Risks each other. It's gradual. The transition is gradual. Maybe you're not a good case because the, the, the Visa green card situation was this other factor. But overall, elaborate on that model and to the, the extent to which listeners might try to work out similar agreements with owners.
Acquiring Minds
Buying $1.5m of Earnings Without an SBA Loan
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Yeah, no, that's. And, and, and, you know, I mean, in, in my case, it was somewhat unique. But you, you think about it from the seller's standpoint, right? And, and as you as you mentioned de risking themselves is a, is a massive one when it comes to legacy.
They they often feel like and Sturz was is a 40 year old business. The and the kind of the context there in that point in time the owner was, was, was outside of the business. He lived about two hours away from the business and he had put some of his, his family in place to help run it.
And so his real need was he needed an operator and needs needed someone that he could trust. And over time, you know that was, that was the goal. So that was the, the real, the real kind of impetus to the relationship starting.
We both had, had had kind of a symbiotic, you know, need on what we wanted. I wanted to run a business and he needed me. And you know, the issue there is you, you go into these relationships thinking it will work out.
I think the biggest challenge in these relationships working out is, is the, the lack of control that one has when you don't do that deal up front. And so you really need a very special seller owner to give over the reins without those, without the buyer having any legal recourse or structural, you know, agreement in place beforehand. It's kind of just a handshake deal.
And so that was challenging over the, over the two years and partly why why it wasn't successful. But I've spoken to a lot of searchers. Well how do you even come across those deals?
And it's really difficult because you got to earn the trust to even think about that idea of letting someone else who you don't know run the business if you don't put an agreement in upfront.
And I would caution these deals as well because the biggest downside is for the searcher or the buyer because the owner has some guardrails in the sense that if the business starts declining or hopefully they have enough context or insight into that if it starts declining, they can pull the plug. So the power dynamics are not really well balanced from that standpoint, which makes it really…
However, in my case thinking back, it was the greatest thing because it gave me Runway to learn the business, learn the trades, make mistakes in a relatively risk free environment.
Well and, and I would say that that is a, is a great bear case of this path. A lot of people listening will say yeah, even if I it doesn't end up working out with this owner seller that I become the successor, the buyer of their business, I will have gotten Two years running a small business. And so I will have gained all of that experience which will be valuable for me as an operator.
Will be valuable for me going out back into the market, looking for another business and communicating with and sellers and, and, and selling myself as a viable operator of their buyer of their business. So there's def, and you're being paid all the while, right? I mean this is a job.
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