Is This A Smart Way To Aquire A Business?

[Music] brought to you by the Every Dollar app. Start budgeting for free today. >> So, I work or worked as a digital product manager for the last eight plus years. Uh just within like the tech industry. Um unfortunately, uh in beginning of March, uh our company did a bunch of layoffs and I was I was a part of that cut. Um and so as of March, um I have been unemployed. um looking for for for work and in the meantime uh we've been living off of our savings. Uh we don't have any sort of big payments like car payments uh or anything like that. >> Why aren't you freelancing? >> Payments are >> If you're a digital project manager, you ought to be covered up in freelance work. >> Um it that has not been the case for me. I've I've I've been I've been applying doing my best to find a work, but it it just hasn't been um it just hasn't been working out for me to to to find >> Well, I mean, how are your buddies that are freelancing getting work as a freelance? I'm not talking about a new job. I'm talking about just freelancing, >> right? So, I my specialty is product management. So, I help companies develop software and scale uh some of their products. So, usually it's not necessarily freelance. it would be, you know, anywhere from like a year plus a gig um to get those. So the there there are very few short-term uh freelance gigs for product management that I've been able to come across. >> Okay. I don't I wouldn't doubt that. That does we've got because we've got digital project managers on our team here and I know what they do. So um I'm not arguing that point. So yeah, you're right. It's not like you're >> um you know short-term project where you're writing code or something because that's not what you do. >> Yeah. >> All right. Um, yeah. >> Okay. So, on to your question. I got I got your picture. You're struggling finding work. I got it. Okay. >> Yeah. Yeah. So, um, in the meantime, uh, as mentioned, we've been living off of savings. Um, in Canada, we have things like, uh, employment insurance here, but I've been also, um, helping do, uh, random jobs, um, for folks like uh, house pressure washing, floating dock installations, and so forth. Just >> Good for you. >> Kind of uh, keep me going. Um, now there is this gentleman that I came across and I've been helping him with floating dock installations. He is 74 years old. He's been running a business for 16 years now and he is looking to retire and sell that business. >> Mhm. >> So, I thought it might be a good idea for me to um look into acquiring that business. Um, I've I've done several doc installations like it's not necessarily rocket science. Nope. Um and um yeah uh he as mentioned he's 74. He doesn't do any sort of outside marketing. All of the leads that he gets are from the actual manufacturer or folks who find um uh the the manufacturer online. They fill out a form. He's a regional dealer here in Canada. And so he just gets all of his uh incoming leads through those forms. So he doesn't do any personal Google ads or any sort of uh forms of advertising. And so with a digital background, I'm thinking of ways how this could scale and how I could use my skills to scale the business. >> Okay. So you want to talk to him about buying it? I got it. Okay. So what are we going to do? >> Yeah. Uh so so he uh initially wants um uh 300,000 for the business. The business is net profiting annually uh in around 100k a year. >> Um >> after he pays himself a salary. >> No. So he is an owner operator. >> I know, but I mean some owner operators have enough sense to pay themselves a salary. So he's not Okay. All right. And so he's not really netting 100k cuz if he paid a manager to do the work that he's doing, he'd be netting 50 or 40. >> Correct. Yes. >> Yeah. It's not worth 300. >> Okay. So that would that was my my initial thought process as well. Yeah. Um, and so I've I've I've brought it up to him, but I talked to him about uh potentially acquiring acquiring the business through seller financing. >> Um, which he seemed initially open to, but because after he talked to his wife, because he's 74, he's kind of driving into the sunset basically. um he wants a certain amount up front, like $100,000 uh up front as well, >> which is probably about all the whole thing's worth anyway, >> which was my my guess as well. Um so I currently do not have the funds to to give him even 100k for the business, right? Um because I do not want to put my family into any further financial uh uncertainty. And so >> you don't have but you don't have you don't have the money anyway. >> Hey, it's George. That's right. I've been here the whole time just creeping. Kind of like the creepy spammers and scammers out there using and selling your personal data. Not cool, guys. Not cool. And that's why you need to check out Delete Me. 