Deal qualification for small businesses

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hey guys Mohan poohbear here and today I'm going to talk about how to make small business deals work so many people ask me hey you know what mehran I want to get into the space of buying businesses maybe I should start with buying small businesses I want to sites like flippa.com and I realize you know what I can buy a company a website for like two thousand dollars and I can experiment on buying that business using my own money and I can see how that works and if that works well then I'll go out there and buy maybe bigger businesses and see how those works right and just grow myself as I go now the problem with that is that we site like sites like Flippa at least the last time that I saw most of the deals there are small I mean I don't think that you can buy a business there for more than like 100 or 200 thousand dollars and the problem with that is that and again that's just based on my experience and the things that I learned and I spent multiple six figures over the years on multiple mentors and pretty much any fingers you can think of is that when you buy a small business it's not a business that's the problem if you don't really buy yourself a business you're buying yourself most at a time have job inside of a business and that's the in my opinion that's the last thing you want to do I mean you just better start a business and be involved in the day-to-day I mean is it better than starting a business from scratch perhaps because maybe you saved yourself few months of work to beg to get to that point where you just have a business doing I don't 3 grand a month right maybe you set yourself few weeks or a few months but what you're doing you need to understand that when you're buying those small businesses first of all it will be really hard to get financing outside of using your personal capital because the financial institution or a bank where they're going to look at those small small businesses they're gonna see a lot of risk as well because I mean the smaller the business the more risky it is and that's why the bigger the business the more people are willing to pay for it so if you'll see the biggest companies out there like Facebook they're buying companies like Instagram for high multiples of profits or whatever the deal structure is because there is less risk because there are more assets in those businesses there are tons of employees a lot of technology in their space lots of customers so many assets that they can work with and the chances of a business like that to fail is much lower compared to you buying a small business on Flippa that is basically a one-man show and in my opinion the last thing you want to do if you want to be an entrepreneur is buy yourself a job inside of a business because and that's why I'm suggesting to people who are getting into this place who work with me is to go out there and find businesses between at least a million cells like not less than half a million a year in cells because at least based on what we found is that smaller businesses then that are basically businesses with people who pretty much have a job inside of their business it's kind of like a hobby that someone need to work a lot in to get paid in ok salary so and again there is nothing wrong if you want to have a job inside of a business and you'd like the idea of running the day-to-day but what I'm suggesting to you is that if you want to buy a business it's going to take you first of all probably the same amount of time and money to buy a very small business on Flippa versus it is to buy multi-million dollar business because when you buy like I said when you buy a site on flip a light so you put 50 grand of your own money to buy a website you can take that 50 grand and leverage it to buy a bigger business because when you have a bigger business they already have assets like cash flow like different assets on their balance sheet that you can leverage and then your 50 grand can be worth much more when you look at those bigger businesses and when you bag those bigger businesses you buying something established with an existing like I said list of lists of assets you buy yourself the business with employees who can run the day-to-day so you can step back and be that person who's overseen their business who is kind of like the owner investor the owner chairman there's one the person who's responsible for the vision for the strategy who's not responsible for the menial repeatable boring day - it might be a boring day today that is like doing this again and again and when you're able to buy something established like I said it's gonna take you the same amount of time and money to do that that's why I'm suggesting just going buy something that's already existing that's already making it listed millenarian sells and then I mean if you wanted to buy that website on Flippa because it looks exciting and interesting just go and buy a bigger business in the same sector and bring those exciting ideas to those businesses because you already have a list of clients and services that you can leverage from day one so I hope that makes sense because I mean I'm telling you I saw horror stories of people who bought an existing business like I had someone came to me a few days ago and I want to see how I can talk about it without letting go of details of the details of the person of the Orlan deal but he invested more than two hundred thousand dollars of his own money to buy a business because he heard and what he I mean what he heard and learned so far is that you gotta close your first deal as soon as possible now there's nothing wrong with that attitude you know what let's go it let's pull the trigger let's get those result but what I saw is that he spent so much money buying a business without the understanding of realizing if that deal is a good deal or not even so what happened