Gaining Financial Independence in 10 steps!

Hey guys, So jesse here was digger, inc the reason

you're looking at this video is because we created a

M and a mergers and acquisitions program that helps young

entrepreneurs or previous like real estate investors, uh, successful serial

entrepreneurs to passively and actively get into buying established businesses

to create wealth or to accelerate their wealth from where

they're currently at.

This structure has been tried intrude.

There's a lot of private equity firms, family offices and

people that currently use this structure or entities that use

this structure that have made massive amounts of returns.

And I feel like it's been an exclusive club.

So, you know, the retail investor, the mom and pop

investor, they're not familiar with this structure because they haven't

been properly educated on it or it's because they currently

don't know how to evaluate deals or they haven't really

thought about looking at buying established businesses versus real estate

or different other asset classes.

For example, investing in startups or stocks bonds, E.

T. F.

So things like that.

So I'm going to jump into it.

Um, So we, we created 10 steps to financial independence.

Uh, these 10 steps they work, they've been proven.

If we look at successful entrepreneurs that have 7-8 figure

exits and we kind of dive into what has made

them successful and how they've been able to grow their

wealth. The first step I would say, is personal credit

when you go to buy a home or when you're

going to buy, uh, like your car, uh, interest rates

are impacted based on your personal credit.

So if you have bad personal credit, you're going to

be paying thousands of dollars on interest over time.

Say for example, if you're buying $1 million house you

know, you might end up paying 100,000 plus on interest

over those 30 years that you have this loan.

Uh So age becomes a factor utilization.

Uh, the amount of limits that you have, some people

that could go get a credit card, it has a

$30,000 limit or others have to start with like a

secured card or you might end up going and get

a discover card, you know, things like that.

So inquiries become a problem as well over time when

you're building your credit, if your credits new, you can

get so many inquiries compared to some other financial institutions

because they may limit your ability to get accounts with

them based off of how many times you've applied for

credit. There are certain rules.

For example, with chase, there's a 524 rule, you can't

have five accounts um in 24 months or they'll automatically

decline you for future cards.

There's a hard pull versus a soft poll.

Uh when working with us on our financial department, we

actually help you so that you're able to go out

and get soft approvals.

So you don't get those inquiries on your credit profile.

So personal credit is super important.

I feel like that's the first step or or the

building block um for your actual foundation to build your

wealth, the second uh setting up a business.

So when you're setting up a business, there's a lot

of factors.

For example, there's compliance.

You know, you want to be registered with the I.

R. S.

So that you could pay taxes, you'll have tax returns,

you want to be filed with the secretary of state

so that you can get a certificate of good standing.

You want to have a business phone line, a business

address, you could have this listed on your google listing.

There's social media accounts.

You want to be social almost every business now if

it's successful and it's growing, you want to have a

social media presence.

That's how you stay connected to your customer's clients.

You know, whoever that's going to be paying you for

your products or service is typically they're looking at you

from social media platforms, you're going to have a website

so that you're easy to found your, easy to uh

connect with or contact.

Um basically this all comes down to business compliance.

So the third step, once you have your personal credit

set up, your business is set up now you start

with business credit.

So there's a business credit tier system that we use

uh and basically the whole financial community or finance community

uses this system to establish business credit.

You could actually go out and get 20-30, you know

lines of credit or vendors and things like that.

Um But when you actually build cache lines of credit

based off of your business credit not your personal credit,

you have to have some type of strong foundation so

that when you apply you actually get approved.

Um One of the factors is, so when you're looking

at actually getting approvals there's a thing called merchant cash

advance or M.

C. A.

M. C.

A. Is like high interest types of lines of credit

based off of accounts receivables in your business.

Um versus long term debt.

You could actually go out and get long term debt

that has low interest.

You can get business credit cards that have 0% A.

P. R.

Within a certain timeframe 18 to 21 months.

You could use this money make the minimum payment and

actually scale your business um You know having really cheap

working capital from using existing lines of credit.

The way that you actually pull your credit for your

business is through Nav.

There's a site called knob.

You can actually look up your personal and business credit

using this helps you keep track of it the growth

because there's different credit bureaus so there's like Dun and

Bradstreet that's out there.

There's a Fico business score you really want to know

what your business is performing on the business credit side

before you start applying for some of these accounts in

the future.

Alright so now we're getting to the four step.

The fourth step is really evaluating how you're going to

build out income And to build our opportunities using the

existing cash that you currently have.

So in your business for example you might have $20,000

coming in a month but you're spending is at $15,000.

So you could actually use that 20,000, go to Fintech

institutions, uh certain companies expense management platforms and they'll match

what you have coming in.

So you might have 20,000.

Now you go to 3 to 5 of these institutions.

Now you have 80,000, you could use that 80,000 to

either buy assets for your business equipment or you could

actually dump it into marketing to grow that business hire,

staff, expert systems, uh you know, increasing employees, um your

overall online experience, things like that.

So once you get into this there's more opportunities to

make more money.

Once you start making more money you have more cash

flow coming into your business account, you can now negotiate

equity partners or venture debt.

