Here's the truth. Most people are playing the wrong game when it comes to building wealth. Because everyone says, start a side hustle, grind for years, build from scratch.

But here's the problem. Most businesses fail. The numbers don't lie.

Somewhere between 70 and 90% of startups fail. And then you risk your time, your money, your sanity, only to realize the odds were stacked against you from day one. But there's a better way.

Instead of starting from zero, you can buy a business that already works. It has customers, it has employees, it has cash flow. And here's the part nobody teaches you.

You don't need to be rich to do it. I'm going to show you exactly how people buy profitable businesses, even if they're broke. So here's the game plan for today's episode.

I'll give you the five ways to buy a business with little to no money. I'll show you the three numbers that matter the most when analyzing a deal. And I'll break down the exact steps to find a business, structure the deal, and then take ownership.

By the end of this episode, you'll know how regular people are buying businesses instead of starting them, how to use financing, seller deals, and leverage to make it happen, even if you don't have stacks of cash sitting around, and then how to avoid the rookie mistakes that can, boom, blow up your deal. So if you're serious about building wealth, buying a business is one of the fastest, smartest paths there is. That's a lot of S's for a guy with a lisp.

All right, let's go ahead and get into it. So here's the problem. Starting a business from scratch is actually pretty risky.

So I shared the stat, 70 to 90% of startups fail. And then you spend years grinding, building a website, finding customers, hiring people, figuring out operations, only to realize it's not working. And when that happens, it's terrible.

Trust me, I've started businesses and they failed, and it's not a fun experience. Meanwhile, there are millions of businesses already built, already profitable, already producing cashflow, and thousands of owners are looking for someone like you to take them over. This is the biggest wealth-building opportunity no one talks about.

And I was just listening to something the other day, and they were saying how 11 out of 12 businesses in the US won't sell. And they won't sell because, number one, the owner doesn't have anybody to sell them to. Number two, the owner may value the business more than what it's actually worth, or maybe the business just isn't sellable because there's key man risk, or key person risk, rather, and the company doesn't have systems and processes.

So there are a variety of reasons why all these businesses won't sell. But if you can go into the right opportunity with the right tools that we're gonna talk about today, then you can have an incredible chance to buy a business and from day one start realizing profits. All right, so that's what I wanna talk about.

What a great opportunity. So why would you wanna buy instead of start? So I talked about getting instant customers is one big thing. I've started businesses, and it's really exciting to register a business with the Secretary of State, set up an EIN, create a logo, create a brand guide, figure out what colors you wanna have on your website.

That's all fun, it's exciting. But then you gotta go out there and get customers. And sometimes getting customers is a complete grind.

I was posting about this the other day on LinkedIn, how we're living in this very interesting time because the cost of technology development, so creating an app, for example, is actually decreasing. It's decelerating at a very fast pace. But the cost of getting attention, or in other words, the cost of acquiring leads, is increasing.

So it's easier now than ever to start a social media platform. For example, you can copy Facebook, and I would say within probably 30 days, you can have a lookalike platform that operates and functions like Facebook. Now maybe there's some back-end tech that you can't really copy that fast, but overall you could create a social media platform pretty quickly, especially with AI and low-code tools out there.

The problem is getting people to pay attention to your platform and wanting to actually join. So getting customers can be a challenge, and it may take years to ramp up your business. And that's why buying instead of just starting from scratch can give you instant access to these customers.

And then guess what? If you have customers, existing customers, you have instant revenue. And you can leverage that instant revenue. Maybe you buy a company and they don't have a very strong offer.

Maybe they don't have a really good sales team. And you could just go in there and change the funnel. You can leverage your social media platform or your skills, and you can increase revenue based on the existing customers that the business already has.

There's definitely leverage there. You have an instant team. So you're buying a business with people in the right roles, and sometimes they're not always in the right roles, and sometimes you don't have the right people, but nonetheless, you have a team that you can start from and then build from there.

And then instant systems. So if you're buying a business, typically they'll have systems. Even if they're terrible systems, you can leverage the systems that they have and then always improve them.

