Kathy: [00:00:00] hi, I’m Kathy rushing host of the podcast committed the entrepreneurial marriage. If your middle name is restless and you identify with words like innovator, dreamer, changemaker, creative. Independent or you are married to an entrepreneur or heaven help you, you’re both entrepreneurs. This podcast is for you.
The entrepreneurial journey can be a little wild at times like uncharted territory. Join me as I talk with others who are at various stages of the entrepreneurial process, we’ll explore the wisdom and insights they have gained while navigating the ups and downs of the entrepreneurial journey. You’ll discover that there are many couples who have found ways to thrive in both our marriage and business
Hey friends. I am joined by Mark today in the studio. We are going to do a series that is going to be different than anything we’ve done before, because we’re doing something that we’ve never done before. We are looking at buying a business. Yes. In the midst of a pandemic, we are looking at buying a business and we’ve had so many conversations about this.
And one day I was like, okay, we really should be recording this because it’s like pulling back the curtain on the mind of an entrepreneur and how they think, and we just thought it could be really helpful to kind of walk through the process with us, of what goes into buying a business, what you need to be asking.
And if you’re listening to this and you have bought a business before and you have some tips for us, we are all ears. So like I said, this is a first for us. And if we’ve learned anything in all of our years of doing business, it’s that there is a benefit to learning from other people who have done it.
So here we go. This is going to be a, a couple of episodes. Today, we’re going to be talking about- why aren’t we looking at buying a business? So thanks honey. For joining me.
Mark: [00:02:37] Thanks for inviting me.
Kathy: [00:02:38] Yes. Taking time out of your very busy schedule. So part of the reason he’s looking is because he needs a job y’all
Mark: [00:02:47] I need a job, just like a bird dog. I need a job.
Kathy: [00:02:51] So what prompted you to start talking about and thinking about buying a business?
Mark: [00:02:59] Well, I’ve been, I’ve always said that once I was kind of, either sold our current business or was out of it on a day-to-day basis, then I would do something else. I always thought I’d start something else. And I started reading a little bit and just hearing people talk about buying a business.
So I started digging into it. I’ve read two or three books. I’ve listened to hours and hours of podcasts. And as we’ve looked at what this last year has looked like. Our particular business, being a healthcare business, taking care of seniors, we’ve had some pretty serious impacts to our business.
Now we’ve been okay financially because we came into it in a good position, but it has been challenging. And it’s just raised again, the issue of, okay, what’s what does the next 20 or 30 years look like for us?
Kathy: [00:03:55] We hope we have that many.
Mark: [00:03:56] We hope we have that many. One of our neighbors said you got to plan for that many.
Right. And so trying to just put my arms around what is the best way for us to go forward, to add more streams of revenue to kind of diversify what we have. And part of it is to keep me sane, I mean, I, I have to be doing something. I can’t just hunt and fish I’ve proved that to myself the last year or two.
Right. So I need, I need some work to do. I’ve always been about creating opportunities, creating jobs. I just have this passion for that. And so, really there’s just a number of things. It was a bit of a perfect storm, which actually has given us some wind to our sails to use- I don’t know if those metaphors work together, but but really that’s, what’s kind of brought us to the point of saying, okay, well, let’s start looking at buying a business instead of starting something from scratch.
Sure. And there’s other reasons we can talk about, but that’s kind of the basic.
Kathy: [00:05:02] And one thing I want to back up just a little bit, if you’re new to this podcast, I’d like to just give a quick summary of what we’ve done up until now. We have been married 41 years. We were starting things. We started a church back in the early mid eighties.
Mark has always been someone that did not want to play in the sandbox with others. It’s not that he didn’t like other people, he just wanted to do his own thing. And for a long time he thought, I thought, there was something wrong with him.
He just couldn’t keep a job.
Mark: [00:05:43] Yeah, I did too. Yeah.
Kathy: [00:05:45] Yeah. So fast forward. Some painful years. And when you were 40?
