Rich Owner - Poor Seller: Manage and Grow Rich - Sell and Stay Poor

By Gregory S. Gush

Become a Rich Owner, Not a Poor Seller!

I wrote this book for the benefit of all small business owners. It's a must-read book as you look forward and plan the future of your business. A few will become Rich Owners, because they will follow a wealth-building strategy and build a million-dollar net worth. Most, however, will remain Poor Owners and Poor Sellers, because they will make very different choices. I expose the many small business marketplace myths and misunderstandings. Which road will you take?

• Language: English
• Publisher: BookBaby
• Release date: Mar 2, 2020
• ISBN: 9781098304065

Book preview

©2020 All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in a book review.

eBook ISBN: 978-1-09830-406-5

The Prologue

Become a Rich Owner, Not a Poor Seller!

I wrote this book for the benefit of all small business owners. It’s a must-read book as you look forward and plan the future of your business. A few will become Rich Owners, because they will follow a wealth-building strategy and build a million-dollar net worth.

Most, however, will remain Poor Owners and Poor Sellers, because they will make very different choices. I expose the many small business marketplace myths and misunderstandings. Which road will you take?

Small business owners represent about 75% to 85% of all U.S. businesses. Over the past nearly 20 years, as a business broker and investment banker, I saw hundreds of businesses and talked with many, many owners. I wanted to share my observations with all of you. I believe you will benefit significantly by reading this book, regardless of the road you take.

This book is not a 100-page, hard sell pitch for anything. Nor is it a 500-page encyclopedia about selling your business, with endless facts, figures, and minutia. You won’t get a sales pitch either. I tried to eliminate all sales propaganda. And I focused on sharing those critical observations and strove to make clear recommendations.

Lastly, I won’t be asking you for your credit card to purchase anything more. I’m not selling a get rich scheme, nor a how to become a millionaire course. This book is not a real estate investing program, nor am I hocking kitchen appliances and extreme bonding glues.

Some small business owners became Rich Owners. I noticed that the Rich Owners had implemented consistent winning strategies in operating their small businesses and had consequently built million-dollar net fortunes and more. They made a lot of good investment choices and avoided financially destructive ones. The Rich Owners chose wealth-building paths.

Rich Owners didn’t SELL their small business. They didn’t give them away for pennies on the dollar, or dump them onto the first buyer that walked through the door! They knew it was worth a lot more to them than the market would pay! Selling was not the answer! I’ll show you how it’s a two-to-three-year financial poor choice!

Many Rich Owners managed their businesses themselves. Or, they hired a manager to run it for them. They implemented many of those best small business practices I observed. I’ll share them with you. They invested in and through their small business. Let me repeat that. They invested in and through their small business.

Successful owners put their extra money back into their business to drive growth. They hired good people and built out their management teams. They took all their available tax deductions and tax savings, invested fully in their retirement plans, and funded savings accounts and stock portfolios. They also purchased the building to house their business. Consequently, over time, they built significant wealth for themselves. They made many right choices.

Follow the same path yourself, and you will also create a high net worth down the road.

Most small business owners, however, remained Poor Owners and Poor Sellers. They made very different choices and took very different paths.

Market propaganda and mass media swayed most of them. They chose a highly promoted path recommended by thousands of sales agents, encouraging them to SELL their company. They listened to all those selfishly promoting business brokers, investment bankers, and sales agents. They drank their magic potion and bought their pitches.

How could they resist so many voices? Those voices screamed: SELL your business. Sell! Sell! Sell! Cash-out! Take your pot of gold! Take the cash and travel! Enjoy! Retire! End your frustration! They told you they had a buyer for your company already! Yeah, right! Or, they told you they had hordes of buyers just waiting to buy a business like yours. Wow! With so many brokers telling you that, they must be right. I don’t think so. Read on, and you’ll see the facts I witnessed about selling. I’ll show you the numbers and the results.

My observations were similar across many industries. They included companies in accounting, business services, construction, specialty construction, distribution, entertainment, financial, franchising, healthcare, manufacturing, medical and medical products, personal services, and retail.

Business brokers spend considerable time encouraging business owners to sell their small businesses. Most only recommend a selling exit strategy. Consequently, I want you to know what you can realistically expect from that selling process, and how you can evaluate some of the viable alternatives more seriously. Viable alternatives include holding for two more years and liquidating, promoting a manager, finding a partner, or just liquidating.

You will see the pitfalls and difficulties I saw in that selling process. You will also get a close look at alternatives to selling. I’ll share with you how some owners that kept their small business and didn’t sell faired. Those that employed smart business practices ultimately built substantial wealth over time.

No, they didn’t become Google, Microsoft, or Facebook. They are just small business owners whose businesses you’ve never heard of and whose names you won’t recognize. Nonetheless, over time, they became financially secure—even millionaires.

As you read further, keep in mind an essential underlying theme in this entire book is what I call my 20-80 Rule. With a firm grasp of 20% of the information, one can achieve 80% of the results. It’s paramount, however, that one applies a common–sense, skeptical, and objective decision-making process to all decisions.

It’s all about the coupling of both events: (a) acquiring a fundamental understanding of a particular industry; and (b) applying objective, skeptical, and common sense decision-making to all your choices. One without the other will usually lead to poor results. That’s where investors get into trouble. Many do not take the time to acquire a basic understanding of the industry, or they make impulsive and non-objective decisions. They don’t connect the two. I found that this 20-80 Rule holds in business, real estate, and portfolio investing. So, don’t be discouraged if you enter new territory without a PhD. You started a small business, or you’re managing a small business, so don’t underestimate yourself.

As a Licensed Business Broker, a Licensed Investment Banker, a Licensed Financial Advisor, a Licensed Securities Broker, a Licensed Real Estate Broker, and a broker of many things media, I saw a few things along the way. I believe my observations may help you financially in your journey, whether you are a small business owner or a potential owner. I want to share these observations with you.

In short, this book is about the small business owner. He or she operates in a big, unfair, and competitive marketplace. I would like to see the small owner catch a break by working on a more level playing field, and thereby experience increasing success, and wealth.

I’ll point out examples of winning financial strategies by successful small business owners. They included things like taking full advantage of small business tax deductions and of owner’s discretionary earnings deductions. They made smart choices like buying versus renting the company building, and taking excess cash to over-fund retirement and stock portfolios. I’ll show you the short term and long-term financial consequences of those decisions, and how they made some owners the millionaire next door.

As a Business Broker and Investment Banker, I met many owners that I felt would be better off not selling their business instead of selling. The numbers showed me there were better financial alternatives for them.

You now have the essence of this book in this short Prologue. Read on to understand more about the choices facing all small business owners.

I believe you can join the ranks of those small business millionaires too. Follow their path and become a Rich Owner yourself!

Table of Contents

Chapter 1. Don’t be a Poor Lemming!

Chapter 2. Your End Game

Chapter 3. Don’t Sell for Pennies!

Chapter 4. Boiler Rooms & Call Centers

Chapter 5. Little Prep-Little Price

Chapter 6. Steak at Ground Chuck Prices!

Chapter 7. Meet the Vultures

Chapter 8. Taxes

Chapter 9. Follow The Money!

Chapter 10. Cash Cow!

Chapter 11. Uncle Sam Offers an Assist

Chapter 12. Stock Investment Portfolio

Chapter 13. Show Up!

Chapter 1

Don’t be a Poor Lemming!

Become a Rich Shark!

In this chapter, we’ll look at those small business owners that followed the masses, like lemmings marching into the sea. They chose to sell their business. The selling process created frustration and failure. Most never sold. They became disappointed in the pricing, the costs, the lengthy