Instead of starting from scratch and having like 100 new systems, you have to build from nothing. Okay, so instead of building from zero, you step into something that's already producing money, and that's the benefit. And right now, like I said, there's this wave of opportunity.

10,000 baby boomers retire every single day. Many own businesses, and they're looking to sell. They don't want to shut it down because shutting down a business, number one, is disruptive, right? They have to tell everybody they're closing down their business, and there are typically costs associated with closing down a business.

They care about their legacy, what they built, and they want somebody to take it over so that legacy can continue on. And this is where you can step in.

So let's talk about the five ways to buy with little or no money.

When I was starting out in business in my early 20s, I thought doing a leveraged buyout, an LBO, was something nearly impossible because number one, I thought you had to go to Harvard or Wharton or some great Ivy League school in order to have investment banking experience and to ultimately get in private equity where you're buying companies. And I also thought that you have to have millions of dollars in order to buy a business. And in fact, when I was a kid, my sister loved the movie Pretty Woman with Julia Roberts and Richard Gere.

And she loved the whole love story and the Cinderella transformation type of narrative. And I don't even remember a lot of that. I just remember that Richard Gere, the main character, was in private equity because he was buying businesses and breaking them apart and then selling them at a profit.

And I thought, wow, that sounds really interesting. But then as I got older, like I said, in my 20s, I thought it was so impossible until I realized there are ways to structure the deal and there are ways to buy a company with no money. So let's talk about those five ways.

Number one, there's seller financing. So how seller financing works is that the seller becomes the bank. Now you may wonder, why would a seller ever want to be the bank? It's because if you go to them and say, look, I want to buy your business for a million dollars.

I just don't have the money. But tell you what, if you give me a loan and I'll pay you back your principal plus 10% interest or whatever you agree to, the seller may be motivated because number one, they want to sell their business. Number two, they may like you and they want to give you an opportunity.

Number three, they may want to earn interest on their money. And number four, you can always say, look, use the business as collateral. So if I don't pay you back, just take your business back.

Now, sure, there's risk for the seller because they may be thinking, well, I don't want to sell you the business. Then you tank it. And then I take the business back because you default on your loan with me.

And then now the business is destroyed. Sure, there's that risk and that's a real risk. But I think if you can prove your competence to the seller, and if there's that trust between them, then a lot of sellers would be willing to do seller financing.

So you pay them over time, often with no bank involved. So you create a promissory note, you agree to the terms, and there you go. So this is very common on small deals, typically between the 500,000 or $2 million range.

Or you could buy a bigger business, for example, like a $20 million company, and maybe a part of the deal, not all of the deal, is seller finance as well. So that's one way to buy a business with little to no money. Let me just add on to that real quick before I move on to number two.

You could go to a business owner and say, look, if you sell your business to me, I'll pay you back by giving you 50% of the profits until I pay you back in full plus interest, right? So there's so many different ways to structure it. All right, I just wanted to throw that in there.

Option number two for buying a business with little to no money is through SBA loans. And this is in the United States. These are government-backed loans for acquisitions. Sometimes SBA loans only require like 10% down.

Do your own research on this, but it's around that range. And sometimes you can even get away with less if you combine it with seller financing, with what I just talked about. So SBA loans are a great way to do it.

Number three is investor partners. So you find the deal, they fund it, you run it, and then you split the ownership or profits. So in other words, you become the general partner, the GP, and then you go find limited partners, LPs, and you say, hey, give me money for equity.

And then you have cash to put into the deal. You may fund the rest of it with seller financing or with bank debt. And then you have these partners, you run the business, and then you get, let's say, 20 or 40% of the upside if you ever sell the company.

So there are a lot of ways to do it, but investor partners can provide you that cash if you don't have it.

Number four is through earnouts. So I'm not a big fan of earnouts. I've seen them work sometimes. I've seen a lot of them go sideways, but let me just explain this. You basically pay a part of the purchase price from future profits. So it's great when the seller believes in the business and wants to see it succeed.

