#344 Inner Circle Mambers Panel - Questions and Answers

Hi, this is Jonathan Jay, and welcome to Business Buying Strategies, the number one podcast for people interested in buying a business without risking their own cash. Now this week, something, again, a little bit different, I want you to listen in on a panel discussion, that happened at one of our recent mastermind groups where I invited. a selection of our Inner circle members. Remember, our Inner Circle members are people who have bought at least one business.

In fact, the average number of businesses that people inside the inner circle have bought is six. And, in front of an audience of people who are new to the world of business buying, I ask them questions. The audience asked them questions, and we had a lot of fun with the answers. I hope you enjoy this.

So, , we need some questions. We need some topics. You know, these guys love stimulating questions. , , We want questions that get them thinking about situations because I think that's part of the fun of masterminding with people who've done deals.

You, you think differently, don't you? And you sort of challenge each other to, to think in different ways. So who would like to kick us off with a topic? A subject?

Okay, we'll we'll start here then we'll go over there. Okay. So my questions for Tim. Tim, , I'm obsessed with your first deal and I know I've spoken to you about it before already, but can you tell us how many letters you sent out?

How many callbacks do you land in that enormous first deal when you, can you remember birth of those details? I'll be really honest, I didn't really track it. I know it was nine months in, I remember, 'cause I was actually on holiday when we signed hot. I was away.

So I signed Hots in the ma I started the Mastermind in January, signed hots in the May, and then I think we completed early. January. It was a bit of a longer legal process 'cause I didn't really know what I was doing. So it was it was actually John Andrews who managed to get the deal done.

'cause he came in and just said, let's do the deal in terms of the letters and stuff. Is this the situation where you actually were using a different lawyer and he retired halfway through my transaction? I don't honestly, it literally working with me. He thought I've had enough of this rubbish and jogged off.

Yeah. So, and then John Andrews was the guy that came in. But yeah, I don't know if I had my time. Again, looking back on some of them leads that we were, my initial calls and stuff, they probably were deals in there because I was relatively new and experienced.

I couldn't convert them. I can't, I don't, I dunno, it's you need to do as many calls until you get your first deal. I think sometimes, I don't know the reason why you're asking the question, but I think sometimes people are looking for like a scientific, if I do this, I get this. But then, you know, we've got great examples of like Dan did 400 letters, got one response that was the company that he bought, made him a multimillionaire because had millions of pounds in cash.

And the day he bought it, that bloody Russell did nine letters. Whoa. Tell everyone about Russell. Oh yeah we kind of have a, you know, the, its award evening tonight, right?

I mean there's all these various awards and stuff and Russell keeps trying to get conversion rate of the year added in because he did nine letters and he bought four of them. And so he's like, there should be an award for that. I dunno if there is yet, but he's a bit annoyed because there isn't. So he could be, and it annoy, I think it annoys everyone sat here because they guy, you know, four outta nine is, I mean, it's ridiculous.

It is ridiculous, isn't it? I mean, how does that happen? So I'd love there to be a completely mathematical process, but there's an element of luck in it, isn't there? There's got to be, and because it is so random and some people you gotta work a little longer, work a little harder but without any doubt whatsoever, the more effort you put in, the luckier you will become.

There's no, no doubt about that at all. Does that help you? Does that answer your question? Sure.

I was gonna answer that as well. And I've said this before, other talks we've done that, it's the domino leaflets analogy where you receive the Domino's leaflet every week and you don't want it that week, but one particular week you want dominoes. So that's the kind of model that works, if that helps. Yes.

So it's really basically a timing issue between you approaching someone and them having those thoughts. And you it's like saying, I'm going getting a website for the business. Which day of the year should I switch the, keep the website on? I'll switch it off the rest of the don you have it, you have the website on 24 hours a day.

'cause you never know when someone might be interested in buying what you sell. You don't switch it on and switch it off. So that's the same as looking for businesses to buy. You don't switch it on and switch it off.

Really. You should be looking all the time because you never know. Just to add on that, the, a company we bought last October, I spoke to him on the Thursday. He first called me on the Thursday.

He literally said a deal fell over the day before and then we'd signed hots on a new deal five days later and then went and bought it. And you can't time that, if you know what I mean. Yeah, abso absolutely. So there's a lovely bit of luck sometimes, but again, the more you put yourself out there, the luck you become.

