Have you heard the saying, “It takes money to make money”? The truth is, sometimes it does take money to make money – but often it doesn’t. It’s possible to buy a business with no money… if you use the following strategy.
A lot of entrepreneurs lament about not having enough money to grow their company, or say they don’t have enough capital. But when I started my own business, I had neither money nor capital.
When you have no money, you have to get creative to make things work by coming up with good strategies to get sales. If you don’t have the money for high-quality marketing campaigns, for example, you’re forced to think outside the box and that’s the exact type of thinking that will get you far in business.
When you think of it that way, having no money could actually be a great thing for your business because you’ll develop cost-effective strategies that you’ll carry with you throughout your journey as an entrepreneur. It’s these creative strategies that will save you and your business money down the road.
Watch this video about how to buy a business with no money.
You Don’t Need Money, You Just Need A Better Strategy
Let me tell you a story about a flower shop owner named Matt. He owned a flower shop in his little town, and it had been doing well for several years. His competitor owned the only other flower shop.
One day, Matt got approached by the competitor – an older gentleman. The competitor wanted to sell his flower shop to Matt because he was getting old, and he wanted to retire and travel the world.
Matt realized that if he bought this flower shop, he’d own the only two flower shops in town. He’d have a monopoly and everyone in town would only buy flowers from him.
So he asked the older gentleman how much he wanted for his flower shop, and found out the asking price was $50,000. Matt said that he didn’t have $50,000, but the other man stood firm at his price.
So Matt went home and talked with his wife about the possibility of getting a line of credit or getting a loan. He explained that he could double his business if he bought this other flower shop but she thought it was a crazy idea.
Matt called up a brilliant entrepreneur for advice and a potential investment. He told the man, “Dan, could you loan me $50,000?” Matt explained that the flower shop was in a great location and with his other flower shop, he’d corner the market and double his business.
The smart businessman told Matt, “You don’t need my money. You need a better strategy.” The businessman went on to say, “Matt, ask yourself this: Who would benefit from this purchase? How do you add value?”
How To Double Your Business With No Money
As Matt thought about all the people who would benefit from the purchase (the older flower shop owner, Matt himself, the customers, etc) it was the businessman who pointed out who could potentially benefit the most, and who would therefore be willing to help Matt. The supplier.
You see, currently, Matt only used one supplier to stock his flower shop. This supplier got about $125,000 per year in orders from Matt. The older gentleman had been using a different supplier to stock his flower shop.
As the new owner, Matt had the power to switch suppliers and double his current supplier’s business. Instead of $125,000 per year of business, Matt could now give his supplier a quarter million in business every year – as he’d be filling double the orders.
All Matt had to do was convince his supplier to buy the exclusive rights to provide for his flower shop for the next five years. Matt could charge $25,000 for these exclusive rights. When Matt presented this proposal to his supplier, it was a no brainer for them.
For $25,000 they would be getting an extra $125,000 worth of business for the next five years. Of course, they happily agreed and paid Matt $25,000 to seal the deal.
With that, Matt went back to the older flower shop owner with a new proposal. He told the older gentleman that he’d be willing to pay $60,000 for the flower shop instead of $50,000 as long as they could agree to a payment plan.
How To Use Resources, Time And Skills
He’d be willing to pay $25,000 up front and the rest in installments. Since the older gentleman stood to gain an extra $10,000 if he agreed to more flexible payment terms, it was quickly agreed upon.
With that, Matt was able to buy the flower shop without spending a dime of his own money. Without spending anything out of pocket, Matt doubled his business. How? Because of a smart business strategy.
The difference between the average entrepreneur and a great entrepreneur is knowing how to use leverage. It’s coming up with creative ways to leverage other people’s resources, other people’s time, other people’s skills and other people’s money.
This requires some out-of-the-box thinking where you figure out who could benefit and who would therefore be willing to help. Leverage is one of the best ways to make money without spending your own money.
Final Thoughts On How To Buy A Business With No Money
It doesn’t always take money to make money. If you don’t have money, you just have to get creative. One way to do this is by using leverage.
Matt was able to buy a flower shop without using a dollar of his own money because he was able to negotiate, and using leverage, bought a business at more than the original price, but without spending a dime.
A great entrepreneur is always thinking about who will benefit from a deal and who would be willing to help. Remember that!
“It takes money to make money?” Do you agree? Comment below.