1 00:00:29,233 --> 00:00:33,223 Hello and welcome to Business Buying Strategies, the number one podcast for 2 00:00:33,223 --> 00:00:37,783 people interested in buying a business without risking any of their own cash. 3 00:00:38,653 --> 00:00:42,703 Now, after a decade of helping deal makers to acquire a business successfully, 4 00:00:42,943 --> 00:00:47,443 there's no one better place than Jonathan Jay to guide you through the process. 5 00:00:48,103 --> 00:00:52,243 And in all that time, he has seen just about every mistake it's possible to make. 6 00:00:52,963 --> 00:00:56,443 So in this episode, he has Jonathan talking us through the rookie 7 00:00:56,443 --> 00:00:58,368 mistakes first time deal makers make. 8 00:00:59,053 --> 00:01:01,513 And how to make sure you avoid them yourself. 9 00:01:05,355 --> 00:01:07,815 the first is you get all your information. 10 00:01:07,880 --> 00:01:11,730 From the internet and I think that anyone who's been on the internet 11 00:01:11,730 --> 00:01:16,917 more than six minutes knows that, so much on the internet just isn't true 12 00:01:16,917 --> 00:01:20,237 fake news as we hear all the time. 13 00:01:20,597 --> 00:01:23,567 Now, the problem with internet information is you don't know 14 00:01:23,567 --> 00:01:25,487 who's giving you the information. 15 00:01:25,647 --> 00:01:28,857 So I see information about business buying from people who've bought 16 00:01:29,457 --> 00:01:31,287 literally one business, one. 17 00:01:31,407 --> 00:01:33,327 There's one guy out there at the moment, one business 18 00:01:33,437 --> 00:01:36,972 . And he bought it three months ago, and now he's teaching other people how to do it. 19 00:01:37,322 --> 00:01:39,452 Uh, that's just the craziest thing. 20 00:01:39,612 --> 00:01:42,282 You've gotta be very cautious and very careful about where 21 00:01:42,282 --> 00:01:43,422 you get your information. 22 00:01:43,632 --> 00:01:46,962 But the other challenge with learning information from the internet is that 23 00:01:46,962 --> 00:01:48,732 there's going to be conflicting advice. 24 00:01:48,732 --> 00:01:50,412 You may have discovered this already. 25 00:01:50,872 --> 00:01:56,372 And the way I my analogy for this conflicting advice is that let's say 26 00:01:56,372 --> 00:02:01,742 you are going to cook a meal and you start with a Gordon Ramsey recipe. 27 00:02:01,742 --> 00:02:04,352 You know, the celebrity chef, you start with a Gordon Ramsey. 28 00:02:04,952 --> 00:02:09,272 Recipe and you do the first few parts, part one, part two, part three, 29 00:02:09,272 --> 00:02:10,712 following the Gordon Ramsay recipe. 30 00:02:11,042 --> 00:02:14,102 But then you get distracted and you realize you've got a Jamie 31 00:02:14,162 --> 00:02:18,362 Oliver Cookbook with the same type of meal in the Jamie Oliver. 32 00:02:18,362 --> 00:02:20,372 So you forget Gordon Ramsay. 33 00:02:20,522 --> 00:02:23,942 You move over to the Jamie Oliver Cookbook and do the next part 34 00:02:23,942 --> 00:02:28,712 of the recipe following the Jamie Oliver approach right now. 35 00:02:28,802 --> 00:02:32,282 Even if we just stopped there and we didn't go to some other celebrity chefs. 36 00:02:32,612 --> 00:02:34,502 And we just mixed up two approaches. 37 00:02:34,742 --> 00:02:37,802 Do you think that's gonna come out as a good meal? 38 00:02:38,102 --> 00:02:39,092 Probably not. 39 00:02:39,512 --> 00:02:43,442 And that is the challenge when you get your information from the internet. 40 00:02:43,472 --> 00:02:48,092 It's a video here, a podcast there, a blog there, and it's this mishmash 41 00:02:48,482 --> 00:02:51,392 of of information what you need. 42 00:02:51,722 --> 00:02:53,072 Is a linear process. 43 00:02:53,252 --> 00:02:55,472 You need a step-by-step system. 