Anyone else want to mention something on this? This is Johan. I introduced you to Johan earlier, but he was in the the dark corner over there. There's less glare on my head when I'm over there.

Yes. Look, it is down to luck and you've got to be doing it all the time. But there are times of years. So in my industry, it turns out in accounting and bookkeeping, hitting people in August is a really good time.

Every single one of my deals have been in August because they're working mums that have had the school holidays and decided to reevaluate their lives hitting in January. There's a recruitment crisis in January. Everyone quits their job. Everyone hits the housing market in January 'cause they're fed up with their houses after a year, after a week at home for Christmas.

Like DIY projects get put in January. 'cause they've fed up with the DIY in the house in Christmas. So it's the same with buying a business. They're fed up, they've had two weeks off with the family.

They want to reposition their life. Start the new year. Is it? There's a Friday.

Friday. But if you were approaching accountants to buy accountants in January, that's the worst month of the year. Oh yeah. I wouldn't do that in January.

But know your industry. Yeah, but what I would do is I'd send a huge wealth of letters out in February if I'm trying to buy accounting firms. 'cause I know they're all in the back crying. 'cause they're still chasing someone's tax return.

Good point. There's more pain. Yeah. Yeah, absolutely.

I would say on my deal, my first. I put you to sleep on my first deal, I sent out 300 letters. Okay. Well, it actually, it was the second set of letters I sent out.

So I'd sent out 300, got nothing out of it, resent 300, got one response, which is the one I bought. And the letter arrived on his wife's desk on his 70th birthday and she turned to him at the breakfast table and said, ring that guy now. And he did. There's absolutely no way you could time that.

No, it's brilliant. It would be impossible. Yeah. How about you, Ben?

Patience for me each time. I've just picked the one that I want the most and then just look for others, have others in mind, but then just wait for the one that I really want and it just seems to happen. Yeah. And building that rapport with them.

Yeah. And you've got a an FD now? Yep. Yeah.

Fantastic. Hows that working? Starting in January. Oh, alright.

Okay, great. Okay. But but we can I tell you the irony because so, so, so I, I put an advert on Indeed two days ago for a part-time bookkeeper. And I thought, why am I doing this when Ben's got two?

And I could have one of his, I think my peak of, for about four. Yeah. You have four? What?

Yeah, I still probably got four actually. 'cause I still need to report into the, you've got four bookkeepers, four bookkeepers part-time in different businesses. Okay. Okay.

And how, what's your revenue now? No, with the new acquisition. About 20 million. Okay.

That's all right. You happy with that? Yeah. That's okay.

That's okay. Anyone else on the deal sourcing letters? Any experiences that they could share? Lee.

Hi Lee. I'll go. Hi. So in our industry we've got quite a lot of competition in our area.

And the average age of going back to what you said about no year industry, average age is about 66, 67 of directors. So we specifically sent out about 35 letters to companies we wanted to speak to. Got nine calls back, bought one of the companies. So yeah.

And we had, we were inundated with people who either wanted to give us the business 'cause they were old and fed up of it, or we just weren't interested in it. So it was good. It's knowing your industry, I think as much as anything. Where was the person I was talking to about Windows and doors earlier?

Yes. There you go. There you go. This is the, you connect.

Yeah. Okay. So again you were very targeted very targeted. Yeah.

You know, which area that you're working in. Exactly. The type of business. 'cause you have one of those already.

Yeah. Great result. Really good result. Anyone else?

Dean, anything on that? I used to hate maths at school, but you have to understand that you're in the game now of just statistics. So don't be afraid of when you send, obviously the letters out that I think there's guys on the stage that have sent letters out, but it's been months if not years, where someone's actually responded to them. So don't feel as though that Martin mentioned it last week.

Sorry, just to clarify the point. So you get all your initial responses. Absolutely. But people sit on it for months, if not years, and then pop up two years later and say, I saved your letter.

So what you do now will have an impact on the future. It's twofold. It's a case of we have to understand that time kills deals, which it does. However, don't be afraid to play, as Ben says, they're the patience game because patience is actually power that he who speaks last will win the negotiation deal.

So you have to just make sure There's an awful lot of cliches in that. I know. I apologize. Yeah.

But it is really it's really important that you do yeah. Play the patience game for sure. Yeah, fan. Fantastic.

