3 business acquisitions in eighteen months

06/29/23 • 29 min

Business Buying Strategies from The Dealmaker's Academy

This week Jonathan talks with Ray Burke, who started a business in the transport and haulage sector which he grew to a £500,000 turnover operation after six years. However, after three acquisitions in eighteen months, he has increased his group business turnover to £3.4 million.

Key Highlights

[01:26] Ray Burke's business background

[04:21] How Ray looked for and shortlisted potential business to buy

[05:05] Ray's first acquisition

[12:01] What has changed for Ray since the first acquisition?

[13:10] The second acquisition

[18:20] The third acquisition

[20:58] The mindset of running a group rather than a single business

[27:05] What advice would Ray give to new business buyers?

Notable Quotes

So I structured a deal that I could use invoice, finance and cash in the bank to make that completion payment.
If you want to buy a business you need to try and buy five, and then you might end up with two or three maybe if you're lucky.
So the benefit of being the owner of a larger group is that you've now got a bigger team to do the strategy and operational stuff.
So I suppose with growing the businesses and adding locations, sometime next year I'll be at 5 million turnover.

Resources

Buying a business is only the start, which is why we are now teaching what happens next on the Mastermind program. Now, if you've already bought a business, you should be part of my Inner Circle group where we discuss raising capital, integration management, and exiting. Email Maria on [email protected] for more information.

If you are looking for a lawyer in the UK to help you get the deal over the line, then use my own lawyer, John Andrews. You can phone his office at (0345) 2412494 or email him at [email protected].

If you would like to take the next step to learn the best ways of buying a business, without risking your own cash, you can access my free training at: www.dealmakerspodcast.co.uk

Watch my Webinar Training Video: https://www.dealmakerspodcast.co.uk

You can also request a free copy of my book at: https://www.thedealmakersacademy.com/free-book-giveaway/

If you want to jump straight to my live Zoom FastTrack course, please go to: https://www.thedealmakersacademy.com/fast

Connect with Jonathan Jay at: Website: https://www.thedealmakersacademy.com/ LinkedIn: https://www.linkedin.com/in/jonathan-jay-3556b230/ YouTube: https://www.youtube.com/c/TheDealmakersAcademy

Key Highlights

[01:26] Ray Burke's business background

[04:21] How Ray looked for and shortlisted potential business to buy

[05:05] Ray's first acquisition

[12:01] What has changed for Ray since the first acquisition?

[13:10] The second acquisition

[18:20] The third acquisition

[20:58] The mindset of running a group rather than a single business

[27:05] What advice would Ray give to new business buyers?

Notable Quotes

So I structured a deal that I could use invoice, finance and cash in the bank to make that completion payment.
If you want to buy a business you need to try and buy five, and then you might end up with two or three maybe if you're lucky.
So the benefit of being the owner of a larger group is that you've now got a bigger team to do the strategy and operational stuff.
So I suppose with growing the businesses and adding locations, sometime next year I'll be at 5 million turnover.

Resources

If you are looking for a lawyer in the UK to help you get the deal over the line, then use my own lawyer, John Andrews. You can phone his office at (0345) 2412494 or email him at [email protected].

If you would like to take the next step to learn the best ways of buying a business, without risking your own cash, you can access my free training at: www.dealmakerspodcast.co.uk

Watch my Webinar Training Video: https://www.dealmakerspodcast.co.uk

You can also request a free copy of my book at: https://www.thedealmakersacademy.com/free-book-giveaway/

If you want to jump straight to my live Zoom FastTrack course, please go to: https://www.thedealmakersacademy.com/fast

Connect with Jonathan Jay at: Website: https://www.thedealmakersacademy.com/ LinkedIn: https://www.linkedin.com/in/jonathan-jay-3556b230/ YouTube: https://www.youtube.com/c/TheDealmakersAcademy

Previous Episode

Jonathan's guest spot on the Empire Flippers podcast

In this episode, Jonathan Jay is interviewed by Greg of the Empire Flippers Podcast, and they talk about the complexities of structuring deals and provide valuable insights into the world of acquisitions. Jonathan and Greg discuss the importance of looking for the right characteristics in an acquisition target. They talk about ensuring a smooth transition by having a management team in place. They recommend targeting larger, established businesses with positive cash flows for greater profitability and financing ease.

