Voiding the biggest myth about buying or starting a business with your own cash

Have you ever said to yourself one time or another " I would give anything if I could have my own business, but I don't have the money." Well, you're in for a huge and shocking surprise. You don’t actually need any of your own money- not a penny of it, and the money you do require is readily available from others, often from the most unexpected of sources.

So you can have the American dream—being your own boss and not having to answer to anyone, taking home all the profit—all without putting out one cent of your own money. I will explain some simple financial techniques most people assume are for individuals such as Donald Trump, Bill Gates, and other famous entrepreneurs. Anyone can use these techniques with simplicity and ease. The Myth has disappeared. Reality is kicking in.

Question: Is the myth of needing money to open a business still applicable?

Answer: As you mentioned, it’s only a myth. I know people who have been looking for ways to work around this well-known myth. In this book, I have gathered information, techniques from seminars, and strategies gleaned from many different books on how to start or buy a business by using leverage.

Question: Where can I find the money to start a company?

Answer: You can often use the assets of the business you are buying to pay for the purchase. I'll describe in detail at least five or six ways you can count on the seller for the money you need to open the business. In fact, it could be even more advantageous to use the seller’s money for the purpose of buying the business.

Question: Is buying or starting a business really that simple?

Answer: It is simpler that you might think. Sellers are looking desperately nowadays for buyers to acquire their business. Sellers are getting desperate to exchange ownership and will rely on any buyers’ requests. This advantage will enable the buyer to close any deals on their terms. These procedures are simple to apply with the understanding that all transactions are clear and accepted between both parties (buyer and seller) in question. Think about it: The parties in a business acquisition transaction rarely, if ever, reveal the intimate details of their deal, so you aren’t likely to know much about the "no cash" acquisitions that happen every day.

Question: Give me some examples of entrepreneurs who "made it" without any of their own money?

Answer: Here are a few stories of entrepreneurs who have always inspired me and I think they'll do the same for you. (You may even recognize a few...)

Example: Paul Orfalea, a student with below average grades just out of college, started the now-famous Kinko's copy stores without a penny of his own money. It began in 1971 when he convinced a commercial bank there was a big demand among college students for a convenient, multi-purpose photocopy shop. The bank loaned him $5,000 to take over an 80-square-foot hamburger stand for the purpose, and Orfalea went on to build his tiny operation into a $400 million chain of nearly 800 stores throughout America.

Example: Ray Kroc was a 52-year-old milkshake salesman back in 1955 when he convinced brothers Mac and Dick McDonald to sell him their lonely little hamburger stand near Burbank, California. Since Kroc didn't have any money, he worked out a unique and highly leveraged no-cash-down arrangement. On his first day in business, Kroc's cash register rang up close to $400.00. "It rained that day," he later explained. The following week, the sales doubled. Today, McDonalds reaches the 20 billion dollars/year sales mark. Ray Kroc didn't have to spend a penny of his own to start it all.

Question: You're right, these are tremendously inspiring stories. But do entrepreneurs today have the same kind of promising opportunities?

Answer: Absolutely. In fact, according to an issue of Inc. Magazine, “the financial system that was accessible to [earlier entrepreneurs]... remains equally accessible today.” We are in an era in which technology is improving at the speed of light. We hear everyday about new entrepreneurs selling their businesses (internet and software companies) to corporate giants for several millions of dollars. In trying to understand how this kind of acquisition is being done, there are a few questions that come to mind. Under whose terms is the business being sold? Are the buyers actually submitting a check for the amount of the announced purchase price?

I don't want to pretend it's easy and automatic to achieve these same levels of success. It takes a lot of determination to attain these goals. What I can assure you, with great certainty, is that money should be the least of your concerns. With some savvy advice and a love of independence, you WILL succeed, perhaps far beyond your expectations.

About the author:
Dan Amzallag has an MBA from the University of Texas and 8 years of experience as an entrepreneur and financial executive. "The American Dream: How do you buy or start a business with none of your own cash", began as a thesis for his degree and evolved based on his own experience and insights gleaned from other entrepreneurs, consultants and financial experts.