Fantastic. And Martin, can you just pass it along to Martin please. Yeah, so I was just gonna add on there about people targeting, people reti who are due to retire in the deals we are doing right now. Five of the eight are mid forties in Alchem eight right now.

80% are mid late thirties, early forties. 'cause there's so many people now who have built businesses over 10 years and they're fed up with the current government. They're fed up with COVID, they're fed up with energy crisis. They're fed up with how hard it's getting and they want out now while they can still get a career change.

But coming back to the letters, I challenge anyone in this room to do 30,000 letters and not buy a business. So commit to that. That's a lot, Marty. And then come out and do it.

That's a lot. But mentally that's a lot. 30,000. But the point is, if you did 30,000 letters and you only bought one business, it would still transform your life.

And I guarantee if you did 30,000 letters, you'd probably be buying a hundred. Where's, yeah, I mean, yeah to be fair to do one deal. I mean, you know, if you're going to, if you're going to like, you know, you are exceptional in that your numbers are always bigger because you have off the chart ambition and, you know, you do 30,000 letters to buy 20 businesses or 10 businesses, or 15 business or 30 businesses. But business number one, I mean, yeah, you don't have to look so hard.

No. The point was more that if you commit mentally to 30,000 Oh, I see. Yeah. After your first thousand, if they fail, you're only Yeah, a little bit.

And I remember my first business went under my first one moment, turned around to me and said, I hope you got that entrepreneurial thing outta your body. And I said, eight outta 10 businesses fail. Nine outta 10 do. We've got eight more to go strap on.

And the next one really thrives. So it's the mental mindset of failure is okay, you don't succeed your way to success. You fail your way to success. So commit to the journey, not the number.

Yeah. Ab absolutely. And you know, when you I've done 10,000 a month at times, so actually when I say Yeah, that I get it. Absolutely.

So, okay, great. Great subject. Thank you for getting us started. John, now I've got the mic, we've got both mics.

Is it a different subject? Different question. Could you just pass that John just behind you to that table. Thank you.

Hi. Hi. Thanks. So obviously a lot of you seem to be speaking from hindsight in that you got, you say you gotta know your sector, but quite a lot of talks people didn't have a sector when they started.

Where did that fall and how did you kind get to that was Oh, right. The sector con, that's a good one, right? The sector conversation. How do you choose a type of business is, so is that really what it's about?

Yeah. How do you choose the type of business? How did you, the sector Who'd like to kick us off? Martin, you've got the mic, so over to you.

So for me, I looked at my current businesses and said what sector feeds those businesses? So we had morg, we had mortgages, life insurance, health insurance and estate planning. Accountants are a great introducer for them. So we targeted the accounting sector and I knew nothing about accounting.

I sold my accounting Phantom Martin, and then I brought more accounting firms for Martin. So we knew our sector was accounting because accounting's got a major staff shortage at the moment. Like university people were coming out at 20% down year on year for accounting. 'cause we're really dull and boring.

So for us it wasn't necessarily about expansion for the revenue, we were looking for expansion for our employment base. So every acquisition we've done has been because we've targeted the employees in that business. We know how they're trained, we know how they work and you know what's even better? A I'm taking on five staff at a time that's efficient.

I don't have to re-interview them, I don't have to recruit them. They all just come with a business and it comes with loads of customers that pay their wages bonus. So yeah we targeted and continue to target accounting and bookkeeping primarily to help us scale. 'cause we can't recruit quick enough any other way.

Great. So actually it solves a recruitment problem. Yeah. And a growth problem.

Yes. So my sector, I mean the, I was already in a sector which was mechanical, electrical contracting for hospitals. That was my, that's what I was looking for when I started this program. And my almost first deal was an electrical contracting company in Manchester.

And that fell apart at due diligence stage. And in going through that process, I realized I actually hate that sector. Having spent 20 years in it, I thought, why the hell am I doing this? So I then switched and decided to look for manufacturing businesses in Yorkshire, keep 'em close to home, anything within 25, 30 miles of home at the most, .

And just sent out manufacturing and wait to see what came in. So I'm now in engineering, manufacturing and that was basically because I decided to just go see what was there. And I've now found something I actually really enjoy and it's completely different from what I've spent the last 20 years doing. Interesting.

So I've actually been rein, re individualized blah. Can't speak sorry. Yeah. To get going again because I'm doing something new.

Yeah. That it's giving you a new lease of life. Absolutely. Lease of life.

