This Issue: Is Buying Your Own Company Risky?

Many people believe that buying your own business is too risky. But personally, I think that putting your fate in someone else's hands carries far greater risk.

Of course, there are risks in buying a business. But many of them, if not all, can be eliminated by doing your homework beforehand. If you follow these steps recommended by Richard Parker, professor of Trump University's new course The Art of Buying a Business, you'll be well on your way:

• Educate Yourself. Accept the fact that nothing you've done before has prepared you for the business-buying process. Even if you've handled corporate acquisitions in the past, you are playing with your own money now. That demands a whole different mindset. Learn how to write a business plan and stick with it.
• Learn about the kind of business that you will buy. If you're a first timer, it only makes sense todevour tons of information about how to buy a business, but don't overlooklearning about running one too. So be sure to study the specific challenges of running the kind of enterprise you are considering, whether it is a real estate office, a consulting company, a bicycle shop - or anything else. Talk to people who already own the kinds of businesses that you are considering.
• Take an honest look at your personal strengths, interests and weaknesses. Your goal is to buy the business that is right for you, the one that you are best equipped to run. Don't try to be something you're not. It's fine to learn lots of new skills when you're working for other people, because you're on their dime. But when you're working for yourself, you can hardly afford it.
• Put together a "laundry list" of specifics. Don't only say: "I want it to make a lot of money." Also identify specific characteristics that your new business must have. Should profits be sales/marketing-driven, for example? Should it allow you to work from your home, or to travel? Would you like to supervise a staff of employees, or work largely on your own? Use your "laundry list" as a litmus test that you put every business through. If a business does not conform - don't buy it!
• Get the word out. You may not want to tell your boss that you are buying a business, of course. But let everyone else in your circle know your plans. This serves two purposes: it will generate leads, and it will put a little pressure on you to make it happen.
• Set a timeline for the purchase - and stick to it. Don't allow yourself to be in the same position next year. Six months from today, you should be in your own business. Take a blank sheet of paper and write on it with a big black marker: "I'm buying a business this year!" Post it in a place where you will see it every morning, and if possible, throughout each day.

Above all, get into the game. Don't be overly analytical in the early stages, just search listings of businesses for sale to see what's out there. When a business sparks your interest, arrange a meeting with the seller and ask a lot of questions. Just start amassing knowledge and one day soon, you'll be ready to enjoy your success!

Michael Sexton is President of Trump University. The concepts presented here are covered in depth in Trump University's newest success course, The Art of Buying a Business, presented by Trump University Professor Richard Parker.

As you may know, my former Apprentice Carolyn Kepcher is no longer with the Trump Organization and everyone wants to know why. I had to fire her but it wasn't like one of my dramatic boardroom scenes.

The fact is, I like Carolyn very much but she loved her fame and she loved her celebrity on The Apprentice and it was affecting her work. She wasn't doing her job like she used to or was capable of doing. So I felt that after 11 years together it was time for a rest.

I told Carolyn in the nicest way possible, Go out and enjoy your family. Get a new job.

And I think she agreed that it was a good decision. We had a good run, but now it's over.

As far as The Apprentice is concerned, Ivanka replaces Carolyn next season. Ivanka did a fantastic job last year and she continues to amaze me with her talents. The show continues to be a monster hit and, as usual, I'm having a lot of fun.

Donald J. Trump is Chairman of Trump University. He shares his insights on success in many Trump University courses, including the self-instructional course, How to Build a Fortune.

Every day seems to bring more doom-and-gloom news about the current real estate market. Just two days ago, I read an article on Reuters in which Robert Toll of Toll Brothers builders said that today's soft housing market reminds him of the awful sag of the 1980's. That slump was so dire, it took housing prices more than three years to recover.

It sounds dismal, but as I explore in my book Trump University Real Estate 101, which I wrote with Donald J. Trump, there are many ways to make money in any kind of market, hard or soft. Of them all, perhaps the simplest is to buy properties for below market value.

How can you do that? Many authors of get-rich-quick books encourage you to find sellers who are so distressed financially, they will practically give their properties away.

That strategy works. But the fact is, panicky sellers are a lot harder to find than you might expect. I would estimate that only about one percent of all property sellers meet the criteria.

There are other sellers who are eager to sell their properties for less than market value too, and they are far easier to find:

• Opportunistic sellers don't value their property as much as they value something else. Maybe they want to sell their properties so they can move into a retirement condo or launch a business. To get them to lower their price to below market norms, offer a quick and sure closing.
• Don't-wanters are selling to get away from a particular burden. Maybe they no longer want the property because they have moved into a newer home or have been transferred to another part of the country. To buy at a reduced price, stress how happy and free they will feel when you remove their burden.
• Unknowledgeable sellers, who are often out-of-towners, don't know the current market price of their property. Sometimes they are so inattentive, they let their realtors intentionally set low prices to make quick commissions. You can check to see if properties are owned by out-of-towners by scanning the billing addresses in your local tax assessor's office. Also look for "for sale" signs with the names of real estate firms that rarely appear in a neighborhood. That might tell you that an out-of-town seller picked a realtor randomly from the Internet or yellow pages.
• Windfall gainers prefer the fast buck to the last buck. They are often people who have inherited a property from parents or other loved ones. For emotional reasons, they are eager to sell. You can close a deal by offering a quick close and a no-hassle discount offer.

How can you find these eager sellers? Cultivate a network of realtors and other professionals who will alert you. If you are meeting directly with sellers and you don't know if they fall into these categories, use a subtle approach to uncover the reasons why they are selling. Compliment the property, don't criticize it. Ask cordially about their situation. Don't interrogate, since the way you phrase your questions is more important than the questions themselves. Probe gently, like Peter Falk used to do as Colombo.

Buying properties at below-market prices lets you control your market. It allows you to establish your own appreciation for the properties that you buy. You might not be able to laugh at the housing bubble if it really does burst, but you will profit and survive.

Gary Eldred, PhD is a professor of real estate at Trump University, where his courses include the The Real Estate Investor Training Program.