So if you go to somebody and you're like, okay, I think your business is worth a million dollars, and they're thinking, yeah, and it could be worth more if we improve the offer, put in better systems, watch the economy mature and grow, whatever it may be. They may be bullish about the future of the seller. So therefore, you can say to them, look, I'll end up paying you, I know it's worth a million, I'll pay you up to $2 million if it meets these performance guidelines, and I'll pay that over time. For example, I'll give you 50% of the profits until I reach this milestone, whatever it is. So earnouts are basically when you pay for the company or you set a valuation based on future performance.

The reason why earnouts can go south is, let's say you structure it and you're like, all right, if the business just continues as is, it's worth a million bucks. If we grow revenue by 20% next year, I'll give you 1.1 million. If it grows by 40%, I'll give you 1.2. I'm just making up these numbers, right? Then if you're the buyer, you may say to yourself, I know this is kind of crazy, but you're like, I don't want to pay him more. So you artificially tank your revenue so you don't have to pay them these earnouts. I know it sounds crazy, like why would you hurt yourself in spite of the seller? But some people do it.

Or let's say it's based on profit. If you don't get clear on what profit actually is, then the buyer, the person operating the business, can run things through the company. For example, they spend a lot of money on sales and marketing that's gonna pay off in the future, but it tanks profit in the given year. Then you get into an argument of what was actual profit, what are legitimate expenses, et cetera. That's where earnouts could get sloppy.

All right, the last way to buy a business with little to no money, this is number five, is doing equity rollovers. This is when the seller keeps, let's say, 10 to 30% of the ownership. Then it lowers what you pay up front, and then the seller stays involved for a smoother transition. In other words, the seller sells the majority of the company, but not all of it, and therefore the purchase price is less so you can afford it while you're building up equity of your own.

So those are the five ways. Let me just repeat them again real quickly. We have seller financing, that's number one. SBA loans are number two. Investors, right, who will give you the cash to put towards equity, that's number three. Earnouts, number four. And then five, these equity rollovers.

Isn't that cool to know, though, that there are so many options out there and so many different ways to structure deals? Now, some sellers are gonna say, look, I just want cash, especially if they have a lot of offers on the table. But I believe there are some sellers out there that will be creative with you and will work with you on the deal structure so you can actually buy their business. So that's the good news.

If you wanna buy a business, there are opportunities out there, and you don't need to be sitting on $5 million to buy a $5 million company, right? You can use leverage.

Right, now let's talk about the three numbers that matter the most when you're doing a deal. So let me be crystal clear about something. Cashflow is everything. If you listen to my content, you know I talk about cashflow all the time. Cashflow is the bread and butter of every deal. If the business doesn't generate cash, the deal doesn't work, period.

Forget about how cool the business is. Forget about the logo, the website, the brand, the equipment, the office furniture, whatever it is, the pet dog that's gonna come with your deal. None of that matters if it doesn't produce reliable, consistent cashflow. That's the key.

Why? Because when you buy a business, especially with debt, cashflow does three critical things. Number one, it pays off the debt you used to buy the business. Number two, it pays you as the new owner, your salary, your dividends, right, and you wanna get paid in this deal. And then number three, it funds reinvestment. So you can grow the business, hire people, upgrade the systems, buy equipment, whatever it is, and create even more value.

If the cashflow isn't there, you're dead in the water. So the first number you must obsess over is cashflow. I can tell you so many people get excited about businesses. They're like, oh my gosh, that's the best pet sitting business or laundromat or plumbing company or tech business, whatever it is, and they think, I would love to own it. But if there's no cashflow, it doesn't work. Just stop right there. It's never gonna work. Unless you have a ton of money, you wanna put your own money into the business, but that's called a not-for-profit, all right.

So the technical term you'll see is either SDE, seller's discretionary earnings for small businesses, or EBITDA, which is just a nerdy way of saying profit. It stands for earnings before interest, taxes, depreciation, and amortization for bigger deals. SDE is basically what the current owner takes home. It's the profit plus any personal perks the owner runs through the business, like their car, their insurance, their travel, et cetera. Right, so they're gonna add those things back, and then that will show you what the actual SDE is of the business.

