This $15 TRILLION Industry is Run By Idiots. You Can Do It Better.

Private equity is not high-rise New York City apartments or fancy dinners. It's a mindset shift that could let you buy a business for practically nothing and make it 10 times more value. I run an air filter manufacturer that made $22 million last month alone. For the past few years, I've been running my own private equity business on the side. I've spent about $10 million buying businesses and running. This is everything I've learned about spotting opportunity, spelling BS, and making millions from running my personal private equity firm. If you only heard the news, you'd think private equity was this huge evil business, but it can be more noble than that. I once saw a private equity firm buy a business at three times EBITDA and sell it for eight times in just a few years. No crazy reinvention, no magic trick. All they did was clean up the financials, tighten the operation, improve margin, and repackage the business professionally. It's not about flipping, it's about finding inefficiencies. In many cases, the business has real value, but it's hidden behind operational noise. Private equity works when you remove the noise and bring clarity. And one of the craziest things is you don't necessarily have to make more money to make the business worth more. Let's say a business is earning $500,000 per year in EBITDA. It's disorganized. The owner runs everything. No systems, no growth story. Maybe it sells for three times earnings or a million and a half dollars. But now imagine you buy that same business and go to work. You professionalize operations, hire a manager, clean up the financials. And most importantly, you get the business starting to grow a little bit. You're not just making money from the day-to-day cash flow. You're creating enterprise value by transforming the business into something that larger buyers actually want to own. And that's the key. The more scalable, clean, and growing your business becomes, the more valuable each dollar of earnings becomes. When people say private equity, they think of massive companies that you and I could never start. But there's so much more to it than that. Originally, private equity had good intentions. It offered families and founders a real path to sell when public markets weren't an option. Here's the core problem I see today. Most private equity firms use tremendous leverage. They'll buy a good business, load it with debt, pay themselves fees, and then leave it hollowed out. If the business fails, the investors are fine. The bankers are fine. The employees, out of luck. If you're building a business or thinking about buying one, this philosophy applies to you. Think long-term. I believe the best businesses sit at the intersection of a skill and a specific craft, like plumbing HVAC e-commerce, and a deep understanding of technology and systems. That's how I build FilterBuy. I combine my knowledge of manufacturing with e-commerce, brand, technology, and systems thinking, and I'm constantly learning. That's the cheat code. Deep domain knowledge plus relentless system building results in a lasting compounding advantage. And if you're watching this channel, you can do it too. If you're thinking, I don't have the money to be buying businesses, you're falling into another trap. It was actually cheaper for my friend Todd to buy a business than to start one from scratch. Todd was in finance. He had saved up some money and was looking for an exit round, something that could generate cash flow and give him room to grow. He saw an opportunity within home health, which is an industry with steady demand and massive fragmentation. But at the same time, he didn't want to start grinding from zero. So he cold called and emailed every single home health business within 200 miles, asking if they were potentially interested in selling. After nine months and hundreds of conversations, he found the one. The business was doing about $2 million in revenue and $300,000 a year in profit with the team in place. Todd bought it for $1.2 million, but only paid $50,000 out of pocket. The rest came from SBA financing and a seller earn out over three years. Fast forward six years, he 7Xed his business, bought out two competitors and built something real. So how do you know if buying a business is better than starting one? Look for proven demand, businesses with repeat customers and real cash flow, operational teams already in place, and remember my favorite line, you set the price, I set the terms. Todd didn't reinvent anything. He just knew how to spot a good business and structure a smart deal. And that $50,000 he invested, it turned into a multi-million dollar operation without wasting years in startup chaos. A business doesn't succeed because of the product, it succeeds because of this next step. I once bought a small content business. The product was strong, the brand had a following, and they had a team in place, but they were stuck. No clear KPIs, no accountability, and most importantly, no leadership with a winning vision. This is where I saw the opportunity. I knew the space well, and I knew what leverage to pull. We didn't reinvent the wheel, we didn't even change the product, we just brought in structure. We built systems around content production and distribution. We gave each team member clarity on their role and how it tied to the outcome. Within 60 days, the business was growing again, same people, same product, completely different trajectory. That's the power of operations. The best leadership isn't about charisma or big ideas, it's about clarity and consistency. If you can't operate, you can't scale. Here's what actually matters. Systems thinking. Can you break down complex processes into simple, repeatable actions? Clarity and leadership. Can you communicate a vision that people can rally behind? Obsessive focus on KPIs. Not a hundred things, just the right few. You don't need to invent the next big thing, you can take something good and turn it into something great. And that's the real power behind it. Operator-led private equity. If you're afraid of getting screwed over, learn to protect yourself like a fund. I once nearly bought a company that was reporting fake revenue. They were double counting billings and it was showing up in the P&L as legitimate revenue. Fortunately, I hired a CPA to do a quality of earnings report and they spotted it during due diligence. That report easily saved me millions of dollars. So why do people miss this stuff? Because they want the deal to work. We all do. Here are a few questions I always ask when evaluating a deal. What's driving growth? How dependent is this business on the owner? What happens if one or two key employees leave? Do they have non-competes? What systems are in place? And the biggest one, would I feel confident running this business tomorrow if the owner walked away? If the answer is no, walk. This is why I don't recommend buying a business unless you have serious business experience, deep knowledge of the industry, and a commitment to thorough due diligence. Now you have the same tools people in private equity use to make millions. My first deals in buying businesses barely cost me anything out of pocket because I understood this. The best deals almost always use a combination of all three of these tools. First, seller finance. Ask the owner to carry a portion of the purchase price over 3-5 years. This helps bridge valuation gaps and keeps them invested in your success. Second, bank loans. You can generally finance 70-90% of the deal with a traditional bank loan or an SBA-backed loan. SBA loans are especially helpful for first-time buyers due to favorable terms and down payment requirements. The third, earnings. Structure a portion of the purchase price to be paid only if the business hits certain performance milestones post-close. This de-risks variability and gives you time to validate growth before paying full price. Leverage is a scalpel, not a sledgehammer. Use it with precision, not aggression. Debt lets you buy million-dollar businesses for a fraction of the cost and use cash flow to fund your future. It's not magic, it's just smart structuring. The truth is, most people who work at fancy private equity firms don't know the first thing about how to run some of the most important businesses in the world. Take the utility companies in Montana. Private equity firms bought them, loaded them with debt, and then lobbied regulators to raise rates just so they could pay off their leverage. The customers then get screwed. But on paper, it's good business. Except it's not. It's financial engineering, not value creation. Private equity lacks something critical. And that's real-world understanding. They don't know what customers want, or how employees think, or what actually happens on a Tuesday afternoon when a truck breaks down, or a tech quits mid-job. That's how you beat Wall Street at their own game. You start by learning a skill. You work with your hands. You learn what makes a business run. Then build one. And eventually, start buying them. With AI and technology, the tools private equity uses, like the dashboards, the reporting, the forecasting, those are more accessible than ever. But the knowledge of how to actually run these businesses? That's still earned the hard way. If you're willing to learn the business from inside out, you can outperform private equity every day of the week. We don't just need more entrepreneurs, we need a new generation of owner-operators. That's the private equity revolution we need, and it's already starting. This video is part of a 5-episode series on buying businesses for complete beginners. Subscribe to watch every episode, and watch my video on how to buy a good business, here.