E215: Guiding Entrepreneurs: David Barnett's Comprehensive Approach to Buying and Selling Businesses

How2Exit: Buy, Don't Build - M&A of Small Businesses

Watch Here: https://youtu.be/bAiRz22YEBs

About the Guest(s):
David Barnett is an experienced entrepreneur, consultant, author, and educator in buying, selling, and financing small and medium-sized businesses. With a background in sales and business education, he owned a business broker office before moving into banking. Since 2015, he has provided consultancy services for business transactions. Barnett shares his expertise through a YouTube channel and has written multiple books on investing, franchising, and buy-sell strategies, with a new book releasing this fall.
Episode Summary:
In the latest How2Exit podcast, host Ronald Skelton welcomes back David Barnett, an expert in small and medium-sized business transactions. They discuss the risks of over-leveraging in business acquisitions and offer insights on mastering business deals without financial pitfalls. Barnett shares his knowledge on proper business leverage, the impact of SBA interventions, and the challenges of buying a business with minimal down payment. He contrasts debt-equity structures in large companies with the small business sector and emphasizes prudence, long-term planning, and cash flow management for successful business purchases.
Key Takeaways:

• Typical leverage for large public companies is between 50-60% debt; anything higher is considered risky.
• Zero-down deals are often more achievable by experienced individuals with substantial resources, not beginners with limited capital.
• Relationships, trust, and a strong personal network are crucial when seeking investments in your business endeavors.
• Minority equity holders in small businesses may face significant risks without majority control.
• Prudent financial management and an understanding of potential business hazards are essential before taking on leverage.

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Contact David on
Linkedin: https://www.linkedin.com/in/davidbarnettmoncton/
Website: https://www.davidcbarnett.com/
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How2Exit Joins IT ExchangeNet's Channel Partner Network!
-Why IT ExchangeNet?
Since 1998, IT ExchangeNet has created $5 billion in value by selling more than 225 IT businesses in 20 countries. IT ExchangeNet works exclusively with IT-enabled businesses generating between $5M and $30M who are ready to be sold, and M&A decision-makers who are ready to buy. For over 25 years IT ExchangeNet has developed industry knowledge that helps them determine whether a seller is a good fit for their buyers before making a match.
"Out of all of the brokers I've met, this team has the most experience and I believe the best ability to get IT service businesses sold at the best price" - Ron Skelton The
IT ExchangeNet M&A Marketplace we partnered with has a proprietary database of 50,000+ global buyers seeking IT Services firms, MSPs, MSSPs, Software-as-a-Service platforms, and channel partners in the Microsoft, Oracle, ServiceNow, and Salesforce space.
If you are interested in learning more about the process and current market valuations, complete the contact form and we’ll respond within one business day. Everything is kept confidential.
Are you interested in what your business may be worth? Unlock the value of your IT Services firm, visit https://www.itexchangenet.com/marketplace-how2exit and complete the contact form.
Our partnership with IT ExchangeNet focuses on deals above $5M in value. If you are looking to buy or sell a tech business below the $5M mark, we recommend Flippa.
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▶️Previous Episode: E213: Ujwal Velagapudi: Buying Unique Businesses and Building a Diverse Portfolio - https://youtu.be/h0j-pszDqAM
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