ProjectionHub

ProjectionHub helps entrepreneurs create financial projections for lenders, investors or internal planning.  Since 2012 ProjectionHub has helped over 40,000 entrepreneurs through our web app, consulting services and financial projection templates.

Co-Founder

Flagship Enterprise Capital

I serve as the CEO of Flagship Enterprise Capital which is a CDFI focused on making small business loans to underserved business owners in Indiana.

Chief Executive Officer

Bankable, Powered by Flagship

Strategic Business Advisor

Bankable is a loan program for small businesses and startups in Indiana that aren't quite ready for a business loan from a traditional bank.  They aren't quite "bankable".  

We are a Small Business Administration (SBA) lender that makes loans from $500 to $250,000 to Indiana small businesses.

I have managed the loan program since loan #1 in 2010.  Since 2010, Bankable has closed over 1,200 loans totaling over $38,000,000, provided thousands of hours of business coaching and technical assistance, and helped create and retain thousands of jobs.

Executive Director

Bankable (Flagship Enterprise Center)

Flagship Enterprise Center is a technology based small business incubator.

Loan Program Manager

ExecutivePlan

My first effort in starting my own business.  I created a blog and website that led to opportunities for me to provide consulting services to startups that needed help writing a business plan executive summary that would really grab the attention of potential investors.   Ran this company as a nice side hustle until a major Google search algorithm update dramatically decreased our website visitors.  I learned a lot about relying solely on Google search for our lead generation.

Founder

Crandall Offices

Part-time staff accountant at Crandall Offices while full-time student at Taylor University

Staff Accountant

Capin Crouse LLP

Audit Staff Intern

I help founders create financial projections for potential lenders and investors.

I am the Co-Founder and CEO of ProjectionHub - www.projectionhub.com - where we have helped over 4,400 entrepreneurs create financial projections for potential lenders and investors.

From 2010 through 2022 I was the Executive Director at Bankable which is an SBA lender.  During my time at Bankable we closed over 1,500 SBA loans for small businesses in Indiana.

I think I have a good idea that looks like a bad idea.  So tell me how bad this idea is 👇 



Peter Thiel, Co-founder of PayPal and early investor in Facebook is credited with saying that the best startups are good ideas that look like bad ideas.  

I heard that quote the other day and it really stuck with me.  I decided to revisit some old ideas that I have had that I had previously decided were bad ideas and take another look at them.  

Most of them were bad ideas!  

But I think I might have uncovered one idea that is actually a good idea that might look like a bad idea.  

Many of you know that I have been looking to buy a business, and my first attempts have been to try to find complementary businesses to ProjectionHub.  Since we sell financial projection spreadsheet templates, I have started my search by trying to reach out to other spreadsheet template businesses.  

Specifically, I have reached out to a few bookkeeping template businesses, but I have been met with silence, “not interested”, “not yet”, or “I want $5 million for the business” haha! 

So as an entrepreneur at heart, I can’t help myself.  

I am going to start creating a library of bookkeeping templates for small businesses. 

You might think this sounds like a bad idea… 

Because - Quickbooks - right? 

I spent 12 years as an SBA microlender and as a user of Quickbooks myself and I can tell you that the average small business owner does not use Quickbooks correctly.  

Is it possible?  Yes. 

Does it happen in reality? No.

For that reason I think there is an opportunity to create customized spreadsheet templates built specifically, industry by industry, for very small businesses.  

Here are some examples of templates we are going to start with:

- Real Estate Agent
- Insurance Agent
- Graphic Designer
- Freelancer
- Consultant
- Airbnb Owner
- Rental Property Owner
- Uber Driver
- DoorDash Driver

This short list represents millions and millions of business owners.  In most cases their business is quite simple, but they still need to keep track of revenue and expenses for tax time. 

I *think* the good idea that sounds like a bad idea is to provide a really amazing and simple spreadsheet template that is customized for each of these types of businesses.  

No one else is doing it.

Everyone with a bookkeeping template business has one general template that “works” for every business.  

I know from experience that customization and niching down wins, so I think these generic bookkeeping templates are missing most of the market.  

So I guess if no one will sell me a bookkeeping template business, I am going to have to give it a try to build one.     

