Ace Chapman is a micro private equity investor who has acquired 15 offline businesses (he has sold 13 of them) and 31 online businesses. He is also the author of The Ace Formula, a book on “how to buy a profitable business, starting with no money, and live life on your terms like a boss.” Buy the book! It’s worth it. And make sure you take notes.
Ace bought his first business, CoolWallStreet.com, in the late 90’s at the age of 19. He started as a member of the site which allowed users to invest virtual money in the stock market. When he sold the business in 2001, he was getting 7-figure offers. However, after paying off all remaining expenses, he didn’t really make any profit.
Tip: Buy a business you are passionate about as a consumer because then you know what the other consumers want.
Starting an offline business –
Requires finding a location, paying for the lease (and deposit) and build out, hiring employees, training employees, marketing, etc. And you still end up losing money for months.
**Tip:** Go find the money to get it. You wouldn’t build your computer or car from scratch, so why build a business when you can go buy one?
Buying an offline business –
– Ace’s favorite business deal was a tanning salon, which he sold only six months later for more than double profit. He looked for three key things before purchasing it:
– It had been around for a long time and already had a large customer base.
– The owner needed to sell the business right away.
– It was making great money already.
Dealing with the seller:
– Educate the seller before buying. (It’s not about tricking them.)
– Ask about their customers.
– How many customers are in your database and how often do you contact them (call, mail coupons, etc.)?
– It’s more about terms than price.
Finding a business for sale:
– Tell people that you buy businesses and it will stick in their heads.
– You can build a team of virtual employees who search for deals.
– Build a prospectus.
– Divorce attorneys often have clients who are looking to sell businesses quickly.
– Use a site like LinkedIn where you can connect with owners of the types of businesses you want to buy.
– Events: Drop-shipping, FBA, etc. (This can help you connect with different affiliates who use different techniques and tactics which you can add to your business knowledge.)
What are some of your favorite business books? Email AskBrad@baconwrappedbusiness.com with your suggestions.