Jeremy Harbour
Hi everyone, my name is Jeremy Harbour. I run an experiential training course called The Harbour Club. In The Harbour Club, we teach people how to buy and sell companies using no capital up front, and without borrowing money from banks, or investors, or the person that’s selling the businesses. During the course of The Harbour Club, you’re going to learn all sorts of things, but today I’m going to teach you one very small tip, which is one of the things we use to help businesses that have difficulty with cash flow.
Jeremy Harbour
If you do the full Harbour Club weekend, we’re going to teach you how to find businesses, we’re going to teach you how to hold meetings with people so that you can bring a deal round to a no-money-down conclusion. We’re going to show you how to structure a deal so that there’s no money changing hands. In fact, we’ve got six different specific kind of cookie cutter deal models that you can take away and go and use for doing no-money-down acquisitions. Because sometimes these businesses can be in financial problems, we’re going to show you a whole load of financial engineering techniques you can use to fix just about any business. We’re also going to show you how to groom the business for sale, and then how to get an exit for the best possible price.
Jeremy Harbour
Our goal really is to pick businesses up using little or no capital up front, and then sell them very shortly afterward for between six and seven figures. I’ve done over 30 deals like this myself, many of which we use as case studies over the course of The Harbour Club. Anyway, I promised you a little tip on how to improve the cash flow in just about any business. So, we’re going to take a really typical business that we’ve bought, and I’m going to just show you a quick cash flow forecast for that business, which shows the money coming in and the money going out.
Jeremy Harbour
Now as you can see with this one, in the first week they’ve got 12,000 minus figure in the bank. The second week it’s 3,000. The third week it’s 10,000. This typically would be the type of person that will be looking for 12,000 of investment to try and fix the problems in their business. Well, we’re going to do one really simple thing, and you might all groan and moan that it’s really obvious or really simple. But very simply, we’re going to get that little keypad thing that you use for the online banking, and we’re going to drop it in a glass of water, or stamp on it, or just hide it, generally. We’re going to dust off the check book from the drawer, and we’re going to start paying everybody by check.
Jeremy Harbour
Now a really interesting thing happens when you pay people by check, and that is that you get extra time. Now what a lot of people don’t realize is that cash and time are really intrinsically linked. Most people always look for cash in either getting extra sales or extra profit. Actually, often, getting extra sales can have the opposite effect on your cash flow, and cause you more problems than it solves. By just creating more time, you create more money in the bank, and I’ll show you how.
Jeremy Harbour
You pay everybody by check, you’re going to have two days of time in the post, and you’re going to have three days of clearing. In fact in many companies, you’ll find you get more than just this extra working week, because sometimes the checks sit on people’s desks for ages because people aren’t used to receiving checks anymore, so they may only go to the bank once a week.
Jeremy Harbour
Let’s look at what happens with our same spreadsheet when you simply move all of the payments one week forward. As you can see, before we needed 12,000 to solve the problem, but now this week, we’ve got 6,000 in the bank. Next week we’ve still got 500 in the bank. The third week we’ve got over 3,000 in the bank, and we finish up with 17,000 in the bank cleared funds without any problems all the way along. That’s just from simply paying people by cheque. So next time somebody calls you and asks for payment, you can tell them the check is in the post. Thank you.
Jeremy Harbour
Hi, my name’s Jeremy Harbour. I’m going to talk today about growing your business by acquisition. I had an epiphany a few years ago when effectively I grew my business by a year’s worth of sales in an afternoon, and it didn’t cost me any money, and I didn’t have to take any risks with sales and marketing type techniques. But before I get into that, if we go back to the start, growing up I was always quite entrepreneurial. In fact, I started a business when I was 14 years old, and I left school when I was 15 to go and pursue that business.
Jeremy Harbour
In fact, it went spectacularly bust when I was 19, which is a great lesson in humility. I think everyone needs a good kick in the nuts when they’re a bit young and cocky. It was a really useful experience, and actually it’s really helped me in later life to be able to empathize with businesses that are in trouble, because I know exactly what it feels like to be in their shoes.
Jeremy Harbour
Basically, I was running businesses like this. I was always a firm believer that if you wanted to be successfully, you know, you had to start a business, and you had to work really hard. I did sacrifice everything, you know, I put in the blood, the sweat, and the years into growing my businesses at the expense of almost everything else in my life. It was great fun. It’s a rite of passage. I think everyone should start a business and have that experience.