#bookkeeping #smallbusiness #templates

Adam Hoeksema

I think one of the most important skills in searching for a business to buy is to know how to kill a deal quickly.  Letting a bad deal linger can cost you tens of thousands of dollars.  Here are some ways to kill a deal quickly 👇 

✅ Financials don’t make sense based on industry standards - I like to take seller financials and display their expenses as a percentage of revenue and then compare that to industry standards.  If the expenses are just completely different than industry standards, that might be enough of a red flag to quickly kill the deal and move on. 

✅ Deal won’t cash flow (aka not eligible for SBA financing) - SBA lenders are going to want the business to have a debt service coverage ratio of 1.25 or more.  This means that you should have $1.25 of profit or earnings for every $1 of “debt service” which is your loan payments.  If you need a $1 million loan to buy the business and based on a 10 year term and the company’s historical earnings your debt service coverage is less than 1.25 you probably shouldn’t waste your time on the deal.  Or you need to negotiate on price or seller financing up front since the deal won’t cash flow as proposed. 

✅ Financial statements look inaccurate - Do you notice any negatives where there should be positives?  I worked with a client the other day where the seller had a negative interest expense that should have been a positive interest expense.  This caused a $200,000+ swing in the bottom line.  That might have been the only mistake in the financial statements, but unfortunately a big mistake like that throws into question everything else.  When I was an SBA lender we often saw balance sheets with negative Accounts Payable or Accounts Receivable which is probably just a function of not knowing how to use or update Quickbooks properly, but it really made us nervous about the reliability of all the financial information we were seeing.  Could anything be trusted? 

If you can kill a deal quickly you can avoid spending time and money on due diligence costs like Quality of Earnings reports or legal costs, etc. 

On the one hand, when you are trying to get a deal done you are looking for a way to make the deal work, but on the other hand I think you need to try to kill the deal quickly if it just isn’t going to work.  

The Search Investment Group 2023 Self-Funded Search Study looked at the cost of dead deals.  While 75% of searchers spent $25,000 or less on dead deal expenses, 10% of searchers spent over $50,000 on deal expenses like legal and quality of earnings report expenses just to have the deal ultimately die.  

Any other ideas on ways to kill a deal quickly before wasting too much time or money? 

#SMB #acquisition #smallbusiness #searcher

Sometimes I hear “gurus” on Youtube talking about buying a business with no money down, no SBA loan or personal guarantee, all you need to do is convince the seller to do 100% seller financing.  Here is the reality 👉 

It is HIGHLY unlikely that an owner of a good, profitable business would ever sell you their business with no money down and then just allow you to take the business they have built and pay them for the purchase of the business over time from the profits earned by the business.  

I can think of only a few situations where this might actually be possible:

✅ It is your family business - Maybe your parents own a business, and they want to set you up for success so they sell you the entire business on a seller note that you repay over time.  

✅ The business is failing - Sure if the business is losing money and the options are to just shut the business down, or to hand the business to you on a seller note in hopes that you can turn it around and pay something for the business over time, I could see this 100% seller financing making some sense.

✅ You have a secret weapon - Let’s say you are already super wealthy and you have the money to pay for the business on hand already, or maybe you have a huge following on social media and your audience can drive significant growth for the business, or some other secret weapon that instills a ton of confidence in the seller that you will be able to repay that seller note over time.  If Mr. Beast wanted to buy your business and promote your product to his hundreds of millions of fans, sure you would probably be willing to give him great financing terms.  

But if your deal doesn’t fall into one of these three categories, you really need to get the idea of 100% seller financing out of your head. 

The Search Investment Group 2023 Self-Funded Search Study found that for 61% of the acquisitions that they surveyed which included seller note financing, the seller note was between 10 and 20% of the purchase price.   

Only 10% had a seller note for 30% or more of the purchase price.  

I think the gurus are spreading some false hope to people.  If you want to buy a business you should be prepared to put some money into the deal from your savings, you should also be prepared to personally guarantee any SBA or bank loan that you might use.  

Owning a business can be very rewarding, but rewards don’t come without some risk. 

Have you ever heard of a situation where a seller provided 100% seller financing?  If so, what was the situation that led to that great deal for the buyer?   

#smb #acquisition #smallbusiness

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