How to buy and turn around a
distressed business or 'roll-up' competitors

On this site you’ll read real life stories of how 23 entrepreneurs find, fix and then sell small companies on the edge of failure. Sometimes we buy our weak competitors in a roll-up and get new clients cheaper by acquisition then organic growth. If you like these concepts, come to the next workshop. Learn how we...

✓  Find distressed companies that are worth saving for capital gains
✓  "Roll-up" your competitors for rapid growth with little cash or risk  
✓  Why buying a distressed business is the BEST way to do a start up

From KC Truby Lonesome Cowboy Publishing Inc. 301 Thelma Drive #426, Casper WY 82609 (760) 207-6385

Baby Boomers are creating our best business opportunity in history

By on July 7, 2014
business opportunity

Baby Boomers are creating our best business opportunity in history

 

In 2010 a demographic shift started that opens some of the best business opportunity situations we have seen in our 44 years of buying a business, fixing it up and then reselling for capital gains.

 

In the USA alone, over 10,000 people a day have hit retirement age. This is the biggest movement to retirement in the history of the world. About 800 of those 10,000 own a business and are ready to sell now.   That’s 800 companies a day that will transfer to the children, sell on the open market or close the doors because the owner did not plan an exit strategy. That is a lot of pent up business opportunity for the small business buyer.

 

“This is a landmark moment in our generational development,” said Patrick Ungashick, president of White Horse Advisors, and author of “Dancing in the End Zone: The Business Owner’s Exit Planning Playbook.” According to Mr. Ungashick, 9 million of America’s 15 million business owners were born in or before 1964, resulting in one business owner turning 65 every 57 seconds — and the potential for a tsunami of businesses for sale.*

 

The trend is worldwide, but we are only going to look at USA numbers in this article. The flooding of the market with company for sale signs is one of the main reasons the average multiple that a small business sells for today is 2.5 times past earnings.   That is the lowest multiple, ever. Especially if we can arrange owner financing on five year terms. That gives you positive cash flow almost immediately.

 

But the glut of business for sale signs is not the only factor driving down prices right now.   For the last five years the entrepreneurial spirit in the US has hit an all-time low. Fewer companies are starting up today than at any time in the past 60 years. People no longer see business ownership as the fast track to financial independence.

 

A large part of the doom and gloom can be traced to the recession that despite what our politicians tell us, continues to hammer the smaller business.   Especially the lack of access to capital and the burdensome regulatory environment we find ourselves in. Small business owners have never seen too much litigation, regulation and taxation.

 

The lack of buyers and the glut of sellers gives those who are looking for business opportunity in baby boomers selling out are at a distinct advantage. Prices are down, companies are taking longer to sell and buyers are scarce.

 

This combination of events is a rare situation that encourages me to look for even more deals. If I can buy a healthy company at 2.5 times earnings and land 5 year financing, I have enough cash flow left over to hire a great manager.   Then we can work together to cut overhead and build sales over our first year together.

 

*  text borrowed from Barbara Taylor

 

 

About KC Truby

From their ranch in Wyoming, KC and his wife Linnea have bought or started 21 companies as a side line to their accounting business leading them into M&A as a full time business in 2012. These companies are located all over the Western Rocky Mountains, London and India. Since 1969 through their accounting and training companies, KC has taught 18,000 business owners how to improve cash flow and find more customers by installing standardized systems in their small business. Since 1989 KC has presented over 1,000 seminars and training classes to the small business owner.

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