In other words, it'll show you if you buy the business, how much discretionary earnings can you expect to take out of the business. Now EBITDA is pure operating profit before debt, taxes, and depreciation. Both numbers answer one question. How much real cash is this business throwing off? Because that's what you'll need to pay off the loan to pay yourself and to grow.

But here's just a little caveat, and I don't wanna get too technical on this episode because I'm not standing in front of a whiteboard. I'm trying to explain this over audio. Cashflow though, like EBITDA and cashflow are not the same thing, right? Because you have to account for things like working capital and CapEx. So EBITDA does a pretty good job of trying to estimate cashflow, but just a side note, EBITDA is not the same thing as free cashflow, all right?

But let me give you an example to keep things really simple. Let's say a business generates $300,000 in SDE. You take out an SBA loan. The loan payment is $100,000 per year. That leaves you $200,000 left for you and the business. You pay yourself $120,000 a year, and then you can use the remaining $80,000 to reinvest—to hire a salesperson, upgrade systems, market more, or whatever drives growth.

This is why cashflow is everything. But like I said, SDE and EBITDA—even if you talk to a broker, sometimes they confuse those with cashflow—but it's not cashflow. This is where you're gonna wanna go through the exercise of finding cash from operating activities on the cashflow statement and subtracting out capital expenditures, or take your net operating profit after tax, add back depreciation and amortization, account for changes in working capital, and then take out CapEx, and you'll arrive at free cashflow as well.

So, if you haven't already, you can sign up for the Financial Pro Course at BYFIQ. It's totally free. And in that course, I walk you through this actual calculation.

All right, so if you want the details on that, be sure to check it out. Also, I have other videos on YouTube and whatnot where I walk you through cashflow if you're confused on what that is. But I just wanted to point that out. When you get down this path, just remember SDE and EBITDA aren't necessarily free cashflow.

All right, let's talk about the two other numbers you must know. Debt coverage ratio—this is the math behind whether the business can comfortably afford the loan. So here's the rule of thumb: Cashflow should be 1.25 times the loan payments, minimum. All right, that's key. If the loan costs, for example, are $100,000 a year, the business better be throwing off at least $125,000 in cashflow, or preferably more so you have a buffer.

If it's barely covering the debt, red flag—walk away. It's not gonna work. It's not worth it. And you don't wanna manipulate a financial model. I've seen this before, where people are so excited about the deal in buying the company that they'll mess around with the future forecast of the business. And like, well, maybe we could grow, instead of 10%, we could grow 20%. And they change the numbers, and then the numbers show that it works. But you're just manipulating reality.

So just steer clear of it. If it doesn't work with the margin of safety, then just walk away. And that's number three, right? So that's what I wanna talk about next, is margin of safety. You have to ask yourself, what happens if sales drop by 10 to 15%? Can the business still pay the debt, pay you, stay afloat?

And if the answer is no, you're cutting it too close. One of my first businesses I was gonna buy was a tree company. And they were doing about $12 million a year in revenue. They had about a 12 to 15% bottom line. The deal worked, but it was tight. And when we got to the final negotiations, another company came in from Chicago and ended up buying the company. And we lost the deal.

But I told myself, I'm like, I'm not gonna go into my first deal and buy a business when the numbers are this tight. It's just the margin of safety wasn't there. And so I decided to walk. So that was good for me.

So a good deal isn't about just buying what works today. It's about surviving when things wobble a little bit—because trust me, they always do. So you want that margin of safety.

So here's the filter. If the cashflow pays the debt easily, covers your salary, leaves room to invest—it's a deal worth pursuing. If not, walk away. No amount of optimism or hustle will fix bad math. And trust me, there's so many opportunities out there. So if your first deal doesn't work, it's okay.

Just remember—cashflow is the engine. Debt coverage is the safety check. And then margin is your cushion. Nail these three numbers and the rest—the deal structure, negotiations, operations—they all become a lot easier. This is how people buy their way into wealth using the business's own cash to pay for itself.

So let's talk about the rookie mistakes that kill deals. You don't want to be a rookie. I've been a rookie before. Don't go down that path, all right? It's not good.

