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How To Buy A Company For No Money
Can you really buy a company for nothing? Yes, you can. In fact it happens every day and it happens every place from the narrow streets of lower Manhattan to the fast food lined streets of Middle America. You can buy a mature, established company for no money out of your pocket.
That's the good news. Now here is the bad news. It will take time. It will take effort. And you will need some capital in reserve if nothing except for your living expenses. What kinds of companies are for sale with no money out of your pocket? It varies from industry to industry and region to region. In the industrial heartland like Detroit and Cleveland and Chicago, there are small manufacturing companies begging for new owners. The old owner will likely throw you the keys in exchange for a stable set of payments.
"The first company that I bought on my own was a 20 year old, leader in a manufacturing niche," said Peter Klamka ( http://www.peterklamka.com), an angel investor who participates in buyouts and reverse mergers.
Keep in mind that most of these companies will be in some kind of distress. They might be behind on essentials like rent, taxes, or employee obligations. A major customer may have gone out of business or changed direction. The plant may have environmental problems. The industry that the company is in may be maturing. Why would you want such a company? For the right individual, a turn around is easier than a pure start up. An older company also has a foundation of employees and customers and vendors. It often just lacks vision and energy. How many small manufacturers that are tied to old industries could be repackaged for the green economy? Plenty.
Where do you find these deals? They are not going to find you. You need to hustle. Call around. Send out emails. Talk to small banks in the area. Craigslist can even be a source. The key is to prospect and turn over every stone. The best opportunities are often out of favor companies on the wrong side of town with a sole owner who's ready to give up. Make a list a head of time of what you have to offer the seller. You are financially stable and can work without taking money out of the company for a while. You have contacts for sales and new business. Maybe you have access to a new market for his products or services. Perhaps you have a graduate degree or some special education. These deals get done every day.
David Webb is a freelance writer and student of human moves. His first job was at a Child World in Chicago. He is a fanatic for certain video games. He does not miss the cold weather having relocated to Souther California to pursue writing and jiu-jitsu. He is working on a book about the founding of Google.
You can follow him on http://www.twitter.com/dfwebb
Article submitted Monday, April 25, 2011 & read 12 times.
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