Brilliant. And I'm brilliant, really enjoying it because I'm doing something completely different and I think sometimes that's what you need to do. Yeah. Fantastic.

Thank you. What I would just say from an outsider's kind of point of view. Is just 'cause we are listing what sectors we are in. Don't target that just 'cause you've heard success.

Sure. I've literally had four deal makers last year come to me with the same deal. 'cause they'd all heard that someone had a deal in that sector. They all sent letters out in that area and the guy was playing all four of them off against each other.

'cause the letters landed on the same day. There, there are 3,600 business sectors. Right? Yeah.

There's no need to be bumping into each other all doing this. Exactly the same thing. I mean, there's enough for everyone. And you are right.

Just because someone's been successful, that doesn't automatically, I mean, a, a great example is is funeral care. So, so we have funeral James and Funeral James. It is not his real name, but but funeral. Funeral, James, you know James.

Some of you know James. Yeah. And funeral James is just made for funeral care. I mean, he looks right.

He sounds right. He's got the right personality. I mean, in, in another life, he was definitely an undertaker. Okay.

He's just perfect, which is why he's so successful in it. But someone comes along with a different personality, different style, different way of dressing, different look it wouldn't necessarily work for them, so, so choose what's right for you rather than just because something that someone else has done. Yeah, absolutely. Yes, Lee.

Yeah. So, sector aside, I mean, I really like acquisition. So, so you've got a choice I guess when you're in, when you find out what you're in this room, you obviously love acquisition. Do you go with a new sector, something that you think might make your money or go with what you love now?

Personally, we went with what we know and what we love because we've been doing it for 25 years and we found that doing a deal, doing a couple of deals, it reinvigorates, how's the word re reinvigorates you into enjoying what you do? I think we would all say that we love what we do. Now, we probably wouldn't consider ourselves just a joiner or an electrician, ex electrician you know, that sort of thing. It's deal maker.

And then for me, it's love of the industry. So if you find something you love, find deals in there. Brilliant. So, so your identity changes.

You're no longer the person who does a job in a business. You are the deal maker now. It's a completely different identity. And I think that's very empowering because it means you can go anywhere in the world.

Any country, any sector, buy businesses. I mean, it's just it's just an incredible skillset that you have. Tim I think on sector I'm a big believer of sector doesn't matter and you don't have to know the sector to do it. When I first started this, I didn't know any sectors and I probably bought in five or six different sectors over the past few years in different industries.

And yeah, I didn't know any of them. Obviously I've been working with Harry for the past 12 months and we bought four or five in a brand new sector that we fell into by accident, just 'cause we were targeting another sector. And then one of the responses was the sector that we ended up in, but it was potluck, if you know what I mean. And then we bought some more.

So it really it, I mean it is just a limiting belief in terms of sector. It just, it's so, so much evidence to say why that is the case. You don't, obviously it helps, right? If you know what sets you wanna buy and you've got experience, there is value in that.

But you can still do it without a hundred percent. You just have to, I hear quite a few masterminds in particular that are a bit worried that they don't have the the skillset in that industry. Now, the thing that you don't have to worry about is you are now becoming the expert and are the expert in business acquisition. You've paid training at the highest level to be with the best of the best.

And I believe that it's the best of the best. Like I said, you are what Martin said earlier, you're in 150 if you are mastermind group plus in a circle, plus the power team, you can't buy that experience at the price that you've got. Our firmly believe that just to have 90 seconds with that chap at the end. Like I said, Caroline's already been over.

She's sorted out the email and the letters like I said, and just to have the experts already within the room, for me, that's priceless stuff. Yeah, I think a lot of it's been covered by the guys. And from what Tim said, you know, we almost chose three sectors, targeted them, see where it lands, find the platform business that we mentioned earlier as well. And it depends what you want out of your acquisition.

So I bought, it's been on podcasts, bought some barbershops during lockdown, not for, and mainly just to see if the process worked and it did. They're both deferred, paid off. I came into some money a couple years after I purchased them and they were paid off and I sold actually the last second one early this year. But they've cash flowed for the last five years.

They've paid for cars, school fees and all the rest of it. So for me it was buying something that, an asset that would produce income. Monthly. Daily, which takes half an hour of my time.