They also discuss ways to increase business valuation by making oneself redundant, making it more attractive to potential buyers. They explain the no-money-down approach, particularly in situations with limited funds, and shed light on leveraged buyout strategies. Mitigating financing risks is addressed, with Jonathan advocating for acquiring businesses with positive cash flows to support debt and cautioning against distressed businesses.

Key Highlights

[01:46] How Greg met Jonathan Jay

[03:36] A brief background of Jonathan and what he does

[05:59] Structures and systems Jonathan would put in place if he was to buy 48 businesses again

[08:16] Characteristics to look out for in a business

[09:00] The importance of having the right management team

[11:11] How Jonathan’s strategy is different from others

[14:29] How Jonathan structures LBOs

[15:25] Why buying distressed businesses is a trap for newbies

[23:55] How Jonathan exited the nursery schools

[29:31] The letter system for finding retiring business owners

[32:29] Common mistakes that people make while buying businesses

[35:50] Businesses that are hard to finance

[38:30] Best advice ever received by Jonathan

[40:16] How to connect with Jonathan

Notable Quotes

The ideal business to buy always has management in place already.
I always tell people to go for the bigger businesses because you'll make more money, they're easier to finance, they're easier to buy, and they run themselves better. They don't need you.
Making yourself redundant in your business is the fastest way to increase value. And it just makes your business easier for someone to buy from you.
A beginner should be looking for a business that has made money day in and day out for the past five years, has predictable cash flows, can support any debt you put into the business, and still has enough profit to take money out.
Buying a business is not about the business you will own but the person you become.

Resources

If you are looking for a lawyer in the UK to help you get the deal over the line, then use my own lawyer, John Andrews. You can phone his office at (0345) 2412494 or email him at [email protected].

If you would like to take the next step to learn the best ways of buying a business, without risking your own cash, you can access my free training at: www.dealmakerspodcast.co.uk

Watch my Webinar Training Video: https://www.dealmakerspodcast.co.uk

You can also request a free copy of my book at: https://www.thedealmakersacademy.com/free-book-giveaway/

If you want to jump straight to my live Zoom FastTrack course, please go to: https://www.thedealmakersacademy.com/fast

Connect with Jonathan Jay at: Website: https://www.thedealmakersacademy.com/ LinkedIn: https://www.linkedin.com/in/jonathan-jay-3556b230/ YouTube: https://www.youtube.com/c/TheDealmakersAcademy

Next Episode

Buying a business in Scotland

This week Jonathan talks to Chris Stone, a hearing healthcare specialist based in Glasgow. Chris is a client of Jonathan’s, and having already bought one competitor, he is now on the hunt for further acquisitions. In fact, right now he is the fastest growing hearing healthcare provider in Scotland.

The conversation begins with how COVID has affected the business.

Key Highlights

[01:14] The effects of the pandemic

[02:40] Setting turnover targets

[03:36] The first acquisition

[12:00] The role that peer groups can play

[14:54] Possible additional acquisitions

[19:10] Structuring the next potential acquisition

[22:52] The strategy moving forward

[24:05] Advive for new business buyers

Notable Quotes

Very quickly after we had hit heads of terms with that first acquisition, we got approached by another two or three businesses to sell to buy them out
So we took that business on eight years ago. We got it to a million turnover. It took us four and a half, five, four and a half years to get 10 million turnover
And I think if things keep going the way that they're going, we've probably got a strong enough management team now structure offering that we can start growing organically very quickly
With five years of history behind it, management team in place,
And I just thought, if they can do it, I can do it

Resources

If you are looking for a lawyer in the UK to help you get the deal over the line, then use my own lawyer, John Andrews. You can phone his office at (0345) 2412494 or email him at [email protected].

If you would like to take the next step to learn the best ways of buying a business, without risking your own cash, you can access my free training at: www.dealmakerspodcast.co.uk

Watch my Webinar Training Video: https://www.dealmakerspodcast.co.uk

You can also request a free copy of my book at: https://www.thedealmakersacademy.com/free-book-giveaway/

If you want to jump straight to my live Zoom FastTrack course, please go to: https://www.thedealmakersacademy.com/fast

Connect with Jonathan Jay at: Website: https://www.thedealmakersacademy.com/ LinkedIn: https://www.linkedin.com/in/jonathan-jay-3556b230/ YouTube: https://www.youtube.com/c/TheDealmakersAcademy