in his case important business that isn't even likely like here's what he told me hey I paid so much money to buy that business and right now the business is losing a few thousand dollars every month that's what I found out after I bought that business so not only that I put all that money to buy that business now I need to inject more capital every month just to continue to trade that business otherwise I need to shut everything down and liquidate the business and fire all the employees and right now I don't know what to do I need to bring in a few thousand dollars every month just to continue to trade that business and pay salaries right I already spend hundreds of thousands of dollars to buy that business I just don't know what to do and I'm not even talking about him not getting paid at all whatsoever because there's no money in the deal so the idea of closing a deal just to close the deal I don't think it's worth it heck I mean think about it the last you want to do is get yourself into a shitty business because you're not gonna you're gonna end up with something that isn't paying you at all he's losing money every month plus you're spending so much time in doing something that you probably hate because you probably need to be there in the day to day because there's not enough cash flow to hire someone else to do the day to day for you that's why I think before everything before you go out there and look for businesses you gotta figure out what's your criteria what would be the ideal scenario for you and that's why when I'm about to talk to people and work with him the first thing I'm asking them or one of the first thing is let's put ourselves one year from today and I want you to literally put yourself twelve months from today and think with yourself what needs to happen for me to be truly satisfied and excited about my results assuming that I'm getting myself into this place of mine businesses is it you own a business what doing what how much the business is mean revenues how much the business is doing in profit how much money you want to take off the out of the business do you want to take that amount of money is it before taxes or after taxes do you want to be involved in the day-to-day or do you want to have someone running the day-to-day for you you want to step back and either just have a chill lifestyle or whatever or maybe do you want to go out there and do more deals and there's nothing wrong with either maybe you want to take a salary an additional amount of money but be there day-to-day and run at least your first business maybe you want to run it day to day maybe that's the you have an existing business and you want to grow yours by acquisitions so maybe the first bolt-on maybe you want to be involved in the in the merger of those two businesses and I guess help bring things together help with creating synergies and cross-selling opportunities it's all good there is no right or wrong here it's about you figuring out what would make you satisfied what will make you excited what will make you say to yourself in a year from today you know what I freaking love my life and I'm excited about waking up every single day think about it what needs to happen for you in a year from today for you to be truly happy and excited about your life in terms of we're talking right now in terms of business but you need to ask yourself those questions in terms of all of your areas of life about what your happiness about your health wealth love and happiness everything and ask yourself where do you want and then based on those girls then they can step back and figure out with yourself what are the actions that I mean you take in order to get myself into that step into that space of in from today this is what's gonna happen with my life and when you know your goals when you know exactly how much money you want to take what kind of lifestyle you want to live think with yourself do I have the strategy together do I know exactly step by step what do I need to do with the small details with the nuances I won't have a business doing X ok how do I reach out to those businesses do I know how to reach out do I know what's working right now in 2018 or 2019 in a bit right so figure out with yourself do I know the strategies do I have the right questions to ask those businesses maybe I don't want to buy business maybe I just want to start a business maybe I want to have a job I just want to work somewhere else and I don't want to have I don't want to have too many too many thoughts I don't want to I don't want to put myself in a space where I need to think too much I just want to work can up wake up every day do the same boring repeatable stuff go back to at home at 5:00 and watch Netflix all night I don't know that's ok there is no right or wrong guys there's no good or bad in life in my opinion but thinking to make it so whatever is working for you personally based on your beliefs based on your goals based on where you want to be in life for me personally I want to be the best version that I can be so waking up every day without feeling like I'm fulfilling my potential to the to the max I just won't be able to look myself in the mirror but are there people who are not like that obviously there aren't many and that's okay there's nothing wrong with that I fully respect it there are people who are just okay with waking up every day to the same job Drive in the same path every day making almost the same amount of money every month having the same lifestyle seeing the same people every day every week there is nothing wrong with that I think actually if you can find satisfaction in those things it's crucial that you are able to find satisfaction in the small things and bring us back to a different topic but if you can find satisfaction in the small things it's going to be really hard for you to find satisfaction in the big things like if you're not able to be grateful right now