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

START HERE – Read this article first if you’re looking for a way to create capital gains from buying distressed businesses

By on August 19, 2014

This web site is written for the rare entrepreneur…

That is curious about buying a distressed company for little or no cash and doing a turn around.

Want’s to know how to ‘roll-up’ their weak competitors to get new clients cheaper then organic growth.

Who is thinking of a start up but wants to know if buying an existing business as a ‘jump-off’ platform makes more sense.

Looking for revenue opportunities as a supporting service in the small business M&A field

Who MUST create a retirement income QUICK. (My personal reason for doing M&A work)

That wants to know how Buffet, Branson, Gates, Romney and others we read about in the WSJ got started.

In this article, and on this web site, you will see the 12 easiest ways M&A will create income and wealth for entrepreneurs with little or no cash UP FRONT.  If you like the concept and want to learn the exact steps my wife and I have taken as well as the 23 other members in our Big Book Club (people who are doing it) then we invite you to attend an upcoming workshop where you will sit with entrepreneurs just like you, who are buying – fixing and selling distressed companies.

But First – why are you so RARE?

Because almost no one knows about M&A in the small business arena.  Even fewer take the steps to learn from others that are creating wealth.  Fewer still will ever talk to a business owner who is failing and give them a way out.  It seems like we’re almost a secret society.  Yet the opportunities are everywhere.  In the USA, UK, Australia, NZ, and Canada 2,500,000 companies go out of business every year.  About 10% of those are worth saving and another 60% to 70% have ‘off balance’ sheet assets that you can repurpose  at a profit.  Yet the vast majority of these companies just fade away, because no one knew enough to ask.

In our own career,  we did our first deal when I was just 16 years old, back in 1969.   But since the fall of 2012, working part time, my wife and I have bought, owned or taken control of five small businesses.  As of today our average capital gains on these 5 ‘deals’ is in the $200,000 range, each. On top of that we have made a total monthly income bouncing between $18,000 and $30,000. Income earned from the daily operations, while we got the companies ready to sell.   Some of these firms we will not sell.  Now that I am over 60 we are looking at building long term income streams that we can retire on.

Now these are my results and I have no idea or prediction on what you will be able to do.   There are no guarantees in life and I am making NO claims as to your success.  However, this concept has worked for us and it has worked for many of our workshop attendees.  As you know,  this disclaimer is necessary in our litigious society.  LOL.   I do know that over 2.5 million businesses close each year and that many are viable candidates for the find, fix and sell process.

Once you’ve read the 12 easiest ways to create income and net worth in M&A – we invite you to attend our next workshop where you will meet others ‘doing it’ today.

 

Here are the 12 best ideas on generating monthly income and creating wealth from our 45 years of experience.

Buying out your competitors: If you are already in business, start meeting everyone else in the same business in town. In any given year about 20% of your competitors are going to close or have hit on hard times and need help right now.

We have a staff person set up lunch meetings and she gets us an appointment with about half the people she calls.   During lunch we use a simple series of leading questions to figure out if we have an acquisition target. If it looks positive we ask for a second meeting to review the idea further.

Do the leg work for a fee: Every smart business owner knows it’s a good strategic move to buy out your competitors but they simply don’t have the time. We offer a $10,000 service package to other owners to help find the right deals and bring the two parties together for negotiations. This is a great way to learn M&A by simply calling your clients 100 or 200 competitors in town to start the ball rolling.

Buying an existing healthy business as a platform for bringing your ‘hot new idea’ to market: When we discover a new product idea that is so hot we have to move on it, we NEVER do a startup. It is far easier to buy an existing business with similar customers or business philosophy.   You’ll have a team and cash flow on day one and save yourself six to twelve months of leg work.

Finding a distressed business that you can buy cheap and sell large: Every year over 2 million companies close the doors.   About 10% of those are worth saving if the right person could get in and take charge. These are some of the best deals we can do. Once we fix a distressed business we immediately start buying the competitors.

Off Balance Sheet Assets: From time to time we get into a business that we don’t want. They are going to close. So if appropriate we may make a deal to buy the customer list and employee roster for ‘walk away money.’ These list are highly valuable to the competitors in town and can be sold for tens of thousands of dollars.   We ALWAYS have the list sold before we buy.

Liquidation assistance: If you love sales and project based income streams – helping a company sell off assets by auction or closing the door sales can be a great side line business. You can hire an auction company to do the actual sale.

Buying healthy companies with owner financing. Since the ‘sale price multiple’ is at an all-time low for buying an existing business and no one seems to want what we call ‘old guy dirty businesses’ like pallet manufacturing or trash hauling we find these to be great cash cows that we can get into with little up-front money.   The idea is to get owner financing on 66% of the sale price and then to borrow against the company assets to raise the other 1/3.   That gets you into a going concern with no cash out of pocket. The secret to keep your future debt service below 50% (1/3 is better) of the current net profit so you won’t run into trouble a few months from now. Paying higher interest in order to get better terms is a good trade off.   That’s because we’ll show you how to double the profits in the business soon after you take over.

Retire on a stable of cash cow companies. This is our personal goal. My wife and I can retire when we feel we have $25,000 a month of dependable monthly income from our several businesses.   My financial planner tells me that I need over six million in cash to generate a dependable income of that level. I have found that owning 5 companies paying me $1,200 a week as the owner is a lot easier to pull off.

Providing services as an accountant to the small business M&A: If you’re an accountant or bookkeeper you can also sell a bevy of services to the firm that is thinking of buying a competitor or selling after a lifetime of work. These services include valuations, loan packaging, tax planning and the easiest of all ‘bird dogging’ deals at $10,000 a client.   On top of that the accountant or bookkeeper can clean up old accounting records (a must if you are a seller) and provide ongoing outsourced bookkeeping services to your clients.

Providing services as a business coach: The business coach can provide a series of services as well such as bird dogging for deals, assisting in the transition planning, business process planning and connecting other partners.

Business Brokers: Most brokers have to turn down 75% of the deals that come to them because the business is not saleable.   These leads could easily be turned over to a local person who loves the distressed business.   Then get paid on the back end when a deal is made.

Business lawyers: The local business lawyer of course can handle contracts and negotiations, but they may also be able to assist in the financing of bigger deals. Except for ‘walk away’ off balance sheet asset buy’s we use an attorney on every deal to review the contracts and unforeseen liabilities.

Summary: M&A offer the biggest opportunity for rapid wealth creation that we’ve ever participated in. If you are fearful of not having enough money or experience to participate then consider offering ‘bird dogging’ services or bringing in partners for your first deal or two.

Attending one of our upcoming seminars on M&A in the small business market will put you in the room with others that may well have the answers and motivation you need to open this lucrative field for yourself.

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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