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- [00:01]
A
Welcome back to the Business of Beers podcast. Your daily dose of strategies, tools and tips to help you build an eight figure business. Today's episode is a clip from one of my YouTube lives. If you'd like to hear the whole thing, there's a link below in the description. Cheers.
- [00:17]
B
Now, some of these are coming more than just seller financing, but some of these just like acquisition stuff. I mentioned earlier, if you're here from the beginning, that there was this deal that lady was asking $500,000. I thought it was too much. I literally, like, we didn't talk for six months and because I was stuck on the price and I was like totally blind to terms, even though I like, that was like three years ago. Like, I had done a bunch of deals prior to that, but I got, I just got like, sometimes you get stuck in your head and like. So it went on ice for six months. That cost me at least $100,000 of profit. Because as soon as we got into that store, like, we rolled out new compensation plans, we rolled out our advertising, we upgraded the technology, we made literally changes overnight that doubled the business. And so I think about, like the six months I could have got a head start on that thing all because, like, I was like stuck on thinking about the wrong thing. I was thinking about all the reasons why she was wrong and I was right versus asking myself what would I need to believe? Or what would, what would this deal need to look like for me to want to do it? And then, and then we got it. So back in 2018, it was the first seller financing deal that I did where I didn't even know this was like a thing. And this guy came to me, we'd known each other for a while and he says, brian, I want you to buy my store. Here's what I want. Give me 50k down again, it's always 50k, I don't know why. And give me 3.1k a month. And it was gonna be for 5 years plus a balloon payment at the end. I think it was 160k. And again, his store was 100k. You know, I think the purchase price was 350. So it was making 100k profit. He was asking 350. So ultimately said, brian, you can take over my business. It's making $100,000 a year. All I want is $50,000 up front and then you can make payments for me for the next five years. And at the end of the five years, you're gonna owe me a balloon payment. But in five years from now, like, just save up the money and you'll be able to afford it. And I was like, alright, sounds good to me. Great store in the city, right by Penn and Drexel and like all the big colleges here in Philly. And day one, I walk in and I pull up to the place and there's a car next to me. And again, I've never met anybody, right? My whole thing, like, I don't meet people before I buy the deals. And there's this, there's a truck parked and there's this guy sleeping in it. And I'm like, oh great, we got our first customer, right? And then I'm like sitting there waiting, waiting for the manager to come and like, you know, open up the door. And then this guy in the truck, like rolls out, pulls up his pants and walks over the door and unlocks it. And I'm like, oh great, he must be the manager. So I walk in and I say, hey, I'm Brian, I'm your new boss, I guess. And he goes, just to let you know, I'm quitting in a month. And I'm like, okay, nice to meet you. And I learned through the conversation that his routine was like, to go to the shop, to go to the casino, to go to the strip club, to then fall asleep in his casino truck at the shop. And then like, sometimes he showered and sometimes he didn't. I learned that some of the mechanics, like one of the mechanics would go to a bar at lunch and drink, right? But then come back and work on someone's car.
- [03:19]
A
Great.
- [03:20]
B
And the place is a. The phone's ringing off the hook, customers are pouring in. And I'm like, man, this is a freaking gold mine. And we got all these guys in here who are like dangerous to everyone. And so we immediately fired, literally fired everyone. And luckily, like, you know, we had some other people that were able to bring us from some other stores to be able to like bring bridge the Gap. And the next year, I mean, the next year we made $400,000 at that store. We doubled the revenue, we got all these scumbags out of there. We did a bunch of marketing, whatever. That store alone made more money than all my other stores combined. But the bigger lesson was like, think about the hair. The seller comes to me, he gives me a great deal. Of course he knew that this guy was a terrible manager. Of course he knew that there was probably some issues with the technicians, but he didn't want to deal with any of it, right? He was tired, he just wanted to get out. He just wanted someone else to deal with the problems. And, like, you know, I am more than willing to deal with anybody's problems because we have the systems to fix it. But sometimes that's what you're getting into. And just knowing that going in, that the greater the deal on the front end, there's. Chances are there's a bunch of, like, hair and ugly things on the back end that you're gonna have to be able to fix and sometimes fix them extremely quickly. Or, like, if I didn't do that, it would have been a complete disaster if someone got hurt, if. Whatever. All these things. And so talk about reputation and whatever. So just know that. Know that you are going to possibly have some things that you have to fix immediately. Now, that was the first time I had. It was like that. Luckily, it's early because now every deal since I'm just pretty much prepared for, like, literally anything could happen, and we're ready to go. I would be careful of, like, the unprofitable stores. If you don't know what you're doing in that you're hungry for a deal. You find the store that's barely making any money, and again, you want to do this thing. You want to buy the seller financing, you want to get the whole deal, you want to grow. But just be, like, really careful of that, because, like, I mean, I have one store, so I bought a package of seven stores once, and one of the shops was losing. I'm gonna say it was like $80,000 a year, like, in the red. Like, sales were that bad, and the reputation was terrible that every single year, this store was burning $80,000 of cash. The rent high. All the things are high. Like, we're spending money on advertising. Nobody's coming into the store. Like, it is. It is a loser, right? By all accounts, it's just a shame because it used to be one of the top stores in the state. But whatever. It's a loser. And, you know, as part of the package deal, it was okay because, like, the total net was fine. But what if the seller didn't sell me the whole package and he went to somebody and else. And what if I owned just a single store over here that was, I don't know for easy. For. Let's just say. Let's just say for easy math, let's say I was a single shop owner. I had a business that was making $160,000 a year. This guy comes to me and says, hey, I got. I want to sell you the store, man. I'll give you no money down and, you know, just pay me 2k a month for like, whatever doesn't, like, doesn't even matter what the terms are. And. And you see that it's losing money and you think to yourself, well, I can turn it around. I know that I can do it. Blah, blah, blah, blah, blah. All these things, like, you're really confident in yourself. But here's the challenge is that immediately the thing's losing money, right? And you're 160k that you thought you're making the day you buy it. Obviously there's month to month, and I'm talking in terms of years and all this stuff, but I want to get to my point that this single store literally cuts your profit in half and that maybe this store is gonna take way longer than you think it will to get it up and going. And that maybe like, even today we just did okay this month. But, like, I think the next year I lost 60 gain and then I lost 50k and then it was 30k. Now I'm like, breaking even and maybe we'll turn a profit, you know, in 2026 there, but it's been like five. I've been in the store for five years and I haven't made any money there. I mean, I've lost money every single year. And it's getting better. We're growing the reputation, we're fixing the things, blah, blah, blah. But, like, all that being said is that sometimes these deals that have been, like, beaten down that are really unprofitable could potentially like, wreck you if you're really small and just starting out. For me, I have 36 stores. Like, I can sustain a couple losers knowing that, like, you know, in the end it'll all be okay. But, like, if you're. If you're not in that situation, you just be really careful on them because the worst thing you could do is, like, you. You know, you're doing well, you're building your systems, you take on this then total, like, shit store. And then all of a sudden, it is, like, totally wrecked all the things you're billed. Now you're stressed and like, and now this other store is suffering because all of your attention's over here. And just like, I wouldn't take a loser store on until you're like, you have enough, like, bandwidth and team and, like, cash flow to be able to tolerate the wherewithal of it all. So that would just be my word of caution as I've been through it many times and I've worn many scars of unprofitable stores that I got with seller financing on killer deals because they wanted to get out, right? And ultimately, as a business owner, the better you get at operating the thing that you do just that, the easier it does become to turn these things around and so focus on the things that you can control. We focus on cash flow, we focus on building a team, and then we can go from there.