 America's trusted voice on money and business, Dave Ramsey is a personal money management expert and extremely popular national radio personality. His three New York Times best-selling books - Financial Peace, More Than Enough and The Total Money Makeover - have sold more than 6 million copies combined. His latest book is EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches.
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Don’ t Add Unnecessary Risk to the EquationDave, How do you go about financing a business you may want to buy? Nathan Nathan, I don’ t do debt. Period. With this in mind, I can’ t recommend that you take on a bunch of debt to buy or start a company. When you borrow money to do business, you’ re automatically adding a huge level of risk to the equation. Trust me, small business owners have enough to worry about without adding the extra burden of debt to the list. When it comes to this kind of situation, the only "financed" deal I might consider would be an owner-financed situation. One where your pay to them is based on the profitability of the business. That way, if there’ s no profitability, you’ re not bankrupt. If you run out and get a loan for $500,000, or whatever it takes to buy the business, and then you can’ t make the payments because the business doesn’ t do well, you’ re in a lot of trouble. When you do business deals that are all-or-nothing-meaning you’ re bankrupt if your plan doesn't work-you're just being irresponsible. And there's no point in taking such huge risks to live your entrepreneurial dreams. Dave Read other business articles |