Jeremy Harbour
Hi, my name is Jeremy Harbour. I run an experiential training course called The Harbour Club, where we teach people how to find, buy and sell businesses. Specifically focusing on distressed and motivated sellers, where you can buy the company using no capital up front and without having to borrow money from investors or banks or the vendor themselves.
Jeremy Harbour
So these are really interesting business street fighting tactics for doing deals. Now, quite often people get really stuck when they’ve had the meeting with the prospective company they want to buy, everything seems to be okay, they’ve drawn up a rough set of legal documents, but there’s just analysis paralysis, let’s call it, some procrastination that’s coming from the intended vendor, which you just don’t seem to be able to overcome.
Jeremy Harbour
Well we’ve got a really simple tactic for that and we call it, the no-one leaves until meeting. And all we do is if you’re both more or less on the same page, but there’s a few things that need to be, a few wrinkles that need to be ironed out, you literally make a phone call to them and say, “Okay, I think we’re both almost there, but why don’t we have a meeting, say, this Friday? We’ll make it for 2:00 in the afternoon and no-one’s going to leave until we’ve got a deal done. So we will sit there with our computers, we’ll get the contract in front of us and we’ll kick around all the different points that worry you, all the different points that worry me, until we finally get to a point where we’re ready to do a deal.”
Jeremy Harbour
Now, a great thing happens, and that is basically as soon as they agree to that meeting, basically you’ve got the deal done. Now you might find that you’re sitting in their office and ordering pizza at midnight, but if you do literally stay there until you’ve got the deal done this can be an enormously powerful way of getting everything done. And the whole contract process should be a really collaborative process.
Jeremy Harbour
I use the analogy of dragging your chair to their side of the desk, but it’s not only an analogy, it’s actually quite literally. You can drag your chair to their side of the desk and sit at their computer and draft the heads of terms of agreement that you’re going to enter into with them. So they can put in the clauses that protect them against all the horrible things they think that you’re going to do and you can put the clauses in that protect you from all the horrible things that you think they’re going to do. And by the end of it you have a collaborative agreement that’s been drawn up with both of your collective inputs and so why would anyone not sign that? It just makes it much much easier to get the deal over the line. So that’s my little tip for today is, have a no-one leaves until meeting if you want to get the deal closed.
Jeremy Harbour
If you want to find out a lot more about how to do these kind of deals, then come on The Harbour Club, it’s a great value way of getting into buying and selling distressed companies. I hope to see you soon bye-bye.
Jeremy Harbour
Hi, my name’s Jeremy Harbor. 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.
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 was a great 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 toe 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 into 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. 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 up front. 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 up front.
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. And sure enough, after awhile, what happened was instead of me having two or three opportunities to choose from, I ended up with 15 opportunities and then it made me start to think about everything a little bit differently.
Jeremy Harbour
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. So decided to just go out there and start talking about wanting to find a business.
Jeremy Harbour
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. 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 it’s 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 investor’s 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’d 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, they’d all made their money doing deals. In fact, all of the dragons on Dragon’s Den bought or sold businesses as the way that they accelerated their success and their wealth. So it was almost like … well it was a complete paradigm shift. I completely changed the way that I looked at business.
Jeremy Harbour
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. And in the space of 18 months I had built up a mini empire of businesses turning over about 13 and half million pounds a year on a 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’d 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 you know? 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, continually 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’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 seven or eight all together, but there’s six core 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 P.M. 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. 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. So a call center business.
Jeremy Harbour
We bought a gym and spa, it was a 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. And actually the way the deal was structured, we ended up £25 000 in front after the deal was completed. 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 that we’ve had to do.
Jeremy Harbour
Now, people often ask, “How would 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.
Jeremy Harbour
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. The references and things that people give us for it are always incredibly flattering and very very positive.
Jeremy Harbour
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 turn around 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 a consistent tactic that will get you those people. Now, they’re 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 up front for the business? So we go through all of the systems you need to do that.
Jeremy Harbour
And then how do you reduce all your up front 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. 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 courses where 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. For example, we bought an air conditioning company that hadn’t paid it’s payroll for two months. It was £10 000 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 overdrawn. It’s 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 mean 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, see how that works and then maybe I’ll see on a Harbour Club one day in the future. Thank you for listening.
Speaker 2
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