Obviously I can't cut hair. So it is, if you understand how that works, you know, we go and get a haircut. You, you know, you go and you pay, well, you go and you get your haircut colored, whatever and you pay and you leave. So there's no debtors, no creditors.

It's an easier business. So you can start with all, it doesn't have to be the big numbers, but for me, that was my kind of, let's just see if this process works. Yeah, you don't need to be able to do it, just understand it. Great.

Thank you very much. Yeah, so it's understanding the acquisition process and also having the right team around you who can do the operations and you know, you can search LinkedIn for people with a certain background using certain keywords, and you'll find plenty of people who are looking for a new opportunity, or they're semi-retired or completely retired. They've been retired for six months and they're bored. They're at home bored thinking why aren't I wanna do something new, a new challenge.

And they see a bit of you in them and they say, you know what? I'll work with you. I'll help build this up. I'll be the, I'll be your expert and I'll advise you which deals to do and what to look out for, and I'll help you with this and run it all for you.

When you find someone like that, well, and they're happy and they're happy to take a salary for doing that with maybe some share options, a bit of the upside in the future, just let them go. You go and do the deals, you orchestrate the the financial due diligence and the legal stuff and you've just orchestrated it all and let them run it and Wow, that's so exciting because now you've got everything you could possibly need. You be the deal maker. They'd be the business operator.

Yeah. Good. A different subject. So we've had deal sourcing, we've had choosing sectors, something else.

Yes. You had your hand up earlier. Is it different to what we've just said? It is different, yeah.

Okay. I just wanted to talk about structuring your businesses. Do you all use the same structure? Do any of you actually have a a parent company which is abroad or part of the business, which is abroad for tax reasons.

Okay. 'cause you might be traveling, decide to travel a lot in the future. Okay. So, corporate structure, holding companies, SPVs, do you follow what we teach?

What's in the members area? Have you done something different? Do you have maybe a family trust? Do you have anything offshore who'd like to.

Handle that to start off with, anyone got any quick, anything particularly different to what we would do? I know the boys at the end will give a more detailed answer, but for me personally, yeah, like, you know, target SPV holding company, UK based depending what your plans are, obviously you're planning to go to some of the countries we mentioned earlier, maybe look to set up there, but no, I mean again, it's a personal individual thing I think. Yeah. And usually if you want something, if you want some specific tax advice, then we've got the people you can speak to, but then it starts to get sort of tailor made to individual circumstances, to your age, to your dependents, maybe all of these different things.

Yeah, and I think we've got quite a few bits going on in the Middle East. So, you know, obviously Dubai, we've got an eilish tie as well. So as Jonathan's literally just said, that was the only thing I was gonna say is when you're talking about that sort of stuff, you need to make sure that you're having the right conversations with the right people. 'cause you know, the whole point of A-A-C-F-O and tax and VAT specialist is exactly for that precise reason that we're in a fortunate position.

We're not talking about, you know, small corporation tax bills we're on about saving and making a lot of money. So these are decisions that you can't take lightly and you have the right people around the team, which obviously Jonathan gives in abundance. We had a for those of you who are in my bay last year, we had a great session, didn't we, on, on structuring your, the ownership of your assets to limit liability to protect those assets and thinking ahead. And I think when the audience was asked who has a will, it was very few people.

And then those people who did have a will had what they described as a simple will, which apparently I didn't know. This isn't worth the paper it's written on in some cases. I mean, it's not, it's everyone thinks, 'cause you've got a piece of paper saying last will and testament, then that's good enough. You know, if you've got assets beyond the sort of the typical average, I mean, if the UK average salary is, what is it?

36, 30 7,000? I dunno what the UK typical asset value that people have when they die is, but I don't think it's gonna be that much. But if you are not gonna, that's not you are different to that. So you can't just go and get a will from the rack and WH Smiths you know how they sell wills?

Yeah. And fill it in. And that's good enough. It's just not good enough if you are gonna be protecting assets in the millions, which you should be thinking that way.

Sorry Tim. Funnily enough, I actually was texting my accountant yesterday saying, can I move my holding co company over to Dubai and live here? And Johan will, I'm guessing Johan will say something similar. But basically if you live here and you have a company over there purely for do, you don't pay as much tax.

Apparently HMRC are coming down on people. They're hammering people. It works if you live aboard, but you can't live here and have that. And I literally, weirdly, I literally had that conversation yesterday in terms of all our kind of corporate structures and whatnot.

