If You Want to Win the Money Game, You Shouldn’t Start a Business
The Amplified Impact Podcast
October 16th, 2023
I’ve got a wealth strategy that might change the game for you.
Instead of the risky path of starting a business from scratch, consider buying an existing one.
Starting from zero is tough. Most new businesses struggle. But running a business is one of the best ways to build wealth.
So, why not buy one that’s already successful?
The best part is…many business owners want to retire, and their companies are up for grabs.
This is your chance to acquire a thriving business with a proven track record. It’s way less risky than starting from scratch.
This unconventional approach could be your ticket to wealth.
TWEETABLE QUOTE:
“Building a business is one of those high leverage activities that decouples your inputs from your outputs.”- Anthony Vicino
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Episode Transcript:
Anthony Vicino:
Yeah, well, what’s up, all you hyper focused entrepreneurs? I want to talk to you guys about, I think one of the most surefire ways of winning the wealth game. There’s a lot of different paths that you can take to get to the top of the mountain. And the one that I’m the most fond of is to build a business and invest in real estate. I think building a business is one of those high leverage activities that decouples your inputs from your outputs, so that as you’re building this thing and you’re bringing in the leverage of labor, you’re bringing other people in to your team to help you grow this. And you’re using capital and you’re using software and code and media, and you’re growing this thing beyond just what you could do with your 40 hours at a w two, you can start to exponentially increase your earning capacity. And not only that, because of the way that businesses are treated from a tax perspective in the US. It’s the best way to make more of what you keep. Because one of those cliches that everybody likes to say is, it’s not about what you make, it’s about what you keep.
Anthony Vicino:
And taxes are going to be one of the biggest things. That one of your biggest expenses in life. So anything that we can do to reduce that get better tax treatment is going to be better. That’s one of the reasons that I like business now that’s on the making side of money. Like, how do I make money? Go build a business or go get a high paying job? There’s lots of ways you could do this, but I think business is just generally the easiest way, given where we are in the cultural zeitgeist with everybody having access to the Internet and there’s just been so much opportunity available to us, I think it’s more accessible than people realize. The other side of that is, once you learn how to make money, now you need to learn how to grow your money or have your money grow itself. So you’re putting your money to work for you so that it’s working harder for you than you work for it. And that’s where real estate comes into the equation.
Anthony Vicino:
But with all that, let’s put that all aside. Okay? That’s the framework that I operate within, which is I think that you should build a business and invest in real estate. That will get you pretty far in the wealth building game if you execute this over a long enough time frame. However, when it comes to building a business, typically I’ve talked on this podcast through the frame or the perspective of going and starting your own business. But the truth is, starting a business is very hard. It’s very risky, and most businesses fail within the first couple of years. And there’s a lot of reasons why businesses fail in those early years. It has to do with having to find a product or develop a product that people actually want, then you have to find the audience that actually wants a thing.
Anthony Vicino:
Then you got to figure out how to deliver it to them all while maintaining the cash flows and all the different financial engineering that goes into it. And the purpose of this podcast, YouTube channel, the content that I put out is to help you navigate those entrepreneurial waters because I believe the world is a better place when everybody is working towards their purpose in life and they’re free to express themselves. And I think the best way to do that is to make your life’s work an extension of the way that you make money. If you can couple those two things. Okay? Now here’s the problem though is because starting a business is very hard, it’s very risky. I think for most people you should probably not do that. You should probably not start from square one, just trying to get a business off the ground. There are exceptions, of course.
Anthony Vicino:
If you’re going to start a business. I think initially if you’re working in W Two and you have an income stream coming in to start that business is a side hustle. Don’t jump full bore into it until it is making enough money that you can justify jumping ship or until you have enough in reserves that you comfortably live. Pay your expenses for the next year or maybe two years that you’re not in a cash crunch having to make questionable decisions in your business. You can focus on actually growing the thing in the most advantageous way for the long term. Now, okay, so starting a business is risky, but business is the best way to win the wealth game. So how do we overcome that risky initial period and get to the juicy back end of being a business owner? I think there’s a better way than starting the business and that better way is just to buy a preexisting business. There’s a lot of reasons why buying a preexisting business I think is a brilliant way to get started for a lot of entrepreneurs because one, you already have a business that’s proven itself to be profitable, to have a product that people want, have a market for it, and have a system for delivering it to people.
Anthony Vicino:
So when you go and you buy a business that’s already generating a million, 2 million, $3 million of revenue and a couple of hundred thousand dollars of EBITDA, then you can comfortably go in there knowing you’re buying something that’s already functioning. Now it’s just a matter of improving it or keeping it going. Right? And so I don’t think a lot of people think that this is even an option. But the truth is that what is it? It’s like 10,000 baby boomers retire every single year or every single day or something like that. And 20% of those own a business. And so right now, we’re in the midst of what they called a great wealth transfer, which is effectively saying that there are a lot of baby boomers who have a lot of wealth tied up into their businesses and different endeavors, and most of them are going to have to try to find a way to transfer that either to the kids or in a lot of cases, the kids and the family behind them don’t want anything to do with their business. So mom and dad who have this plumbing or HVAC company that they’ve been running for the last 2030 years and it’s pumping out millions of dollars of revenue, the kids want nothing to do with that because they’ve gone on to become a lawyer or a CPA or do whatever else right. They don’t want to take over the HVAC company.
Anthony Vicino:
And this presents an opportunity for you, for me, for us in this period of time to go and find those people and get these businesses for a great price that are totally profitable. There’s nothing wrong with it. It’s just that the owner is getting old. They didn’t create the systems that would let them extract themselves from the day to day business and be able to just live on a beach. And now they just want to cash out and go live on the beach. In a lot of cases they don’t even care about selling the business. They got enough in the bank. They’re just wanting to go to retire.
Anthony Vicino:
So a lot of times people will just shut down their businesses. They won’t even entertain to sell. They’re like, it’s not worth the effort, right? So if you can find those people at the right time, you can step into a very profitable enterprise with very little money from day one. And for most people this is completely foreign concept that they’ve never even considered as a viable option. There’s a great book called Buy Then Build by Walker Dibel. Highly recommend if this is something that’s interesting to you, what’s called acquisition entrepreneurship, go check that out. But if you want to dive even deeper into this, I did a recent video on the main backslash, anthony Vasino, go check that out. It’s called want to be rich, don’t start a business.
Anthony Vicino:
And it’s going to break down exactly where you can find these businesses for sale, whether that’s to a broker, a public marketplace, or going off market. And then it’s going to break down the four different ways that you can finance these deals, whether that’s through cash, equity, debt or seller financing. And then there’s some other things that I go into in depth in that video but highly recommend you go check it out again. That’s called? If want to be rich, don’t start a business. So go check that out. Let me know if it brings you guys some value. But hopefully this gives you a new frame, a new way of thinking about entrepreneurship. It’s not just about going from zero to one.
Anthony Vicino:
Maybe you can go acquire something at one and take it to ten. And I find that to be way easier than going that zero to one is just as harder in my book than one to ten. So good luck. Godspeed. I love you all. Thank you for being here, as always. I’ll catch you back around these parts tomorrow. But until then, my friends, let’s try a new call line.
Anthony Vicino:
Get out there and maximize your return on life. Them. There you are. Love you guys. Bye.
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