Mark: [00:05:53] 41
Kathy: [00:05:54] 41, you started an assisted living business. And so for 21, 22 years, now, that is what we’ve been doing. So we have multiple communities in Texas that primarily care for people with Alzheimer’s. So that sets the stage for what 2020 was like, and it, it was pretty scary at first.
Mark: [00:06:19] It was, we had a conversation last spring when I came back from a trip to Texas looking at the businesses, just looking at everything . In March. And I said, okay, we need to talk about this. I don’t think it will happen, but it’s possible. The absolute worst case scenario would be cOVID gets into one or more of our buildings and just wipes people out and we lose a business.
And, you know, at that time we had the house in Granby. We were pretty much settled there. And so we talked through it and I said, well, okay, I’ve made a living as a painter before, remodeler. There’s never enough people up here doing that kind of thing. So we can, we can survive if that happens, which, that’s the process I kind of have to go through.
And it’s a little different process for us to go through it together. We probably talked in a previous episode about just how little the conversation we had about starting the business originally. And so we can talk a little bit more. It’s definitely been more of the two of us. I mean, I’ve been digging in doing the research, doing the search, all of that, but it’s the two of us talking through.
Does this make sense? Does it make sense for us? You know, is it the right next step for our family?
Kathy: [00:07:41] Yeah. And I think I have a lot more confidence even knowing what questions to ask so that we can have those conversations. And we also, we have a lot of margin. Yeah. That we didn’t before I remember when you were starting the company and I had a private practice and we had three kids, busy, involved in all kinds of things, and we were busy.
And I said to you, at some point, if you’re going to start something else, whether that’s a meeting or. Yeah, then something else has to go. Right? Same thing with our house. We lived in a really small house at the time that we had no storage. And so I was like, if you’re going to bring that in this house, then something else has to go.
So even back then, I was trying to create some sense of balance and not getting overwhelmed. But at this point in life, our kids are grown. We’re empty nesters. And so we have time to talk a lot.
Mark: [00:08:46] We’ve had too much time this year.
Kathy: [00:08:48] We’ve had too much time and that, that may be another episode just.
Encouraging couples because y’all, we love each other. We’re best friends, but we’re tired of each other, sometimes. So anyways, so yeah, so we started this conversation. You were looking for something to do. And so walk us through, because you have, you had a white board at one point last spring, late spring, early summer, that was full.
of a business idea. Yeah.
Mark: [00:09:22] Yeah. I Kept looking at trying to start something else. And I was looking at starting a coaching business and trying to write a book and do all this stuff about being an entrepreneur. Then I started looking at Vistage, which is a peer board and being, being a coach and which I enjoy, but I began to realize, at some point it just clicked that,
I didn’t want to be a coach or a mentor on a transactional basis. I enjoy that in a relationship and we have a number of young couple friends. I have young guy friends that are starting or building their businesses and we have great conversations. I love that. I don’t want to get paid for doing that.
Kathy: [00:10:13] And that, that took you some months to get to that point. But I remember when you, you said one day, you said, I’ve realized I don’t want this to be transactional.
Mark: [00:10:23] Right, right, right. I want it to be relational. And so, you know, I’m going to volunteer through CSU and do some things in that way, but. All of that then led me back to okay…
starting a business. So here’s kind of the thought process of getting to the point of deciding to buy. Starting a business, I mean, we know 90% of them fail. And even for an experienced entrepreneur, I mean, we’ve had failures along the way. And so the idea at this point in our life of minimizing those risks was pretty important.
You know, I wanted to be able to increase our revenue stream, have something that I could build out over the next maybe 10 years that would provide for us. You know, maybe, or maybe not be an opportunity for the kids. If anybody wants to participate down the road, that’s really way down the list. But it’s, so, the idea of buying a business, you’re buying cashflow, you’re buying something where someone has already taken that initial risk.
So you pay for that and you have to provide financing and be able to walk through that whole process, which we’re able to do at this point in our lives. And so we minimize those risks. We buy cash flow and, it still gives me an opportunity to build something, to grow something. And that’s, that’s where I’ve, I’ve been focused on.