We, I have very similar, well, we have the same model where you just have your Topco Midco trading company and then we build that out. But I just kind of let the accountant tell me what to do. Instruction it. Yeah.

Don't try and get this advice off chat GPT. That's what we're saying. You know, make sure it's specialized and Yeah. And you don't want, you don't want a free adv advice, a free 15 minute advice session with someone.

You wanna pay for it. You wanna pay for good advice. And it's worth every penny. Yeah.

Don't as as Tim says like the government and HMRC are bolting down on this really quickly. There's even talk of an exit tax. 'cause Rachel Reeves is looking at how, hang on, you are all escaping to avoid my tax. Right.

I'll catch you before you leave. So this is really evolving stuff. The more complicated to make it, you're the more expensive you're making it as well. So you start losing tax efficiency there instead.

So if you want to set up in Dubai, you probably need an accountant in the uk, you probably want an IFA in the UK for your personal stuff. 'cause legally I can't tell you what to do. Your savings accounts and bank accounts and stuff, then you need an accountant in Dubai. Then if you start going somewhere else, you'll need an accountant there.

And like for example, America and UK tax systems completely the opposite. So any advice I give you in the UK to be tax efficient, completely and utterly screws you over in America 'cause they tax on the opposite way round. So you've got to make sure you've got the experts in the room and that all talking to each other. But also it depends what sectors you're going into as to how complicated you make it.

So Martin and I can only make our structures so complex and funny looking because Martin's governed by the FCA I'm govern, governed by a ML supervision and stuff like that. When they're doing out their annual checks on us, we are looking, we look a bit funny. They start digging and even if you're doing nothing wrong and they, but they don't really understand why you're doing what you're doing, they're gonna make an absolute headache for you. So if you're going into care sector, anything that's kind of governed, licensed, protected, it's not worth the hassle of saving a few thousand pounds a year in tax 'cause it's going to lo lose you that in expert advice and support during the year just trying to keep people off your back.

So just don't try and outsmart yourself too much. Cool. And then what I'd add on to that is don't over complicate it at the beginning. You can start with a really basic structure, but also you need to think about what your medium goal is because loads of people, quite rightly, wanna reduce their tax.

The more you reduce your tax, the less lending you can get access to as you start scaling your business. So there's a period in your growth where you voluntarily pay more tanks to make the business look better. So lenders will give you more money and then you can complicate your structure as you get bigger. And what is your goals change?

So as Jonathan said, we've got massive goals. We've lost literally gone from having a very simple structure in different sections to restructuring it all for in advance. 'cause we're intending to at some point in the next three to five years, become private equity. So we've structured it.

So now we've got the story of the different sectors that are all in there. We can release press releases about how we've, this private equity firms now acquired these sectors and seeing it grow. So we're setting the story for three years time when we've then have exits to justify and reinve private equity. But right now, just keep it simple.

An SPV buy the company, an SPV, buy the company and deal with everything else. As you grow. Don't overcomplicate it. Thank you.

That's great advice. Thank you. And I mean, there, there are two things that isn't there. There's reducing your tax and you know, you want to make sure that you're not being your own accountant.

You make to make sure you're doing that properly. But also I think there's asset protection. I think I, I think the tax is really sort unavoidable, but the asset protection is something that you can control. And I believe that you should do everything you can to protect what you've worked for and you don't want, because look, smart people can do stupid things.

Okay. You don't want one silly decision that you make in 3, 4, 5 years time to destroy everything that you built up over that time. So protecting your assets, I think is ab is absolutely critical. And there's some great advice available.

We've got people on the team who can who can help with that. Great. Thank you very much. Really good.

So a difference. Thank you. Good. Good question.

A different subject, something different. Something that would be helpful to everyone on anyone. Okay. Right.

We're gonna get the mic. So what we're gonna do, we're gonna pass it from table to table, like a bat on, so across there. That's perfect. Faster than me moving it.

Okay. Is this a different subject? Something new? It is.

It might be a very quick answer, but Okay. Really just looking for some top tips or red flags to avoid buying yourself a job, you know? So. Oh yeah.

Avoiding buying yourself a job. I think that's a great, that's a great subject. So let's go down the line, starting with Martin. So the key I would say is every seller you speak to will tell you they're not involved in the business.

