David C BarnettI help you buy, sell, plan, value a business

I’m happy to help callers from all around the world. David C Barnett, BBA, CMEA, BFC Business Valuation Specialist Business Transaction Specialist Business Finance Consultant Certified Machinery & Equipment Appraiser Hundreds of YouTube videos on my subject matter here: http://www.youtube.com/c/DavidBarnettMoncton My iTunes podcast is here: https://itunes.apple.com/ca/podcast/david-c-barnett-small-business-deal-making/id1234025671?mt=2 www.DavidCBarnett.com www.BusinessBuyerAdvantage.com www.HowToSellMyOwnBusiness.com www.BusinessAndAssetValues.com Started 5 different companies since 'adulthood.' Sold 2, Closed 2, One still going... Started a finance consulting practice in 2006 Began brokering the sale of companies in 2008 Bought a Sunbelt business brokers office in 2009, sold in 2011 Brokered the sale of over 35 businesses in 36 months, arranged financing for hundreds of start-ups, acquisitions or expansions. Helped hundreds of clients through the purchase or sale of a business, more importantly, helped countless people to NOT make a really big mistake. Has owned up to 5 income properties at a time. Author of three best-selling business books; 'Invest Local: a guide to superior investment returns in your own community,' 'Franchise Warnings: What you really need to know before you buy' and 'How To Sell My Own Business: A guide to selling your own business without paying a broker's commission.' all available as well as 5 other books on Amazon or from www.DavidCBarnett.com

Recent Answers

Funny.. I made a video about this not long ago:

The answer is.. It depends on what you negotiate.
The prepaid memberships should be on the balance sheet as 'deferred revenue.'
It's a debt to customers for undelivered service but it rarely appears because most gyms just record each transaction as a sale.



For hundreds of articles and videos on buying, selling, financing and managing small and medium sized businesses, visit my blog at www.DavidCBarnett.com.
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I was once in such an environment.

The company had an interesting way of dealing with the slowdown... they sold vacation time.

Here's how it worked (and it may only help you in 2019)

If you know you don't need a full complement of staff in the last weeks of the year, offer your employees the chance to take an extra week of vacation in that time which will be unpaid.

However, if they do want a paycheck, they can 'buy a week of vacation' by deducting 1/51st of a week's pay from each week's pay over the course of the year.

So a person who earns $1000/wk would have $19.61 taken off each week's pay in order to get a paycheck on the week which is essentially an unpaid absence. The money just goes back and forth.

The effect though is that your labor cost is cut in the slow period of the year.

People get excited about their extra vacation week. Happiness and fun fill the air in the lead-up to 'vacation time.'

Hope that helps.


The easy way would be to purchase points from an established rewards program and give them to your clients.

For example, in Canada we have the Air Miles program. Businesses can purchase points and give to customers. Users can redeem the points for rental cars, hotels, air tickets, etc.

Look for an established program in your country that offers rewards your clients would enjoy and contact them to see if you can buy points in bulk and redistribute them via an online portal.


David Barnett

It depends on what you need from them.
I usually like to define investments in such a way that there isn't someone trying to dictate how the business is run.
That's what happens when you get a partner. They own part of the business and you have to listen to them.
It takes real maturity and organization to make a true partnership work.
If you just need an employee and maybe some of their money as an investment, then you should structure things differently.
I suggest my book, Invest Local, which is full of non-equity ways to structure investments in local small businesses.

Hi, great question.

You determine the value of the business before the partner joins, then you determine the value of what they bring.

You then issue new shares to them.

I made this video which may clear things up a bit for you.

And this one about share dilution:

If you want to discuss your specific circumstances, please feel free to request a call.


You show him the opportunity.
You show him how much you need and how you will spend it.
You show him how he will be able to see what's going on and watch his investment.
You then let him make you an offer.

If you'd like to discuss this particular case, please request a call.



For hundreds of videos on buying, selling, financing and managing small and medium sized businesses, visit my blog at www.DavidCBarnett.com

The problem with small businesses is that profit is totally under the control of the operator. Lots of personal expenses can get buried in the company to lower taxes.

This is why you don't want to be a minority shareholder.

This deal should be structured as debt.

I do these deals often and wrote a book about it in 2014 called Invest Local. You can get it from Amazon and it's on Kindle and audio formats.

Hope this helps.

If you'd like to discuss the specifics of your case, just arrange a call.



The answer depends a lot on where you're located and what business entities are available to you.

You could end up with several.

For example, you may wish to have a corporation which owns shares in the startups such that you are protected from liability.

You may then wish to have a limited partnership where investors can put in money and this LP can make loans or share investments into the startups as well and the investors could enjoy pass-through tax treatment. They would then make their own decision about what kind of entity to hold the LP investment.

Your corporation could be the general partner in the LP structure.

You really need to spend some time thinking about what scenarios are likely then go talk to both a CPA and an attorney who are located in your jurisdiction.

Hope that helps.

If you'd like to brainstorm, arrange a call.


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