Lance Hood:               Richard, when we were talking on the phone the other day you told me that "Starting a business is a rich man's game, and buying a business is a poor man's game." Now honestly to me I would think the opposite holds true.

Richard Parker: I could understand how your interpretation would be that the opposite holds true, but let me run you through some statistics if you will.

                                    The average business that's started up, of all the startups, 96% of them fail within the first five years. So to me I look at this and regardless of what your initial investment is, if you're out of business within five years - I think it's like 80% fail in the first three years, and of those that are remaining 80% of those fail in the next two, so 96% fail in the first five years. And to me you look at this and if you're going to lose your entire investment within a five year period or less, to me that's a rich man's game meaning that you have to have that money to burn because your chances of success are very low.

                                    And so when I look at that and someone's starting a business you have to look at it as though it's not quite like throwing your money off a high rise, but the failure rates are so enormous that you really need to be a position where that money is not going to be that important to you. Because chances are if you follow the numbers you're going to lose it. Whereas if you take a look at an existing business that has ongoing infrastructure. It already has a provable business model, and it's been sustainable and more often than not has already gone through that whole five year hump where it's throwing off profits immediately that you can prove versus a startup where you have no idea what it's going to deliver. I mean to me that's a poor man's game only to the extent that the poor man can't afford to lose that money, or their investment that they make.

And so when you have something where your chances of success are far greater with an existing business then they are with a startup that's a number to me where it's a poor man's game because it's someone who can't afford to lose their investment.

GOING FROM EMPLOYEE TO EMPLOYER IS EASIER THAN YOU THINK

Lance Hood:               How realistic is it for someone working 9 to 5 to buy an existing business? Because I just don't see that most people would ever even think that they could possibly switch places with their boss. I mean, how would you possibly afford to buy an existing business when you're living on a salary?

Richard Parker:           Well, it's a great question because I would venture to say if you were to ask 1000 people or 10,000 people that had any inkling to be in their own business of whether or not they thought about starting a business or buying a business, I would venture to say that most of them would think that starting a business comes to mind. It seems to be more realistic or more achievable to the average person where in fact very much the opposite holds true. But someone who's working 9 to 5 to me that's all the more incentive.

I remember reading a survey on CNN probably about a year ago and they asked these people to rate their job. The had a scale of one to ten with ten being I love it to one being, I dread going to work in the morning, and there was answers in between. The results were that 74% of the people surveyed expressed the fact that they hate their job.

                                    Now I don't know about you. I spend quite a bit of time working and I'm sure most people do as well. And even if it's 9 to 5 it's still with your commute back and forth. It's still the majority of your day. And if you hate your job, I mean you have to figure out a way how to get out of there. Most people unfortunately get mired in their job. It's paying the bills. They don't like what they're doing and they don't think about the ability to broaden their horizons or how are they going to get out of it. It was a case of saying, "Look, my desire to work for someone else for the rest of my life is like zero on a scale of one to ten and I have to get out of this."

                                    So finding a business or spending the time looking for a business, whatever is easily done because so much of it can be done online and through phone calls during off hours, but it's certainly very realistic. Obviously you don't want to do this type of work when you are working for someone or during the workday, but clearly as far as investigating what needs to be done, educating yourself, searching for businesses, setting up calls, meetings, appointments, et cetera can easily be done in off hours. Anybody who tells me that they can't buy a business or go into their own business because of the fact that they are working from 9 to 5 is just someone who to me has absolutely no desire to get into their own business.

Lance Hood:               So what do you tell someone who's thinking, "I'm too old. I don't have enough money. I don't have enough credit. I don't even know where to start." And I say this because I know that most people would love to own their own business but they have these mental stumbling blocks.

Richard Parker:           Those are all great questions, right. So let's look at each one of those.

                                    You're too old. Well I'm not so sure what too old means. And I laugh when I think about it. It was my cousin's 50th birthday and she, you know, one of my favorite cousins and I called her up. She was turning 50 and we've been so close since we're babies and I said, "I just can't believe you're turning 50." She said, "It's okay. Fifty is the new 35."

                                    First of all, people's attitude related to age has changed dramatically over the years. That's the first thing. The second thing is when you take a look at someone's age I - typically speaking when you're in that 35 to 55-year-old range it's probably when you're best poised to get into your own business. And I realize that's quite a large group but it's the time when you've had the benefit of working for a number of years to acquire some good experience. You're able to identify the skills that you're really good at. And you're probably in a position financially that may be better served to go into your own business and you have the advantage of wisdom and a network and what have you.

                                    So, I don't buy the idea of being too old and I think the classic example that everybody refers to is Colonel Saunders and Kentucky Fried Chicken who was 67 years old when he went into business. So with all due respect to anybody who tells me that they're too old I simply don't believe it and I don't subscribe to that at all. As long as you have the wherewithal, the desire to do it, there's no reason why age should prohibit you in anyway shape or form.