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And so they offered to sell that property and give some of that uh some of that money towards acquiring this business should uh the seller and I reach uh reach a deal. And so I wanted to get you 100 grand. >> Not 100 grand. it would be about 50,000. >> So, where are you going to get the other 50,000? You don't have it. >> I don't have it. Um, and so this is where I would either need to come up with some creative way with the seller or negotiate with him on on the down payment. Um, >> it's not a down payment, it's a payment. >> A down payment implies that there's a balance left. >> If you put 50 down and he finances 50, that's fine. But that's a long way from 300 and him riding off in an RV. Correct. >> I don't think you're getting this deal. You're too far apart on price and terms. And your parents are giving you this money. It's not a loan. >> So >> Oh, you just lied. Okay. >> Here's my worry for you, brother. There are there are some strings attached to it. Yes. >> Yeah. No, there's too much desperation in this. As soon as I get desperate, I get stupid. and you're pushing this from every corner of the table to make this tablecloth fit and it's not going to fit. Um, so, um, I I liked where we were going in general. Um, and I love the fact that you're willing to do anything to try to feed your family from pressure washing to loading dock installs to freelance to getting another job, anything. But let's don't get too desperate to be in the loading dock business to where we've got people pulling us from every side. We got the former owners pulling us. We got mama pulling us. Everybody's pulling our hair out. We're going to be bald, man. Don't do it. >> What stops you from just starting this on your own? >> He doesn't have all the dealership connections. >> Ah, okay. >> This guy owns This guy owns the territory. >> He owns the territory. Correct. Yeah. >> Yeah. Yeah. It's harder. Um, but I mean, you can go build decks on the backs of houses or something. I Alex, I'm going to tell you this is I I be careful when you have to force something from every corner of the table to make it work. There's nothing in this entire story that was a hot knife through butter. There's, you know, you got you got stuff coming at you from every angle telling you not to do this. And that's not just God challenging you. It's him telling you don't do it. There's a difference. And my fear for you, Alex, you have already done the the digital marketing math in your head and you've already spent the money that you think you will make on top of this business. No, you don't you don't pay somebody for what you might grow it to. >> You pay it for pay them for what it is. >> And right now it is a business that's worth somewhere around 150 200k max, not 300. And um and he's not got any other buyers. I don't care what his wife thinks. Dave, what I'm asking you this and you should be asking me, but I'm asking you. What is the psychology behind? So, let's say this guy says, "I make 100 grand." And Alex here says, "Man, if I digitally market this, I can scale it and do this and this and this. I can make 500 grand next year." If he doesn't do this deal, his mind and body will feel like he just lost half a million dollars. You know what I mean? >> Yeah. It's just FOMO. It's just fear of missing out. It's all it is. But there's this weird thing in our heads. We make up a number and if anything less than that number, we feel like we're getting ripped off and we lost it. >> Yeah. >> And it's just it's it's a it's a strange loss. >> You know, one time I put an unrealistic price on a piece of real estate, really high >> and then when a guy came in under that, I was like pissed. >> He took 500 grand from me. I was like, "No, I was unrealistically priced to start with." Or if you fishing for a California sucker fish, you know, I'm going to give you a raise. Come on my office and you gave me 100 grand. But in my head, I thought I was going to be 200. like that dude took the 100 grand from me today. >> Exactly. That's >> so crazy. >> It's a It's a Bassackwards thing, but that's the way it is. So, no. Yeah. Honey, I listen. I love business and I love your entrepreneur skills and I love your um your work ethic and your willingness to humble yourself and go do whatever it takes to get something going. You're a good man. You're going to find something. But don't step up in a bear trap in the process. And this smells like bear spray to me. Create your free every dollar budget today. The simplest way to budget for your