This is a valuable thread and @XavierHelgesen has excellent intentions. If you were planning to buy a SMB using the SBA, the deal got sweeter.

That said, there are caution flags I'd like to raise:

1) It's brutally hard. I outline the steps here https://t.co/MZ0beEl0UU

2) Selecting well, and far beyond financials factors, is a skill that takes reps to become proficient. What I thought were slam dunks 10 years ago scare me today.

Please don’t get jacked up on cheap SBA money and go tag the 14th thing you look at.
3) The required personal guarantee is no joke. Yes, it’s 10 year money. Yes, you’re going to buy it at a high cf yield. But, SMBs are volatile and often for reasons that aren’t initially obvious.

If things turn against you, you’ll declare bankruptcy. Seen it happen. Not pretty.
4) You’re almost always buying a risky job.

The idea of cashing checks and “allocating capital” is a joke. Someone somewhere has done it, but I’ve never seen it.

It’s going to be a challenging 7/365 grind to hopefully make very good money. That’s the best you can hope for.
5) Speaking of risk, as the owner, you’re the last to eat. Stuff happens and reserves need to be built to survive long-term. Working capital grows. Equipment breaks.

You’ll often have top employees getting more cash out of the business than the owner.
I use the Rule of 3. You should be able to consistently make 3X the amount you could W2 for the risk to be worth it. Consistently being the key word. Not once. But almost every year.
6) Skill set matters. If you’re an Excel wiz, great. That's only marginally useful post-close and you’re likely lacking the in-the-trenches experience that will make/break it.

There's a chasm between the world of finance and operations. If this is surprising, be worried.
If you’re a skilled operator, make sure you know your way around the financial statements, understand the competitive advantage(s), and especially pay attention to cash flow.

Cash is like oxygen. You only pay attention to it when it's in short supply and that's often too late.
7) Operating stress, especially with your net worth on the line, is intense and often ever-present.

You will get sued. Someone will steal from you. You’re going to violate some government law you didn’t know about.

On top of the normal customer, supplier, employee stress.
Now that I’m done clubbing baby seals, if none of this gives you pause, go for it. There’s gold in them there hills, but just know the hard work, emotional toll, and risk you’re taking on.

And, it can be outrageously rewarding.

Cheers to a prosperous 2021 and happy hunting.

More from Tech

Recently, the @CNIL issued a decision regarding the GDPR compliance of an unknown French adtech company named "Vectaury". It may seem like small fry, but the decision has potential wide-ranging impacts for Google, the IAB framework, and today's adtech. It's thread time! 👇

It's all in French, but if you're up for it you can read:
• Their blog post (lacks the most interesting details):
https://t.co/PHkDcOT1hy
• Their high-level legal decision: https://t.co/hwpiEvjodt
• The full notification: https://t.co/QQB7rfynha

I've read it so you needn't!

Vectaury was collecting geolocation data in order to create profiles (eg. people who often go to this or that type of shop) so as to power ad targeting. They operate through embedded SDKs and ad bidding, making them invisible to users.

The @CNIL notes that profiling based off of geolocation presents particular risks since it reveals people's movements and habits. As risky, the processing requires consent — this will be the heart of their assessment.

Interesting point: they justify the decision in part because of how many people COULD be targeted in this way (rather than how many have — though they note that too). Because it's on a phone, and many have phones, it is considered large-scale processing no matter what.
After getting good feedback on yesterday's thread on #routemobile I think it is logical to do a bit in-depth technical study. Place #twilio at center, keep #routemobile & #tanla at the periphery & see who is each placed.


This thread is inspired by one of the articles I read on the-ken about #postman API & how they are transforming & expediting software product delivery & consumption, leading to enhanced developer productivity.

We all know that #Twilio offers host of APIs that can be readily used for faster integration by anyone who wants to have communication capabilities. Before we move ahead, let's get a few things cleared out.

Can anyone build the programming capability to process payments or communication capabilities? Yes, but will they, the answer is NO. Companies prefer to consume APIs offered by likes of #Stripe #twilio #Shopify #razorpay etc.

This offers two benefits - faster time to market, of course that means no need to re-invent the wheel + not worrying of compliance around payment process or communication regulations. This makes entire ecosystem extremely agile

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