Jeremy Harbour
Hi, my name is Jeremy Harbour. I run this training course called the Harbour Club where I teach people how to buy and sell companies. And particularly how to buy and sell companies without using any capital up front or having to borrow money from banks or investors or get the owner of the company to finance the deal, what they sometimes call vendor finance.
Jeremy Harbour
Now lots of people say to me, “How would you buy a company with no money?” And I often facetiously answer, “Well, it’s really easy. You start with no money and then try and buy a company.” You see, necessity really is the mother of invention. So sometimes having your back against the wall and not having money can be an absolute positive advantage when it comes to doing these sorts of deals.
Jeremy Harbour
But if you come on my Harbour Club, I’m going to teach you how to find these opportunities. I’m going to teach you how to hold the meeting with the potential targets so that you get the deal done and everybody gets what they want. Most importantly, I’m going to teach you a whole load of no money down deal structures you can use to get these deals done in a really efficient way.
Jeremy Harbour
And today I’m just going to share one of those. It’s the most simple one because obviously I keep all the really clever stuff for my Harbour Clubbers. But what I’m going to talk about today is called a merger, and you’ve probably heard of mergers. You probably read about them in the newspapers and that kind of thing, but very simply, a merger is an acquisition done using your shares instead of cash. So the idea is that you create a new entity by merging two companies together and each of the parties has shares in the new thing.
Jeremy Harbour
Well, you might think, well, if you put two one million pound companies together, don’t you just have half of a two million pound company. Well, not quite. You see, if you think about it, if you have two businesses in the same sector, you’ll sometimes find they’ve got two offices, that they’ve got two sets of staff, they’ve got two accounts departments, they’ve got two marketing departments, et cetera, et cetera, et cetera.
Jeremy Harbour
When you put them together, you can de-duplicate a lot of that cost, so you can take out one whole set of costs effectively. The advantage of that is really when you put the two together, it’s more like sort of two plus two equals six instead of instead of two plus two equals four. So it really is a very effective way of getting a quick scale.
Jeremy Harbour
Now the other thing that’s interesting is that big businesses are a lot easier to sell. There’s a lot more market for them. So if you wanted to get some quick scale and increase the value of the business, doing a merger just before selling can be a really effective way of doing that. And in fact, you don’t even have to rinse all of the synergies out of that merger straight away. You could put the two entities under one holding company and effectively sell that company as a bigger turnover business leaving all the integration for the buyer.
Jeremy Harbour
This has two advantages to you. Firstly, you de-risk any problems you might have during that integration process and obviously take away a lot of the work, but also you leave some skin in the game for the person that’s buying it. So they will see the advantage that they can buy now at today’s price and they have the opportunity to add a load of value going forwards.
Jeremy Harbour
Or you can have your cake and eat it. So effectively, you sell them based on how the merged businesses look now and you have an earn-out or a performance link to doing the integration going forwards. And that way if the integration works extremely well and it has a big upside, you get some more money from the deal. And if it doesn’t quite work out the way you planned, well you still got the value from the business on day one. So rather than trying to see if you can make it work, you can hedge your bets basically and come out on top.
Jeremy Harbour
So I hope you found that interesting. If you’d like to know more about doing deals with no money down, then do get in touch and I look forward to seeing you on a Harbour Club soon. 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 the sales and marketing-type techniques.
Jeremy Harbour
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. In fact, I went spectacularly bust when I was 19, which is a great a lesson in humility. I think everyone needs a good kick in the nuts when they’re a bit young and cocky. So 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
So basically, I was running businesses like this. I was always a firm believer that if you wanted to be successful, you had to start a business and you had to work really hard, and I did sacrifice everything. I put in the blood, the sweat and the years growing my businesses at the expense of almost everything else in my life, and 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, 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.
Jeremy Harbour
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. So 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.
Jeremy Harbour
So 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. And 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 be anything up from.
Jeremy Harbour
Now fortunately, 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
And sure enough, after a while what happened was instead of me having two or three opportunities to choose from, I ended up with sort of 15 opportunities, and then it made me start to think about everything a little bit differently. And 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
So 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 signposts 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.
Jeremy Harbour
And it didn’t take long before I started to get opportunities to talk to other telecoms companies about the possibility of buying them. And I got a few slaps around the face 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.
Jeremy Harbour
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. I don’t have to run the marathon. I can just do the last 10 yards and I still get the trophy. And 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. Or not wrong, but just not the right way.
Jeremy Harbour
And 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 dragons on Dragons’ Den, bought or sold businesses as the way that they accelerated their success and their wealth.
Jeremy Harbour
So it was almost like … Well, it was a complete paradigm shift. I completely changed the way that I looked at business. And it was around about this time I basically, having had that epiphany, I went on a little bit of a rampage and I ended up buying lots and lots of businesses.
Jeremy Harbour
And in the space of 18 months, I had 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. It 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.
Jeremy Harbour
One of the first things I realized is actually, to learn how to buy a business, you really need to buy a business because it’s an experiential thing. So 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? 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 is 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 core no money down strategies that we work through, which shows shows things like how I was able to buy an air conditioning company for a pound. Where we met them at nine o’clock 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, we’re able to turn that around and sell that on in a very short space of time, and a whole load of other stuff. So a call center business. We bought a gym and spa. It was a health club, 15,000 square foot health club that costs 3.2 million to fit out just a few years before that we were able to buy lock, stock, and barrel. And actually the way the deal was structured, we ended up 25,000 pounds in front after the deal was completed.
Jeremy Harbour
So there’s some really, really interesting techniques that we’ve stuck in there and everything is backed up with real case studies. And 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. So all of the contracts and spreadsheets and questionnaires and things like that I had to do.
Jeremy Harbour
Now, people often ask, “How would you buy a business for 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, and the Harbour Club’s been running very successfully since 2009.
Jeremy Harbour
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. So 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. So you need to 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 them 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 getting a deal done. And then we go into the sort of 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 destroys 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 up front for the business? So 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? So 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.
Jeremy Harbour
We tell you exactly how I bought businesses, how I found them, how we got the deal done, the whole thing. And then if you feel that you want to take everything a step further, you can come on one of my Harbour Club courses, we’d fill in all the gaps in terms of how you do the financial engineering, the seven steps to fixing a company’s cashflow.
Jeremy Harbour
For example, we bought an air conditioning company that hadn’t paid his 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. So that’s one of the case studies that we use in the course.
Jeremy Harbour
So if you’d like to find out more, have a look at it and see how that works, and then maybe I’ll see you in a Harbour Club one day in the future. Thank you for listening.
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