44 00:02:55,742 --> 00:02:57,902 Uh, and those of you who know me from other webinars, you know 45 00:02:57,902 --> 00:03:00,422 that I teach a 21 step system. 46 00:03:00,632 --> 00:03:03,992 Uh, and this is where you don't have to go out and piece it all together by yourself 47 00:03:04,112 --> 00:03:06,422 because that's, to be fair, is hard work. 48 00:03:06,602 --> 00:03:09,032 As long as hard work that doesn't really work. 49 00:03:09,312 --> 00:03:12,492 But when you've got a linear system, you start here, you go 50 00:03:12,492 --> 00:03:13,902 here, you do this, you do this. 51 00:03:14,112 --> 00:03:15,252 Then it clears up. 52 00:03:15,767 --> 00:03:17,417 All that misinformation. 53 00:03:17,537 --> 00:03:21,677 So the internet is a great way of getting inspiration. 54 00:03:21,857 --> 00:03:25,577 It's certainly not a great way of having a business buying system. 55 00:03:26,922 --> 00:03:31,042 Now, some of you have been around me for a while have, uh, believed 56 00:03:31,042 --> 00:03:36,922 that the only way to generate deal flow is to send out letters. 57 00:03:37,312 --> 00:03:42,322 And I meet people at my public events who tell me that they've sent out letters. 58 00:03:42,322 --> 00:03:43,372 And I said, how did that go? 59 00:03:43,372 --> 00:03:44,332 And they said, well, not well. 60 00:03:44,332 --> 00:03:45,837 I said, well, I guess that's why you're here, right? 61 00:03:46,342 --> 00:03:50,482 And they say, yeah, that's exactly why I wanna spend a couple of days 62 00:03:50,482 --> 00:03:53,002 with you, or three days with you, or whatever it is, because I tried to 63 00:03:53,002 --> 00:03:54,322 do it by myself and it didn't work. 64 00:03:55,057 --> 00:03:57,547 Now sending letters was brilliant five years ago. 65 00:03:58,207 --> 00:04:01,477 Uh, now we can combine it with other methods. 66 00:04:01,477 --> 00:04:06,277 In fact, I teach people seven different ways of of finding businesses to buy. 67 00:04:06,397 --> 00:04:09,667 And, uh, six of those don't cost, uh, anything whatsoever. 68 00:04:09,937 --> 00:04:13,537 But if you've tried sending letters, please would you stop? 69 00:04:13,727 --> 00:04:14,957 And I tell you the reason why. 70 00:04:15,647 --> 00:04:18,107 It's not only you're probably sending the wrong letter to the 71 00:04:18,107 --> 00:04:19,517 wrong people in the wrong way. 72 00:04:20,147 --> 00:04:20,357 That's. 73 00:04:21,272 --> 00:04:26,822 Quite an important part of it, but if you don't know what to do in terms of 74 00:04:26,822 --> 00:04:32,162 actually getting the deal done, then you are raising the hopes of sellers who 75 00:04:32,162 --> 00:04:36,382 are then going to be disappointed that you were just kind of dabbling at it a 76 00:04:36,382 --> 00:04:38,722 little bit and just seeing what happened. 77 00:04:38,942 --> 00:04:40,922 But you don't know how to get a deal done. 78 00:04:41,162 --> 00:04:44,852 There is a big difference between deal sourcing and getting deals done. 79 00:04:45,092 --> 00:04:48,212 Now I'm on LinkedIn and I look at LinkedIn every day. 80 00:04:48,812 --> 00:04:49,862 Uh, maybe I'm connected. 81 00:04:49,862 --> 00:04:52,472 If I'm not connected with you on LinkedIn, send, find me on LinkedIn, 82 00:04:52,502 --> 00:04:53,672 send me a connection request. 83 00:04:53,792 --> 00:04:55,832 And I post most days as well, by the way. 84 00:04:56,312 --> 00:05:00,212 But I see a lot of people talking about deal sourcing. 85 00:05:00,302 --> 00:05:01,862 They're all talking about deal sourcing. 86 00:05:03,032 --> 00:05:04,892 Deal sourcing is the easy part. 87 00:05:05,132 --> 00:05:07,442 Doing the deal is the hard part, right? 88 00:05:07,907 --> 00:05:08,937 It, it's, I don't know. 89 00:05:08,937 --> 00:05:09,382 What's it like? 90 00:05:09,412 --> 00:05:10,532 It's like climbing a mountain. 