                                    If someone were to talk about the fact that they don't have enough money, well how much do you need? I mean that's the point of all of this exercise which is you don't need anywhere near the amount of money that people think that they may need.

                                    Now I don't want to mislead anybody to think that you can go into your own business, have absolutely no money and be able to buy a million dollar - a company that's throwing off a million dollars a year. I mean it's going to be a little more challenging. It can be done. But again, I don't want to be misleading to people. There is a correlation between the size of business that you could potentially buy and what you may or may not have to invest. But the important part of the goal is to be able to get into something. And into an existing business that provides you with that platform so that you could generate money right away and build the business.

                                    I talk about - in our materials we talk about how to buy a good business at a great price. The idea is to get a good solid business and with your skills applied to it turn it into a great business. You build substantial value and increase your earning power exponentially.

                                    If someone said they don't have enough credit, as far as credit is concerned your credit rating is far less important than you would believe because of the fact that one of the things that we show people and teach people, and 91% of our clients are able to accomplish, is we get the seller to finance the deal.

                                    Now the seller doesn't care about your credit rating. I mean they do to a certain extent but nowhere near - not like a mortgage. What a seller cares about, more important than anything else is that you have the ability to operate that business successfully so that their note is going to get paid.

                                    So it's critically important when you're dealing in these transactions that you are impressing the seller, that you've done your homework, that you are educated, that you are well informed, that you conduct your research affectively, because you want to impress the seller because the seller is the one who is going to bankroll the business for you. And so to them they're not going to worry as much as your credit rating. They're worried can you run this business successfully? Are you going to be able to pay the note? In the event that you cannot pay the note they are going to have a claim against the business. So in a worst case scenario they're going to take it over which happens in a small number of cases. But the goal is again, to leverage your relationship with the seller that you build over time for them to finance the deal. So credit weighs far less into the equation. That's the beauty of all this.

Lance Hood:               So what if someone tells you that, "I just don't have any clue where to start."

Richard Parker:           The knee-jerk answer to that and I don't mean to sound snotty or whatever, but the knee-jerk reaction is to start at the beginning. And the beginning means you have to take a step back from what it is that you've done, or anything that you've learnt and decided that, "Hey. This is going to be my business. This is my future, my money, et cetera, and it's a major decision. And before I make any decision the most important thing that I need to do is I need to become educated. I need to access the information advisors et cetera that are going to provide me the type of information that I need."

And that's probably why our business is so successful because of the programs that we provide to people that teach them how to buy businesses and take them though the entire process step-by-step and hold their hand, and provide them with ongoing coaching and consulting. But clearly at the beginning you need to get educated. You need to find out, "How does this process work and what's involved?" I would not jump into this and start searching business for sale listing because people will be all over the place and then you just get into this - it's like the hamster that keeps running in the wheel and thinks he's making significant progress and hasn't moved. Okay? And so, when you see starting at the beginning it's educating yourself.  

                                    The second thing is to really take a very good self inventory because this is not like getting a job or where someone who needs to get a job goes to the interview and may sort of massage the facts or his or her skill level a little bit. Or beef up their strengths and downplay their weaknesses because the goal is for them to get the job and they know that they're going to be trained for the particular position on the employer's nickel.

                                    When you go into your own business the last thing you want to do is have to be trained to operate the business because now it's your dime that's at risk. And so you want to take a very good self inventory of what it is that you're good at. What are your strengths? More importantly, what are your weaknesses? What is it that you like to do? What is it that you don't like to do? What type of business would thrive from your strengths and not suffer from your weaknesses? What are my restrictions, for example? Are there times that I can't work? Do I want to make sure that my weekends are free? Do I want to have a business where I have the ability to travel?

                                    When I bought my first business the thing that was critically important was to me was I had gotten away in my prior job from the fact that I loved to fly fish. I'm not real good at it. I've been doing it horribly for about 20 years, but I love it nonetheless. And no one enjoys it more than I do. But one of the things that was very important to me was - I was working like a maniac before for someone else and my time - I just lost all this time that I really enjoyed fishing. And I'd take one trip during the year and that was the end of it. And is said, "When I go into my own business the one thing that I'm going to do is I'm going to set aside specific time every week that I'm able to fish."

                                    Now I was living up in Canada at that point so there's only a number of months during the year that you're able to do it, but I had designated Wednesdays during the summer that I was going to go fishing. And I set that up and blocked off that time as though that was my most important customer meeting at any point during the week. And I lived to that for years and years and years until I relocated to the United States.

                                    So what I would do is I setup that time so that I'd go in early in the morning, got some things cleared up, that was it. And I was gone for the day and I went fishing. And so you just set these parameters for yourself of things that you want to accomplish in a business. And when I talk about restrictions, or things that you want to, that's the beauty of owning your own business because I had to buy a business that I would able - even this is pre-Internet days, to be completely away from my business for that entire day regardless of what happens. I wanted to be sure nobody could find me.