally. Great lesson there. The acronym of fear, false expectations appearing real. But I prefer him talking. Fear, face everything and rise. I think, what's the alternative?

9:38A quiet life through the corporate drudgery? I'm learning the universe seemingly works at a snail's pace, but with repetitive action that is the mother of all skill. Mr. Whipple, before starting the process, I thought the market was oversaturated with all the professionals and sellers and that they'd all heard it before. It's been easy to acquire professionals and talk to people, especially when you follow the steps. Yeah, follow the steps. That's the reason I put together that acquisition advantage boot camp. Hi Bruce. Building a board of directors with a chairman was the first thing I was afraid of and thought not possible.

10:20When I initially heard a dream team was required, a voice went off in my head saying, you can't do this, forget about it. Initially, I did forget about it for some time. I would say to myself, why would a chairman want to work with you? Why would accountants want to be on your board. You are nothing compared to them. These are negative thoughts that would run through my mind daily. But after reading Release Your Breaks and watching some of your content on limiting beliefs, I realized that is what I was suffering from, a lack of confidence and belief. When we limit our beliefs, we limit our potential and what we're truly capable of.

11:00Thank you, Bruce, for helping me believe. Well, I might have helped you, but you taught yourself to believe. But a lot of people have that same issue. They're afraid of what's going to happen. They're not going to be accepted. And what they realize is that in time, it's hard to find good mentees. So if you're a good mentee, you're going to attract some people. Okay.

11:27Mr. Whipple, I had this one myth debunked recently, that it is that one has to be a citizen of the United States to get SBA financing. Yes, you can be a non-citizen as long as you've got some of the requirements, residency, et cetera, and own 51 percent. But yes, that's something that an awful lot of people don't realize about SBA financing, so thank you. Dear Mr. Whipple, the first thing off the top of my head is the following. Fear number one, I thought there were infinite regulations in almost every field, almost completely insurmountable for small players to overcome. Truth number one, no, you can get an experienced international law firm acquisition lawyer specializing in your field health care on the board in exchange for free founders equity.

12:18Indeed, you can. Fear number two, 90 % of businesses fail. Truth, buy revenue that's already a working business in concept. Good point. Fear number three, you have to be a socialite to financially reach upper middle class small business owners. Truth number three, no. In fact, that is often wasted time you can use on cold calls or talking to banks and accounting firms that often bring you deals when they see you get deals done while keeping acquired companies profitable. Great point there. Hello, Bruce. I hope you're well. Yes, I am. Thanks for the opportunity to provide the information. My remarks.

13:03I did not know it was possible to do something like seller's finance. I did not think it was possible to have highly accomplished professionals being on the board. My company, since my company had no track record. I was afraid of legal implications related to contracting consultants on deferred rolled up fees. Okay. He learned that those were not true. Very simple. Why would someone want to sell their successful business? They must be something not right if they're selling. Then I learned about all the baby boomers planning their retirements. Just completed our first acquisition last week and going through the transition.

13:42Okay.

13:48A lot of these tend to be the same. So I'm skipping over those and going through paper and that's why there's a slight delay here. Okay. I did not believe it was possible for business owners to agree to sell their company to me or that the board would agree to follow me on this journey. The biggest surprise was how much time and work people are willing to put in to help you achieve your dreams. I followed the steps, and all these fears and doubts vanished. It was a rapid change and humbling experience. Good for you. Regarding your question, Mr. Whipple, I'm not good enough. I don't have time. There are no opportunities in a slow economy.

14:30I'm too old. I don't have time to catch up. I'm used to losing, and I don't have a winning mentality. I don't have the personality to be a good salesman. Best wishes. Okay. There's a lot there. So that is a great example, and I hope he's making progress on it, that self-esteem, self-image, confidence, really important. And all of those show a lack of self-image, self-esteem, and confidence. Those typically get better when you go through them. Okay. A few things come to mind, Mr. Whipple. Talking to people. So he was scared to talk to people. The posting on LinkedIn and what others would think.

15:15I'm not sure why, but I had a big block on posting and even friending people. Interesting. Screwing it up, misspeaking, ruining my chance. You are going to make mistakes, just realize that. Picking the wrong thing and wasting time. There is no perfect industry. So I just needed the belief that this is for me, and this model works, and it's the best model for building wealth. The biggest breakthrough for me came from board development, just the idea of connecting with people who I thought were successful or powerful, and that I assumed were unreachable. As soon as I started developing a new network, doors opened that I couldn't imagine.

15:57Yeah, you hang around with different people, and they have different experiences and different networks. I'm afraid of not getting anyone on the board after doing everything I'm supposed to do, and that for some reason. But I make consistent and thoughtful outreach, and I've gotten everybody. I should add that it makes a particularly big difference when I go to change a very important affirmation. So here he talks about looking at his affirmations every once in a while, making sure they're still current, and making sure that they're still exciting. So I realize this is a longer podcast than normal.

16:36I still could be reading comments, what people thought, but I hope you take away from this that the fears, the doubts you have are normal. And most of these people that have achieved something had those. Also, as Napoleon Hill said, negative thoughts are like weeds in a garden. They just grow. But you get better at pulling them out, putting them aside, and replacing that negative thought with a more positive thought. So know what to do. Know the steps. Go to BruceWhipple.com. Get the Acquisition Advantage Boot Camp. Those will go through the steps and have templates on how to do them. If you're struggling with an industry, I just put up a course on how to select an industry.

17:23And one of the things that this process showed me was that universally, people have things that they think are going to be a problem that turn out not to be a problem. And that comment that I've made a lot, 95 % of the stuff you worry about is never going to happen. And if you doubt that, keep a list of the things you're worried about. And then in a week, a day, a month, whatever it is, go back and look at that list. And I think you're going to find, oh, didn't happen. Oh, didn't happen. Oh, didn't happen. So that is part two of Bullshit, Debunking the Myths of Business Acquisition. If you're looking for conversation starters, you can go over to BruceWupper.com and grab the free course that has templates in it.

18:15if you want to go there directly, just brucewhipple.com forward slash free course. But I'd be really interested to hear your comments and whether you share some of the same things. And has this helped you to get in the game, which ultimately is what's required. Know what to do, but then there's no substitute for taking action and continuing to take action. That's what the most successful people do.