So ask that question early and then at the end, say, now it's really important to us that your staff feel the same support that you give them. So how often are you in the office just for them to see you? Which meetings are you going along? Just to show support.

Which decisions are you signing off on to give them reassurance and then they actually tell you how involved they are in the business at that point. And you know exactly what you're buying. Love it. Anything with a really low profit and low turnover.

'cause a business owner, generally speaking, will take the profit as their income. So if that business is only doing 40,000 pounds, then you're earning 40,000 pounds. And actually for it to have that kind of profit, you probably haven't got the management structure and stuff in place. So yeah, as soon as I, the first thing I do is I go through, ignore the balance sheet.

I go straight down to the profit and loss, look at the turnover and go, cool. Are you happy working for 40,000 pounds a year? Oh no, I'm on X amount of salary. It's like, not anymore.

You're not gonna be. So yeah, turnover and profit is normally the key part. 'cause that kind of turnover or sorry, profit at the end, it's very unlikely you are gonna be able to run that business without being involved. I think from my point of view it's drilling down on who's the second in command really, you know, what, is there a management structure there?

The company I bought, I found out very early doors that the production manager did everything. And the guy who owned it was actually hated by most of the people in the building. So I knew very quickly that as long as I was gonna keep the production manager, which he's proved to be extremely good, then we're onto a winner. But it's trying to find out, you know, from the owner, can I talk to the next tier down at some point during the process?

And then you can start to value where do you think that person can step up and run the business when you're not there. Nice. Thank you. And Ben, how do you avoid buying yourself a job?

Yeah, just looking at the management team that you are acquiring, having confidence that they can, if the seller does exit, that they can take over. It's pretty, that's basically, it really, isn't it? I can't think of anything else. Okay.

That's very very short and sweet there, Ben. It's a, yeah I have actually bought myself a job first time round, or Oh, he did two or three jobs. Yeah, you did. And I think you'd probably see me at rock bottom in the in the meeting.

So the deal we've just done, it was top priority of not buying a job. 'cause we know the sector. So can we just go back to, because I remember seeing you in the inner circle meeting where you were carrying the, Lee was carrying the weight of the world on his shoulders. I mean, you looked like a different person to today.

And that was because you were kind of doing everything, weren't you? Yeah. Yeah. And I said, you, you were doing all the sales for a start.

You were going out, you were being your own sales person for the business. And I said, go and find yourself a salesperson. But you said that you thought that they weren't good. Yeah.

There's nobody out there. There's no, no good salespeople out there. Yeah. And I said, we need to keep an open mind.

Yeah. Put an advert on Indeed. Or Total Jobs or something. And then what happened, there was a few out there, so I think we, we ran the advert for a week and had 30 odd replies to it.

Started to, yeah. Yeah. Off the back of that, interviewed a sales manager, was happy with, interviewed somebody who I thought wasn't the sales manager, started him as a general manager. Okay.

The sales manager then brought in a, an architect as a, an extra sales person. How, what difference has that made to you? Yeah, I feel a bit redundant on the sales. So much so that I went out with the architect who's gonna take over mostly from what I did.

And I felt like the spare part, he was just miles bad, which is exactly how you should feel. This is a business that doesn't require you, if it requires you and it falls apart when you are not there. Is it a business or is it a job? No, that's the question to, to ask yourself.

And even I work with obviously my wife, me and Caroline work together and even she said the other day, I feel a bit redundant at the minute to which she's obviously we're going in the right direction. So, which gives you the head space to go and do another deal. Exactly. Which you did today.

Yeah. Oh, what signed heads today? You signed heads on what? Today?

No, we completed today. Oh. There go. That's cool.

You Oh. Oh whoa. Okay. Okay.

Tell us about it. God, I wanna hear this. So back to the original point we made sure to start with, we, this is from the letters. So we chose, we got to choose the business we wanted to engage with, made sure that the staff were important, so, so that some of the staff replaced me which we found it's a 30 5-year-old business started out of my granddad's original business.

They started there and they left, started their own company. So I've been on a long time, same values. So it's a good, but you wanna know the deal structure or yeah. Well, it's up to you.

It is up to you. If you, if you don't wanna share it's no, it's fine. So it turns over. 1.

65 can do 1.75, 1.8, 1.65 at the minute.

Deal structure was 330,000 pound for the company. He was making about 10 to 12% net profit. So yeah, sorry, three 30 for the company. 130 day one.