91 00:05:11,537 --> 00:05:14,177 And saying, oh, we're gonna do the first couple of steps, right? 92 00:05:14,177 --> 00:05:17,742 But the first couple of steps they're easy is it's when you've done the, 93 00:05:17,792 --> 00:05:20,492 the a thousand steps, it starts to get a little bit more difficult. 94 00:05:20,792 --> 00:05:24,002 The deal flow bit, the easy part is what everyone talks about, 95 00:05:24,362 --> 00:05:26,012 but not many people get past. 96 00:05:26,042 --> 00:05:28,412 It is just the tip of the iceberg. 97 00:05:28,412 --> 00:05:32,012 So please, if you're sending letters, stop, do it properly. 98 00:05:32,702 --> 00:05:35,492 Now the third mistake that people make is they dunno how to value 99 00:05:35,492 --> 00:05:38,972 the business as a result of not knowing how to value and hope. 100 00:05:38,972 --> 00:05:41,702 You're writing these things down, by the way, as a result of not knowing how to 101 00:05:41,702 --> 00:05:47,582 value the business, they overpay for the business and potentially over-leverage. 102 00:05:47,582 --> 00:05:50,582 Lemme tell you why those two mistakes are real bad ones. 103 00:05:50,952 --> 00:05:56,202 First of all, when you overpay, you are always going to be playing catch up. 104 00:05:56,382 --> 00:05:59,472 You've paid too much and I saw someone recently not. 105 00:05:59,907 --> 00:06:03,927 Someone on Mastermind, someone I haven't worked with, but he was telling me about 106 00:06:03,927 --> 00:06:06,807 this because I do some public events and people come up and they talk to 107 00:06:06,807 --> 00:06:10,047 me about things that they've, they've done typically that haven't worked. 108 00:06:11,157 --> 00:06:17,577 And they, and he said that he ended up realizing that he'd paid six times 109 00:06:17,787 --> 00:06:22,107 the profit of something for a business that really was only worth two, two and 110 00:06:22,107 --> 00:06:24,027 a half, maybe at a pinch three times. 111 00:06:24,417 --> 00:06:25,917 So I said, why didn't you know? 112 00:06:25,917 --> 00:06:27,557 He said and this is one of my points later. 113 00:06:27,557 --> 00:06:31,127 It is partly the due diligence, but I just didn't understand. 114 00:06:31,427 --> 00:06:33,257 How to value the business. 115 00:06:33,407 --> 00:06:36,677 The other challenge, which is point number two, was the overleveraging. 116 00:06:36,932 --> 00:06:41,357 Overleveraging is where you borrow too much money to buy the business, 117 00:06:41,537 --> 00:06:45,317 and as a result, all you are doing is paying back the bank or the lender. 118 00:06:45,767 --> 00:06:47,537 You're not making any money yourself. 119 00:06:47,747 --> 00:06:52,037 You get a dip in trading, you can't pay back the lender and 120 00:06:52,037 --> 00:06:53,327 the business ends up folding. 121 00:06:54,107 --> 00:06:56,657 So this valuation piece is really, really important. 122 00:06:56,657 --> 00:06:57,407 And we could spend. 123 00:06:58,082 --> 00:07:03,572 An entire day, an entire weekend talking about how to value a business. 124 00:07:03,722 --> 00:07:06,602 Because if you don't get this bit right, nothing else matters. 125 00:07:06,692 --> 00:07:09,542 And I've seen new business buyers skimp over that and say, 126 00:07:09,542 --> 00:07:10,592 I'll worry about that later. 127 00:07:10,772 --> 00:07:12,062 No, you need to worry about it now. 128 00:07:13,112 --> 00:07:19,352 Now, number four is you believe what you read about distress businesses. 129 00:07:19,502 --> 00:07:23,192 Let me tell you what you might read about when it comes to distress businesses. 130 00:07:23,502 --> 00:07:25,512 You buy the business for nothing, for a pound. 131 00:07:27,687 --> 00:07:30,267 And you don't do any due diligence. 132 00:07:30,267 --> 00:07:31,382 This is, this is the advice. 