Tip:
Highlight text to annotate it
X
For years, I have been know as Mr. LBO
LBO meaning leveraged buyout
and it's basically how do you use
the assets and the cash flow of a company
that you like to acquire
to create all the resources that it
takes to acquire it.
And every business you would
want to acquire has some cash flow
and it has some assets and they
are all financeable even in today's
market place and it's just how do
you go about it and how do you find
that money how do you leverage it?
How do you make it irresistible for
the people that you want to put up
the funds to put up those funds for you?
All those things are very doable
and I spend the last 30 years
actually training people in exactly
how to do that.
The reason that this is such an important
methodology right now to grow your business
is if you think about this
you can double, triple, quadruple
the size of your company
in a relatively short time by
external growth. Internally, it you try
to build your business that fast it's very
difficult because most companies find it
even to grow at 15 or 20 percent per year.
But if you buy out your major competitor and
they're the same size as you are, in a matter
of a few months, you've doubled the size of
your company and in today's market place, you
are actually going to have the opportunity to
buy not just one company but several. Think
about this, I mean this is incredible,
this decade will see the largest transfer
of wealth and power in human history as
baby boomer owned businesses are transferred
to the next generation. I mean, you got
7,000 baby boomers every day who are reaching
retirement age, 3 percent of them approximately
own significant businesses, that's about 210
and then 17 percent of those companies
are being transferred to the owner's children
or grandkids, so that means that 83 percent
or 174 money making companies are being put up
for sale every day. And the thing about this
that's shocking is 75 percent of these companies
never get sold and that's 131 good companies that
are going to end up getting liquidated every day
because there aren't enough qualified buyers out
there. And by qualified buyers, I mean, people
who have a sense of what it takes to buy a
company, how do you arrange the financing,
where does the money come from to make the
purchase and how do you put all those pieces
together and negotiate it and execute it.
And it's really isn't that difficult.
Is just a matter of know-how.
If you don't know it, you don't know it.
But if you know it, it's not that difficult
And so there is a phenomenal opportunity for
Any younger to middle age person in business
today to radically build their company and
to do it through leverage buyouts.