Jeremy Harbour
But one of the things I realized, I was growing a telecoms company at the time, and we’d grown very quickly organically, you know? So, I think in our first year, we did a few hundred thousand. The next year we doubled that. The year after that we doubled it again. And an interesting thing happened. We obviously appeared on the radar of quite a few of our competitors. Now our competitors were looking at buying us out, because obviously they could add our revenue to their business, but they didn’t have to take all of our costs.
Jeremy Harbour
They could get rid of our office, and our staff, and everything else, and just add the profitable revenue, which meant that they would get a much, much bigger upside from buying our business than we would get from our own business. I basically spent every week having meetings with these various different telecoms company bosses, who were trying to pitch me, and that’s the only way to describe it really, pitch me on why I should sell to them, and how I should do a deal.
Jeremy Harbour
The reason it was a pitch was because there wasn’t going to be any money upfront. All of these deal structures were quite creative. They were all targeting things that I needed and wanted, and that would help fulfill other needs. But ultimately, all the jam was tomorrow, so there wasn’t going to be anything upfront. Now unfortunately, I had quite a few of these meetings. I think too many people are negative on the phone when people ring up and don’t have meetings. But I think I always took the view that it’s part of my business education to meet as many people as possible, and talk about what it is they’re looking to do.
Jeremy Harbour
Sure enough, after a while, what happened was instead of me having two or three opportunities to choose from, I ended up with just short of 15 opportunities, and then it made me start to think about everything a little bit differently. The thought process I had was pretty much well, at the time, I didn’t have any money at all, so maybe I could buy a business. Maybe I could use the same type of strategy they were doing in order to grow my telecoms company.
Jeremy Harbour
I decided to just go out there, and start talking about wanting to find a business. Now a really interesting thing happens when you go out and start telling people what you want, lots of little sign posts pop up that weren’t there before. In fact, all the same conversations you used to have suddenly with this new pair of spectacles on, there’s new opportunities. And it didn’t take long before I started to get opportunities to talk to other telecoms companies about the possibility of buying them.
Jeremy Harbour
I got a few slaps around the face, you know, from not being able to come up with any cash. But sooner or later, I found a 13 year old telecoms company that was based in the UK. It had some great customers, Nintendo was one of its customers, and I was able to structure a deal with him, because he had particular motivations that I was able to satisfy. I was able to structure a deal with him where I bought the business for no cash up front whatsoever. And also, I didn’t have any borrowing. I didn’t borrow money from the bank, I didn’t borrow money from the guy that was selling me the business, I didn’t have to take on investors, capital to complete this deal. And like I say, I effectively grew the business by a year’s worth of revenue in an afternoon.
Jeremy Harbour
And I had an epiphany. I don’t need to start a business and work really hard. I don’t need to put all the blood, sweat, and years in that I’ve been putting in before. You know, I don’t have to run the marathon. I can just do the last 10 yards, and I still get the trophy. That was a really important epiphany for me, and it suddenly made me realize that maybe I’d been doing it wrong all these years. Well, not wrong, but just not the right way.
Jeremy Harbour
The funny thing was, now when I started looking back at all the books and all the things that I’d read before, with this new idea that you can just run the last 10 yards of the marathon and still get the trophy, I realized that everybody that I thought was telling me to start a business and work really hard that they’d all made their money doing deals. In fact, all of the dragon’s on Dragon’s Den bought or sold businesses is the way that they accelerated their success and their wealth. It was almost like … Well, it was a complete paradigm shift. I completely changed the way that I looked at business.
Jeremy Harbour
It was around about this time I basically, having had that epiphany, I went on a little bit of a rampage. I ended up buying lots and lots of businesses. In the space of 18 months, I built up a sort of mini empire of businesses turning over about 13 and a half million pounds a year on a sort of monthly run rate. We had about 135 staff all based around the Hertfordshire area in the UK. And yeah, I became extremely busy doing all of that.
Jeremy Harbour
I bought a seminar company, was one of the businesses I bought, and this seminar company taught people various business skills, and business techniques. And out of the back of that I kind of thought, “Well, how would I teach people what I do?” And it was actually at one of their seminars I started to write a little script down of how I would do a training course. One of the first thing I realized is actually to learn how to buy a business, you really need to buy a business, you know? Because it’s an experiential thing.
Jeremy Harbour
I titled this course The Harbour Club, and I wrote down all the things that would make it interesting for the participant. So, how would they source deals? How would they effectively, continuously source deals, you know? Because they’re not where you think they are. They’re not with accountants, or insolvency practitioners, or people like that. How would they get to have a meeting with these people? Because if you ask the average entrepreneur, “How’s business?” Generally, it’s their best month ever, isn’t it? So you need to be able to have an honest conversation with the entrepreneur about how things are going, and what it is.