what you have it's going to be really hard for you to be grateful when you own a multi-million dollar business or one or two or ten businesses like that so you got to find fulfillment and happiness right now and be successful and feel successful right now and then take whatever action you can towards your goals and you'll see when you're going to end up with those goals it's going to feel either way very similar to what you're feeling now that's why focusing on what's going to make you feel good right now is crucial that's why it in my opinion it's a must for me to wake up every day and ask myself questions like what am i grateful for what am i proud of like a smile ask myself questions to bring me back into the state of fulfillment of being successful right now no matter what because if you can't find fulfillment and satisfaction right now you won't find it when you have 10 or 20 businesses you're just going to end up the same person with maybe more money in your bank account but you're gonna still end up sad and unfulfilled is it going to be better than now perhaps yes Paris perhaps not there's a video that I created of there are two ways to be unhappy one of them is to get what you want one of them is not to get what you want at least when you're not getting what you want you have some hope that when you get going to get what you want you're going to be happy but I can tell you it's all together you gotta be if in turn tears in the internal game of this world especially I'm talking business and there's the external and I believe that when everything is congruent and the internal is on fire and grateful and fulfilled and proud then to achieve the external is going to be much much easier and it's not going to come from a place of struggle when the internal is all messy and ungrateful and just miserable and always like negative and jealous then your external might get some results eventually if you're gonna hustle your way to the total result but when you get you're gonna get those results which going to take you it in my opinion ten times more ten times it's going to be harder more frustrating and exhausting and even when you're going to achieve those results it's not going to be as full feeling it's not gonna be fulfilling because you are the expense of what you are internally I fully believe in that so why won't you focus on your internal affairs change that and then the external will change as well so I know it's a bit all over the place this video but it brings us back to the idea and to summarize it that guy's a small deal it will take you as much time as it will to close a big deal so thing with yourself what deal do you want what work do I want to have in my day to day if I even want to have a work day today or maybe I just wanted to deals I like to be out there to talk to people be be art I like the art of the deal what other negotiate with people work on big deals come up with big creative ideas come up with big I like the big stuff because I want a call every call that I'm having I wanted to have a meaning I want to call to to be a potential million dollar business for me every call and I want to be I want every call to be different I want to do a deal and go out and do a different deal in a completely different industry potentially at least personally that what gets me excited be involved with many different awesome people exciting people you're talking to those business owners out there some of them exist for 10 20 years it's exciting you learn about someone who mastered something in their life there is nothing more exciting exciting in life adding then going out there and meeting people who are so immersed into their life and journey in their mastery and their craft and I think it's fascinating to work with those people and meet those people and create a win-win deal with all of those people that's what fuels me that's what gets me excited and I hope it will get you guys excited as well to potentially be involved in the space of bio businesses because most people don't know that it's even possible to do those deals they think that they need to start from scratch and have all those different things is it helpful is it good to know how to grow business organically one plan at a time I mean obviously every experience that you have in life will help you in this space but I don't think that it's necessary to start there you can learn the same lessons by buying something in existing and if you have the right strategy in the right understanding and the right way to keep your of safe then you can start you can basically jump your way past the startup phase and it will really really help you so yeah I really hope you enjoyed some of those freestyle videos guys I really have no notes here this literally black screen I don't know there's nobody or whatever I just think for whatever isn't that those videos with their laptop here it looks good but if it's not maybe I need to change it I don't even know so really let me know what you think eyes I really hope you enjoyed it subscribe to all of my social channels if you didn't yet and see somewhere below this video in the description or in the comments or something like we're gonna put links for some more free training if you want to watch more details on how to buy businesses a-to-z with the process with the nuances then go and link somewhere below this video and yeah that's it for today guys subscribe like comment all those things that you can do and share those videos with someone you think this can help because that's what I'm trying to do guys to put that message out there for people for them to get some value and hopefully get excited about the space of doing deals becoming a master of deal making if that makes sense because I think there's nothing so exciting in the space of businesses and I really hope that I can transfer that excitement and message to you guys so I hope you enjoyed it and I'll see you soon