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- Why Millennials Should Buy a Business to Grow their Wealth Fast | Josh Tolley
Why Millennials Should Buy a Business to Grow their Wealth Fast | Josh Tolley
The C students hire the B students to manage the A students...and the D students own the business
Wes Schaeffer
April 16, 2024
Professional Sales Tips you'll learn today on The Sales Podcast ...
Josh Tolley is the founder and chairman of Tolley & Company, an organization that buys, builds, operates and sells companies in multiple industries including finance, spirits, birthing centers, professional sports and many others. Josh has built multiple multi-million-dollar companies over his career and has helped many other people do the same. He has appeared on national and international television, been featured in two documentaries, has conducted over 1,000 interviews, 2,000+ radio broadcasts and is regarded by many as the Global Voice on Business
The average American millennial makes between $52,156 and $62,244 a year, yet 74% believe they are financially behind. Some turn to side hustles, but buying a business is usually less work for faster and bigger returns.
In his new book Acquisitional Wealth: The Fastest and Most Proven Way to Create Life-Changing Prosperity (April 16; Matt Holt), Josh Tolley, Chairman of Tolley & Co. and longtime entrepreneur, reveals how millennials can use the money they're saving from their salary to buy a business that can grow in value far more than most side hustles or investments.
Josh’s client Bob was 10 years out of college, making $40,000 a year with $60,000 in savings, but felt uncertain about his finances. To increase his income, he tried side hustles like Uber and Etsy, but they failed to move the needle and added too much stress. Tolley helped Bob leverage his $60,000 in savings to buy a $500,000 company with an annual take-home of $160,000. That 375% return on investment allowed him to quadruple his annual take-home and become a business owner.
He owns 26 businesses.
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Most of us think of buying a business as something reserved for the wealthy. Why is it actually the best and most practical way for people with average or even low incomes to jumpstart their financial future?
How does buying a company beat current retirement savings norms for building wealth like using a financial planner, 401K plan, Roth IRA, and/or working as an employee for a company that provides a steady paycheck?
How much money do you really need to start this process and purchase a business?
What is the biggest preconceived notion about buying a business that you encounter when you try to help people do it?
If the idea of acquiring businesses is so great, then why isn’t everyone doing it?
How can buying a business help non-native U.S. citizens?
For what age group would buying a business be the right move to build wealth?
In the midst of economic uncertainty—high mortgage interest rates, multiple wars, and a volatile Presidential election—how is buying a business a better bet than staying where you are and not ‘rocking the boat?’ Why is now the time to make a change?
Is buying a business hard work or an easy shortcut to wealth?
Gen Z is reading more than Millennials
They also like catalogs
Colleges make us too indoctrinated for our own good
Your odds of becoming a millionaire go up as your grades go down
You don’t have your own morals; you have preferences
He was running numbers by age 12
It’s simple to buy a business, it’s older than real estate
Business transactions go back at least 2,800
Multiply your savings by 10 to determine what size business you can buy
Divide the purchase price by three to determine the SDE (Seller Discretionary Earnings)
You don’t have to know how to do the business you own.
Stay away from businesses that you know, like, or love.
You’ll put on blinders…then you’ll hate it.
You pay the price to do the things you love.
Statistically speaking, when you buy a business that is profitable, your odds of failure are low
If they’ve been around five years, they have five employees, and are doing $1 million/year…it’s quite likely it will succeed
If you start something, chances are high you’ll fail
If a business is making money, it should be sold. Losing businesses don’t get sold.
Business owners are old…health…divorce…they’re just done!
Unless it’s a legacy play, sell your business after five years.
Flip to Fortune!
8 out of 10 small businesses (i.e., under $250 million) hate their accounting and bookkeeping
He owns his own accounting firm
Air, spark, fuel, or compression are the only reasons a car won’t start
Businesses fail for only one of four things: The Table Method
Stay off of Craigslist, BizBuySell, etc.
THE INTERNET IS THERE TO GET YOU!
If something is free, you are the product
Hire a good business broker
The SBA wants to see relevant experience…but you can work around it
The SBA wants to see you live within two hours of the business (give the manager a 5% ownership so “owner is on sight.”)
Buy something with no cash register, avoid income-producing real estate like a laundromat
Look for 5+ years in business with 5+ employees with $1 million+ in revenue
Then there are about 100 other things to consider, i.e.,
Construction
Tax abatements
Franchise rules
Avoid the “Insta-experts” who sell you classes…they have no legal obligation to you
He got tired of seeing all of the “douche-knots”
“I like people as a concept.”
“Price should be the easiest part.”
“The math should just math.”
A lot of business brokers come from the commercial real estate space, and they are about 2x off.
Where negotiations come in are in the terms, i.e., sweat equity, a statue of grandpa, eggs, season tickets, etc. The negotiations should be fun.
Price, value, and worth
Price is what will change hands, but that’s not what it’s worth to you.
A business may have an asset I value above the price.
Be the chairman of everything, CEO of nothing.”
People have to want to take the long road.”
Sales Growth Tools Mentioned In The Sales Podcast
Send Drunk Emails: ...that get opened and get you paid!
Phone Burner: work the phone like a machine so you can be a human when you connect.
GUEST INFO:
Guest Site: JoshTolley.com
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