Jeremy Harbour
They then needed to understand the no-money-down deal structures that you can use, because there’s lots of different ones. In fact, on The Harbour Club course, we have six core no-money-down strategies. There’s actually kind of seven or eight altogether. But there’s six more no-money-down strategies that we work through, which shows things like how I was able to buy an air conditioning company for a pound. Where we met them at 9:00 in the morning, and at 5:00 PM the same day, we’re being introduced to the staff as the new owner, and then go on and sell that later for six figures.
Jeremy Harbour
How we bought a furniture manufacturer for a pound, 100%, and again, were able to turn that around and sell that on in a very short space of time. And a whole load of other stuff, a call center business. We bought a gym and spa, it was health club, 15,000 square foot health club that cost 3.2 million to fit out just a few years before that we were able to buy lock, stock, and barrel. Actually the way the deal was structured, we ended up 25,000 pounds in front after the deal was completed.
Jeremy Harbour
There’s some really, really interesting techniques that we’ve stuck in there, and everything is backed up with real case studies. Not only do we use the real case studies with the real company names, but we also give you the documents that we used when we completed those deals; all of the contracts, and spreadsheets, and questionnaires, and things like that that we’ve had to do.
Jeremy Harbour
Now, people often ask, “How do you buy a business with no money?” And my facetious answer is you need to start with no money, and try and buy a business. A bit like I did with that first telecoms company, because necessity is the mother of invention. So, I bundled all of that into this course called The Harbour Club to give people the complete package on how to do things.
Jeremy Harbour
And The Harbour Club’s been running very successfully since 2009. The references and things that people give us for it are always incredibly flattering, and very, very positive. But actually quite a few people just want to come along to learn how to grow their business by acquisition. They’re not so interested in all the turnaround techniques, and the insolvency tactics, and the exit side of it. Really, in the beginning, what they’re looking to do is what I did in the first place, which is to grow that company by a year’s worth of revenue in an afternoon.
Jeremy Harbour
Now in order to grow by acquisition, actually one of the most important things, is how you find motivated sellers. Because these people aren’t always in distress, but they are motivated. You need a consistent tactic that will get you those people. Now they’re not with insolvency practitioners, they’re not with accountants, they’re not with business brokers, so where do you find businesses that actually aren’t really for sale that you can then put these deals together with?
Jeremy Harbour
The next thing is then how you have the meeting with them so that you can have a proper conversation about getting a deal done. And then we go into the legal protection, how you protect yourself from not getting yourself into trouble. You wouldn’t like to buy a company that’s potentially insolvent, and then it destroy the business that you have already. Now it’s very simple not to get into trouble like that, but as long as you know how.
Jeremy Harbour
And then the next thing is the deal structuring, so how do you actually put a deal together where you’re not borrowing money and you’re not paying anything upfront for the business? We go through all the systems you need to do that, and then how do you reduce all your upfront costs in doing the deal? We show you how you do it without any legal fees, without any accounting fees, without any cost of due diligence. We have a really smart system for taking all the due diligence costs out of doing the deal. We tell you exactly how I bought businesses, how I found them, how we got the deal done, the whole thing.
Jeremy Harbour
And then if you feel that you want to take everything a step further, you can come on one of my Harbour Club course, where we fill in all the gaps in terms of how you do the financial engineering, the seven steps to fixing a company’s cash flow. For example, we bought an air conditioning company that hadn’t paid its payroll for two months, it was 10,000 pounds overdrawn. We were able to fix that within about six weeks, so that all the payroll was caught up, and it constantly had cash in the bank.
Jeremy Harbour
We bought another business that was 85,000 pounds overdrawn, its payroll was due in a week, and the overdraft was personally guaranteed by the owners. So, the deal we did there was if we could get you off the personal guarantee, and we can pay the payroll, could we have the company? To which they said yes, and then we used a really clever tactic which meant we didn’t have to put any money in ourselves, but we managed to get the overdraft back to zero, get the bank guarantee canceled, and we were also able to get the payroll met on time. And ended up with the company, which we were later able to sell for six figures. That’s one of the case studies that we use in the course.
Jeremy Harbour
If you’d like to find out more, have a look at it, see how that works, and then maybe I’ll see you on a Harbour Club one day in the future. Thank you for listening.
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