You could get into syndication.

For example, if you own a real estate brokerage, you

can now look at property management with joint partners in

which other realtors come in.

You start managing your own properties.

You get into like syndication on multi family properties, like

an L.

P. G.

P. Structure.

All that's done.

Uh post the time that you actually have money coming

into a business bank account and you have a business

structure in place.

So what does it come down to once you have

all this structured, you have business that's making money, it

comes down to the amount of income you have coming

in and what those margins are.

So you might have a $5 million dollar gross income

business. But if your margins are really low that business

is going to be have a lower evaluation.

So when we're looking at buying established businesses were looking

at those margins is their efficiencies that we could come

in and and change you know, so like can we

make that business more efficient?

Can we lay off workers or hire workers that can

do a better job?

Is there better systems, better software that we can use.

Is there better markets, is there additional revenue streams?

So when evaluating businesses including your startup that you may

be working, we're going to be looking at tax returns,

we're going to be looking at P.

And L.

Statements, the balance sheet and we're going to put together

a Proforma.

So there's different metrics when evaluating businesses, there's Ebola, there's

also S.

D. E.

Stands for sellers, discretionary earnings.

These are metrics that evaluate how the business is performing

um that the broker or how that business is being

presented to you?

These are the numbers.

So we actually go through those numbers and we adjust

those based off of a different formula that is in

our best interest to buy that business.

So what is your acquisition strategy, why are you looking

at businesses to buy?

Why are you looking at real estate to buy?

You're doing this so that you establish wealth, it gives

you freedom.

It allows you to do some things that you couldn't

do working a regular day job.

Uh There's a certain vertical that you're going to be

more comfortable with a certain industry.

Um you might need help with the management side.

You've never managed a business, there's efficiencies that you're going

to bring in.

There's operations, cost reduction, there is synergy with partners.

So you might be presented the opportunity to partner with

an investor that understands that industry or a JV partner

that's going to come in and run that company for

you. So, talent is a big one right now.

It's hard to hire employees because people don't want to

work. But it also comes down to benefits.

Uh if you're competing, I say company or somebody that's

in that market has better opportunities for talent.

That's where people are going to go.

So you have to have competitive benefits, competitive pay, have

a competitive work culture that people want in order to

keep talent.

Um So you're, you're kind of looking at each industry

what those costs are going to be your autumn.

Izing a process that that on boards, those like uh

for example, HR you might do like a remote HR

agent or interim ceo or Ceo that's going to come

in and help you get to that level so that

then you can attract future employees.

Uh for e commerce, there's affiliate marketing, there's outsourcing like

hiring VHS so there's a strategy that goes to talent

management, sales types.

So when you're looking at buying a business, there's two

different types of sales.

One of them is a stock sale in which you're

actually buying the business entity through the sale or purchase

of stock.

And then there's also a way that you can buy

businesses that are strictly assets.

So assets can be intangible or tangible assets.

You might buy a business that has equipment or you

might buy a business that have like contact lists, email

lists, vendor lists, you know, stuff like that.

All the intellectual property, the websites, the social media profiles.

Some of these are like say their yelp reviews, right?

They might have 10,000 yelp reviews.

Five star ratings for this business.

Well, you know, you probably want those when you're buying

this business.

I eventually you're going to use your LLC.

Or your C.

Corp to buy this business and then you're going to

do what's called doing business as Hors D.

B. A.

In that same business name so that you keep the

same brand recognition and credibility behind your business.

Um So there's two different types.

There's um creative financing strategies, you're looking at seller financing.

Uh there's promissory note financing when investors come in.

They could be like a convertible note structure.

There's different ways that you could onboard investors or JV

partners and, and put that together an illegal binding document

so that everybody is secured.

There's operating agreements that come into play.

All that helps structure the acquisition of the business.

Um, One of the things to keep in mind is

that a business acquisition is different than a real estate

purchase because the SPS terms or the lenders terms are

going to be shorter amount of terms.

So when you're evaluating companies, you want to make sure

that you could service that debt and still have net

cash flow to either pay the investors or to pay

yourself as the owner operator and it's enough money to

make it worth your wild after your servicing the debt.

So servicing the debt allows you to build equity in

the business and hopefully your intentions are to grow that

business so that you make a multiple on top of

that. Uh, there's different strategies when it comes to real

estate. So, real estate, there's like lease options were to

own, when you're looking as far as buying a business,

you could buy the business and then lease the actual

real estate to that business while you own the purchase

of it.

So different different strategies, definitely what you're getting into, more

technical stuff on the legal structure, um, and on the

tax purposes.

So when you're buying a business, there's an actual exit

strategy, you're either buying and holding it, you're buying it

to sell off.

You might sell off to a public company, you might

sell it off to, like a hedge fund or private

equity firm.

There's different strategies as far as are you going to

franchise it or you're gonna have licensing rights, uh, maybe

you created a business that is so good that you

want other people to create a similar business just in

a different state or city.

So, yeah, there's a lot to think about.

If you're interested in buying a business for a living,

reach out to me.

Gaining Financial Independence in 10 steps!

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