Hello to all my peeps in the Million Dollar Community! As always, I hope this message finds you all doing well and business is booming!
My peeps, Team DDC, shared some of your great questions in response to my last video. I appreciate the targeted questions because it underscores you're engaged and taking things serious.
Let me work to condense and consolidate some answers to address your great questions:
1. "What are you referring to by honey pot?"
Great question! I'm going to play it absolutely straight with you and leave out all possible fluff. Ready?
We're in business to make money - bottom line! I know, I know, that doesn't square with all the "I want to help our community" or "We're supporting area seniors," etc., etc., etc. TRUST ME, I know, I get it, those sentiments are all legit and I trust sincere, but if we're NOT MAKING MONEY you're literally working to GO OUT OF BUSINESS!
So, you're "honey pot" is a series of integrated strategies and investments that we build, grow, and scale that is NOT directly affiliated with your "front line business(es)."
By front line business(es) I'm referring to those business that are operational and, therefore, are at higher risk to legalities. We want to make as much money in via operations and then LEGALLY move that money to "safe havens" where it can grow and compound headache free from any operational problems or headaches.
Case in point, the below image is from one of our client-providers who started building his honey pot about this time last year. This image is literally from this morning. By 11:08 AM, he was up $4,069.63. Obviously, like any investment, there are highs and lows, but overall, you're going to see consistent growth if you're making good strategic moves.
I know, I know, $321k isn't mult-seven figures, but again, he just started last year, and this is money that has nothing to do with or is exposed to any issues associated with his NEMT business - employee problems, customer problems, vehicle problems, etc., etc.
We have client-providers who are doing well with their NEMT and home care businesses and also invest in real estate, but the thing I LOVE about building a honey pot that is free and clear of operational businesses is that it is convenient and liquid. We're never having to search or wait for buyers, and once found, we then have to negotiate.
Again, your honey pot should be a "safe haven" where you're in direct control with the only volatility being market fluctuations that you can keep bobbing and weaving to stay on top of the curves..
2. "How do I know when to sell my business?"
Another great question but doesn't have a single answer. You have a host of considerations to include everything from your location and associated market conditions to the current size and condition of your business.
How long you've been in business, and what is your revenue and margin?
What are your personal interests, desires, and considerations to include family, health, long-term goals and desires, and much, much more.
Timing is always important, BUT, BUT, BUT to the best of your ability, you NEVER want to let someone rush or accelerate your time table. Brokers are notorious for deploying this strategy - causing a fictitious sense of urgency for you to "act now" or "sign now" or you're going to miss on the opportunity.
Disengage from ANYONE, a buyer, a seller, a broker, or other trying to create conditions and circumstances to get you off balance so you risk making a mistake to their benefit. When this happens, disengage and slow everything down.
I've seen plenty of low-ball deals where the seller was anxious to take the deal, we pass, spend some more time growing, scaling and strengthening the business, and the result is a better business with higher ROI and improved selling position.
3." How long does it take to close on a business?"
That really depends on the level of motivation of both buyer and seller, the deal we're able to establish, does the buyer have cash-on-hand or are they waiting for financing, are seller assets paid off, etc. We've had some acquisitions close pretty quick, within/around 60 days, and other have taken closer to a year.
4. "You seem averse to attorneys. Do I need an attorney to sell my business?"
Ah, I see someone was watching my video! LOL!
Trust me, I'm not anti-attorney in any way. Heck, if I didn't start my own business and go full-time entrepreneur I probably would have gone to law school.
To be clear, I'm not "averse" to attorneys. There's a time and place for everything. I just know the games, the mentality, and often times high priced uselessness!
Consider, how many times have you heard people in a dispute say "I'm calling my attorney" - like the attorney is some type of legal "daddy" whose coming in to regulate? Dude - it's a joke, especially when it comes to contract law.
Bottom line, unless an attorney specializes in particular industries, they're like a general broker - a jack of all trades and master of none, and thus, have no real depth of knowledge of the particulars for formulating a win-win deal with buyers and sellers.
There's nothing wrong with having an attorney finalize a deal, even draft the final agreement, but attorneys are far from necessary when it comes to negotiations and establishing real strategies.
My apologies for making this message so long. It definitely wasn't my intention, but my fingers just took over!
If you haven't watched my last video, click below:
https://youtu.be/4F9JYTsheRs
See you at the Top!
Joel E. Davis
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