Jeremy Harbour

Okay, great. I thought I would just talk about a very general principle in the M and A in the way that we do it through the Harbour Club, and that is to really focus on ignoring the traditional kind of procurement process of M and A. This is where everybody kind of tries to knock people’s values down, suck through their teeth, and basically behave like a bit of a secondhand car dealer in negotiations, and then also going through this very sort of detail orientated procurement process. I want to try and think of M and A in the small business scenario as more of a sales process. So you could look at it as like buying is selling. And this is really quite important because ultimately when you do a deal between a buyer and a small business owner, it is exactly that. It’s a person-to-person deal.

Jeremy Harbour

When you look at a very large transaction in the corporate world, of course it’s going to be one army of lawyers and accountants versus another army of lawyers and accountants. And basically what you create is what I describe as the bugger’s muddle, when you have these two teams trying to get a deal done together. If you think about it, you’ve got a whole bunch of people who are all paid by the hour so they’re incentivized for things to take a long time, and yet you’re expecting them to complete something quickly. Now the beauty is when you do a deal with a small to medium sized business, you don’t need all of these lawyers and accountants involved in the transaction. So try not to listen to what other people are telling you about how a deal should work, and think about how you can work a deal out between two people.

Jeremy Harbour

And when you do that, it’s mostly about rapport. So it’s having a good relationship with the person, just like in sales. People buy from people. So the offer and the product sometimes is secondary to the people. I remember when I did the very first ever Harbour Club, we had this idea that basically everybody would come along to the meeting and they’d listen how I negotiate a deal. Unfortunately there was five of us. So we all went to this meeting and there’s five of us sitting on one side of the table. The other guy is sitting on the other side of the table like he was being interviewed for something, and we couldn’t get any rapport and it was a really awkward situation. So the second time I said, “Okay, well the person who finds the lead, they can come with me on the deal, but they have to give a sort of blow by blow feedback to the rest of the group as to what they learn from that meeting.”

Jeremy Harbour

So we go to the second meeting with the guy and we discuss it, and when we come back and it’s feedback time, Andrew, the guy who came along with me, just fed back to the group, “Okay, I get it now. You just have to get them to like you enough to sell you their business for a pound.” So he was being a little bit facetious and there’s a little bit of a joke in there, but also it’s true that there’s many a true word spoken in jest, and that if you look at that from the flip side, there’s no way you would be able to buy the business for a pound if he didn’t like you. So there is a real element of truth there that you have to build that rapport, you have to create that relationship, and then you have to focus on fixing the business owner’s problems, with one eye on not paying any money and not borrowing money to get the deal completed.

Jeremy Harbour

So that was really the essence of this little video was just to put the idea out there that this isn’t a procurement process, this is a sales process. Buying is selling. You need to present the offer and the opportunity like you’re selling to them. So that’s it. Thank you.

Speaker 2

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