This is Magic Johnson. He owns 400+ boring businesses that have made him a billionaireย (he even taught Shaq how to do it).ย Iโm no Ex-NBA Starโฆย But I still own 6 boring businesses that make $725k per year.ย Hereโs how I bought them as a normal guy:
โShaq, itโs okay to be famous & all that, but at some point, you want to start owning things.โ
Thatโs the advice Magic Johnson gave to Shaq in 1996.ย Throughout his 13-year NBA career, Magic made just over $40,000,000.ย But heโs made 25x since โretiring.โ
Magic has bought 100s of businesses:
โข TGI Friday (1 location)
โข Starbucks (125 locations)
โข Fat Burger (200 locations)
โข Burger King (31 locations)
& even some health clinics across the US.
While that seems like something only an Ex-NBA star could doโฆ Iโve done something similar.
& I started doing it while working my 9-5.
Iโve bought 6 businesses with the bank’s money that pays me $725k per year.ย Anyone can copy the simple method I use.ย Hereโs my full blueprint (no gatekeeping):
1) Pick a recession-proof industry (HVAC, Accounting, Laundromat, etc.)
2) Use a broker (or BizBuySell) to look for businesses that are up for sale.
โข $10k+/month cash flow
โข $500k-$1M price
โข 5 years old
3) Apply for an SBA Loan
4) Bring your tax returns & W2 pay stubs
5) Explain which business you want to acquire and why you are buying it.
6) Hire an accountant to analyze the financials of the business youโre looking at.
(btw, you can pay them in equity)
7) Look for consistent, increasing revenue
8) Talk to sellers (see why theyโre selling)
Note: I usually buy from retiring Boomers
9) Make an offer 2.34x SDE (cash flow)
Example:
If the seller took home $400k last year, you should make an offer of $936k.
10) Use your SBA loan to finance 90%
11) Find an investor who’ll give you the last 10% (give them 15% equity in return.
Congratulations.
You bought a business with $0.
Letโs say the biz cash flows $33k/month.
I pay the investor 15% ($5k/mo) and I pay a GM to run the daily ops ($5k/mo)
Then I pay $12.6k in debt servicing (which is 11.5% interest rate over 10 years).
Iโm left with $10,733 per month.
Iโm just a regular guy (ex-corporate).ย Iโm nowhere near Magicโs level, but business acquisition still changed my life.ย I earn way more than my old job at JP Morgan, and I only work 20 hours per week.ย If you want to learn how to do the same…
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