Welcome to this special report on how to grow your business empire by acquiring profitable
businesses using other people’s money. By the end, you will see how possible it can be to
literally double the size of your business in a day — the day you buy another business and
combine it with your existing entity.
As a business owner, you’ve likely heard the saying, “You’re either growing or you’re dying.”
So how do you grow?
1. You can grow organically by securing new clients, developing more products and
increasing the lifetime value of your existing customers.
2. You can grow via partnerships by promoting your goods and services to other
businesses’s customers (and vice versa) while sharing a portion of the revenues.
3. You can grow through acquisition by purchasing another profitable business that has
already gone through the work of building, finding and developing new customers,
products and services.
The technical term for buying another business and combining it with your own is called a “bolton acquisition.” And this type of acquisition can work for any business in any sector.
For example, say you own a brick-and-mortar electrical contracting business. You can buy a
competitor and double your market share. Or you own an online business… you can acquire
another one, perhaps even buy one with different products and then cross-sell products between
the two. Or you own a PR firm… you can buy another one in a different location to expand your
footprint or buy a complementary business like IT services or marketing to expand your offerings.
Acquiring a business is almost like buying a house. You find a business that you like, evaluate it
via due diligence and negotiate a deal.
But that’s where the similarities end. If you buy a house, you pay the seller the full negotiated
amount at closing. You may pay some cash and supplement the rest with external financing, but
100% of the purchase price gets paid at closing, with very few exceptions.
For a business, you don’t have to pay the full price at closing. And it’s very rare that any buyer
pays the full 100%.
In fact, it’s quite possible to pay nothing at closing and instead pay the full consideration as
future payments. The truly remarkable thing is all or part of this can be contingent on sales,
profits or another measure. But typically, the purchase ends up a mix of some cash at closing
with the balance paid over time in the form of yearly, quarterly or monthly payments. These
payments can be fixed or contingent on performance.
Even more exciting is that you can often raise financing against the assets and profits of the
business you are buying, which means you can readily acquire a business without spending
any of your personal capital. You can even make money out of the deal at closing if the money
you raise is greater than the closing payment and what’s needed for you to operate and grow it.
So ask yourself this question: If you want to grow your existing business by acquiring another
one, what would one of those businesses look like?
Well, there are three primary types of acquisitions. You can:
1. Buy a competitor. You can acquire another business just like yours, increase your
market share and generate economies of scale in your cost base. Assuming your current
business and acquired business are roughly the same size, your revenues will double but
your profits will MORE than double due to the cost synergies you will realize.
2. Vertically integrate in your niche. Say for example you own a business that makes
components. You can buy a business in your supply chain that provides the parts for those
components. You can also buy your customer, the end user. In doing so, you control three
parts of the supply chain that can help maximize revenue, profit and power in your industry.
3. Enter a complementary market. Take a look at what other products and services your
core customers also typically buy. Go buy one of those types of businesses and capture
more of your customers’ overall budgets.
Best of all, you can buy any one of those types of businesses using none of your own money.
Here’s how I kno
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