And so the other piece of this has been that the SBA, the small business administration, has a small fraction of the loan at risk because the SBA is guaranteeing it now. You, and I are going to have to put personal guarantees on that because we’re the business owners. But we also have kind of understood that risk over time.
There’s some of those guarantees we’ve been working hard to get rid of. And then there’s some that we don’t mind taking because we’re investing in ourselves and we understand that we minimize that risk by investing ourselves. We wouldn’t do that in the stock market. But we would invest in us because of what we do.
The other two things that are happening with the SBA right now is that they’re waiving the guarantee fees, which are significant. So there’ll still be a few fees involved with a loan like this, but rather than spending what in the past, for this size of a loan, it’s a little over a half million dollars.
The fees would be 20, $30,000, probably at a minimum. It’s a lot. And so those have been waived.
Kathy: [00:13:04] That’s a trip to the beach that I’ve been dreaming of for a year!
Mark: [00:13:07] Exactly several trips, probably. The other thing is Is that the SBA is making payments, loan payments. The first six loan payments, they’re making, well on a loan like this that’s more than half, it’s almost two thirds of the down payment we’re going to make on the business.
So they’re just a number of things that have kind of really come together at this time, which is a little bit of the answer to why in the world, would we be buying a business in a pandemic? Well, there are some things that are in place. The other thing that’s happening just around the country is that baby boomers, which we’re kind of on the tail end of, but baby boomers are retiring at a pretty rapid rate.
And many of them have businesses. A lot of them are small businesses. They’re under a million dollars in revenue and those businesses are going to either just close. Maybe if they’re lucky, their kids will take them over and grow them, but that doesn’t happen very often, or they end up just shutting it down if they can’t, if they can’t sell that business.
And so there’s, there’s some real interesting opportunities right now to buy a business. And it is it is still a very entrepreneurial venture to do. It’s not quite the same as starting from scratch because you you’ve kind of gone through some of that early survival risk, proving the concept, proving the concept.
Yeah. Yeah. And so, yeah, that’s where we are. We’ve we’re at the point where we’ve got a letter of intent on a business, we are working through the financing of that business and the guy that owns the business wants to sell it to us. He’s had another offer at a little higher price, but he, they want…
we’ve agreed to lease the current space that he owns. And he’s afraid also that they’re going to not only just move the business, so he’ll lose the rental income, but, that probably some of his employees will just go away.
Kathy: [00:15:18] Yeah. Yeah. And we’ll get into more of the details of what we’re looking at. We’re going to do a couple more episodes about how you did your homework.
Mark: [00:15:25] Yeah.
Kathy: [00:15:26] Some of the things we’ve learned along the way.
Mark: [00:15:28] Yep.
Kathy: [00:15:29] And then starting the dating process. Yeah. Yeah. Not you and me dating, but dating a potential business.
Mark: [00:15:36] Yeah.
Kathy: [00:15:37] So that’s really helpful. I think hopefully for someone to hear that if your income has been impacted, there are a lot of people that after the 2008 recession, I think of Pat Flynn, for instance, he lost his job because of the financial
industry, I think he was in the financial industry and that is when he started his website, started selling things online. He’s become incredibly successful as an online entrepreneur. So tough times don’t mean hunker down and do nothing. For people that are possibility thinkers, this in some ways is a rich time.
And I don’t want to belittle the challenges that many people are going through. And no one has been, has not been impacted.
Mark: [00:16:40] Right.
Kathy: [00:16:41] By this pandemic, right? We have all been impacted in some way or another. So none of this is meant to minimize the pain that some of you may be feeling, but my intent is to
perhaps help you think about, okay, if my job went away, then maybe I need to create my own job. That’s essentially what an entrepreneur is. Right. Let’s look for a new way to do this. Okay, great. Well, that will wrap up our, our intro to why.. We keep thinking we should have our head checked and maybe it’s time to check in with a therapist, but I mean, that would be me.
But we’ll pick up with the next episode on how you, how you did your research. Right. All right. Thanks for joining us guys. . .