Rookie mistake number one: overestimating growth. If it doesn't cashflow as-is—and I was talking about that—it's not a good deal. Don't manipulate the financial model. Don't put your rose-colored glasses on thinking that the future is magically gonna be so much better just to make the numbers work in your forecast, okay? Because you're just tricking yourself. So if it doesn't cashflow in its current state, walk.

Another rookie mistake is buying a job, not a business. If the owner is the business—meaning they do the sales, they do the ops, they do everything—you're not buying a business, you're just buying a job. This is called key man risk. If the person walks away and you don't fill that gap, and revenue drops by more than 10%, there's key man risk. Be careful.

Maybe at first you have to buy a job. Maybe you have to jump in there and do sales and run systems and everything else. It can work if you plan to hire someone else later to replace you. Just don’t get stuck buying something 100% dependent on you forever.

Rookie mistake number three: customer concentration. If one customer is more than 30–40% of revenue—red flag. I was looking at a company once that looked very attractive, and then I saw that 60% of the revenue was coming from five customers. If those five walk, the business tanks. So I walked away.

Rookie mistake number four: skipping due diligence. You must inspect the financials. This is why I always talk about knowing the story behind the numbers. If you don't know how to read financials, that's okay. Find somebody who does.

That’s what we do—we go into companies, dive into their income statements, balance sheets, cashflow statements, tax returns, and more. We use a giant list of requests to inspect everything carefully. So make sure you get a good CPA with deal experience. And a lawyer too. Don’t cheap out on that.

Now look, due diligence can be a pain. So here's my advice—before you jump into reviewing hundreds of documents, build a financial model first. Just run the numbers with basic info. If the model works, then go deeper. If it doesn’t, you saved yourself a ton of time.

All right, so those are the rookie mistakes. Now let me walk you through the actual playbook—the step-by-step way to buy a business.

First, start searching. Even if you have a full-time job. I’m always looking for businesses to buy, and you can do the same. Go to sites like BizBuySell, MicroAcquire, Flippa. Look local. Google businesses in your area. Call them.

Second, filter smart. Target businesses with $500K–$3M+ in revenue. Look for strong track records, owners retiring, low customer concentration, decent margins. Define your criteria so you can cut through the noise.

Third, reach out. Once you find a target, use a simple script: “Hey, I'm looking to buy a business like yours—have you considered selling?” Then go from there.

Fourth, run the numbers. Check SDE, EBITDA, and most importantly, free cashflow. Then look at debt service coverage and stress-test the margin of safety. Build your model. If the numbers work, you move forward.

Fifth, structure the deal. Think through your capital stack. Maybe it’s 70% SBA loan, 20% seller finance, 10% cash. Or it could be seller finance + earnout. Be creative.

Sixth, perform due diligence. Hire a CPA who knows M&A. Review financial statements, tax returns, contracts, leases, and customer info. Validate everything.

Seventh, close and transition. Sign the agreement. Keep the seller involved for 3–6 months if you can. Learn the ropes. Step into ownership. And sometimes the best way to be a CEO... is just to be a CEO.

And don’t worry if you haven’t been a CEO before. If you understand finance, strategy, operations—and the industry—you’ll figure it out. Just believe in yourself.

This is what’s never taught in school. Financial literacy is the starting line. But ownership is the goal. Cashflow is the goal. Freedom is the goal.

And you don’t need to be rich. You just need to know the rules of the game, understand the numbers, know how to structure deals, and follow the process.

This is how real wealth is built. Not from skipping lattes. Not from hoping the stock market goes up. You can literally buy your freedom.

So start searching. Run the numbers. Get familiar with deal structures. And if you want help, I’ve built tools, checklists, and calculators to help you do it right. Just head to BYFIQ.com. There’s a free Financial Pro Course with over 100 videos and quizzes. Or if you want the fast track, check out Win With Finance.

If you know someone who needs this message, share this episode with them.

It’s real. It’s doable. And it can change your life.

All right. I'll see you next time. Take care of yourself.

Cheers.