So that's two times net? Yeah. Yeah. Okay.

Yeah. 130 day one a hundred was out of their account. 30 across from our other business, and then 200 grand deferred over 10 quarters. Okay.

For two and a half years. Yeah. Yeah. 2.

33 years. Yeah. As a, yeah. I don't often think in quarters, but yeah.

Yeah. So two and a half years. Yeah. Oh, that's amazing.

That's amazing. Don't you think? And that is how you buy a 1.65 million revenue business with none of your own money doing it Exactly like that.

It's fantastic. Yeah. That's really good. Congratulations.

So, so where does that bring your group to in terms of revenue now? 5.5 to six. Let's say 5.

5. 5.5 comfortably. That's all right.

Six 20 net profit pre-tax profit. Sorry. Yeah. Okay.

So, so a af after tax, it's about just under 500, 4 80 or something. Yeah. Yeah. Yeah.

That's okay. It's alright. Yeah. You happy?

Yeah. Are you coming to the party tonight? Yeah. Fantastic.

Are you be celebrating? Yeah. At the bar. At the bar.

All I'll say is, I mean, Dean obviously has said how many times the group help. Good and bad. The group has helped massively. You see people nose diving through deals and it's none of their own fault, but, you know, you get to pick the bones outta some things.

It really does help. So the first time we did it wrong, as I said, we bought a job several jobs this time, make sure it's right from the start. Yeah. Nice one.

Thank you very much. That's great, Lee. Congratulations. They're so good.

So good. So the question is how do you not buy, how do you not buy yourself a job? Yeah. Well there, there's obviously been some really good advice.

I'll just give two example live examples we're working on and you can tell me whether you think they were, we are buying a job or not. So we are, we're, we are going for two businesses at the minute. One of the owners mi keeps missing my call and then he texts me saying, sorry I missed your call. I'm on the tools all day.

Can I call you at half five? So that's generally a good sign. And then the other one, we can never get hold of him 'cause he's always on holiday and he wants to sell. And it's a bit of a pain in the bum because we are just like, look we can do something.

If you just focus for like three days, we can get this wrapped up, but it, then he is away and you can kind of figure out who's, so they'll give away little hints when you're talking to them and whatnot. So yeah. It's really important. This one that's for me is a massive a massive talking point that I'm a bit sneaky how I do this on a call.

So this is cameras off that we go through the organizational chart. Then I'll slip in comments regarding, you know, the buying of such or the HR of such in the finance of such. And I'll say, you know, what's the process around that? Oh, well, you know, I'll get a bit of invoicing done during the day.

Or so, five minutes on the conversation, maybe a HR conversation will come in, oh, who's doing your purchasing five minutes later? And they'll sort of slip in and they'll slip themselves up, unfortunately, and it's a game of chess. You have to understand the art of negotiation is, you know, really well thought out. And that's why I say about the speaking last part, because just let them over deliver and just listen to all the nuances in between.

It's what the don't say that's important. So, oh, here's my organizational chart. You know, I'm not in the business at all. So when it comes to requiring, you know, new materials and whatnot, what's the score?

Oh, yeah. Well, I'll, you know, I'll make that call. Okay. Noted.

You know, I'm always making notes when I'm on a teams call. I'm like this on a call because I have to write notes just to revert back to, because you don't want to know you, sorry, you don't wanna tell them that you know too much about their business. It's really critical when it comes to, you know, getting the best out of the deal. Hopefully that made some form of coherence sense.

Yeah, that's great, Dean. Thank you. Thank you. And Harry?

Yes, following on from what Dean said actually. So the list of documents that Jonathan gives you when you ask a seller. So part of that I'd ask for, if they don't send, it's an org chart, which is what Dean talked about. So in that org chart, he'll see where they sit and all the rest of it.

And it's quite easy nowadays. You can look and look on LinkedIn if they're a production manager or whatever they are, you can look 'em up. And also the other thing is on when you get the the full accounts, not the abbreviates, but the full accounts from the seller. A lot of figures can be manipulated, but usually number of employees is a good giveaway.

So I'll always look at the number of employees was that will change every year. So you can almost mirror that against the change in trends, in numbers, et cetera. So if it's got two employees, guess what? So that's, hopefully it's helped.

Yeah. Great. That's great advice. Yeah.

Brilliant advice from all of you. Thank you so much. Thank you. Really good.