133 00:07:31,417 --> 00:07:32,527 This is not from me, by the way. 134 00:07:32,527 --> 00:07:33,877 This is advice out there. 135 00:07:34,447 --> 00:07:36,637 You don't do any due diligence because who cares? 136 00:07:36,637 --> 00:07:37,567 You've only bought it for a pound. 137 00:07:37,567 --> 00:07:38,707 Your risk is a pound. 138 00:07:39,517 --> 00:07:42,577 You then do financial engineering. 139 00:07:43,057 --> 00:07:46,517 Sounds a bit dodgy to me, but to make the business profitable, and then 140 00:07:46,517 --> 00:07:48,197 one day you sell it for a fortune. 141 00:07:49,547 --> 00:07:50,717 If only it was that easy. 142 00:07:51,467 --> 00:07:54,077 Oh my goodness, we'd all be doing it right now. 143 00:07:54,257 --> 00:07:59,417 The thing is, you might not pay any money for the business, but you will 144 00:07:59,417 --> 00:08:04,637 pay in time, stress, sleepless nights. 145 00:08:04,877 --> 00:08:08,447 And the chances are you have to put money in to rescue the business. 146 00:08:08,447 --> 00:08:12,077 Unless you've got spare cash, which you're prepared to risk, it's not gonna work. 147 00:08:12,227 --> 00:08:16,757 And by the way, no lender will ever lend on a business that's distressed. 148 00:08:18,467 --> 00:08:21,047 Why would they lend to a business with the chances of getting 149 00:08:21,047 --> 00:08:22,817 their money back are very low. 150 00:08:22,937 --> 00:08:23,477 Indeed. 151 00:08:23,897 --> 00:08:25,247 Now I've got an alternative for you. 152 00:08:25,247 --> 00:08:27,437 I'm not gonna give you problems here and I give you solutions. 153 00:08:27,767 --> 00:08:30,827 The alternative is you buy businesses that make money. 154 00:08:31,457 --> 00:08:31,757 I know. 155 00:08:31,757 --> 00:08:34,847 So it is a earth shattering revelation. 156 00:08:35,087 --> 00:08:36,677 But buy a business that makes money. 157 00:08:36,827 --> 00:08:39,167 'cause isn't that why you are doing it? 158 00:08:39,407 --> 00:08:40,667 You are not buying a business. 159 00:08:41,402 --> 00:08:46,352 To be a hero and to prove that the old owner, the previous owner, didn't 160 00:08:46,352 --> 00:08:49,502 know what they're doing and you are far cleverer than them, which 161 00:08:49,502 --> 00:08:52,942 is, the message buying distress businesses and turning them around. 162 00:08:52,942 --> 00:08:54,052 That's really what the message is. 163 00:08:54,412 --> 00:08:57,862 I don't want you to feel, you have to be a genius at business. 164 00:08:58,807 --> 00:09:02,617 Just be someone who buys a business that makes money the day before 165 00:09:02,617 --> 00:09:08,197 you buy it so that it makes money the day after you buy it. 166 00:09:08,367 --> 00:09:10,197 It really is as simple as that. 167 00:09:10,347 --> 00:09:12,417 Please ignore distress businesses. 168 00:09:12,657 --> 00:09:17,597 So one of my deal club evenings in London on Tuesday, I was 169 00:09:17,597 --> 00:09:19,242 talking to, uh, two guys. 170 00:09:19,742 --> 00:09:25,532 Who have bought 11 businesses between them, which is absolutely magnificent. 171 00:09:25,772 --> 00:09:29,087 And I was having this exact conversation with them and they said, oh yeah. 172 00:09:29,697 --> 00:09:31,287 We got our fingers burnt on this. 173 00:09:31,767 --> 00:09:37,587 If you want to have a painful experience in business buying, if you 174 00:09:37,587 --> 00:09:41,907 wanna have a painful experience, buy businesses that are distressed, that 175 00:09:41,907 --> 00:09:47,337 don't make any money, rather than buying businesses that make money. 176 00:09:47,337 --> 00:09:48,957 I can see some of you sending me questions. 177 00:09:49,167 --> 00:09:50,427 I'll get to those later on. 178 00:09:50,547 --> 00:09:51,027 Okay. 179 00:09:51,987 --> 00:09:54,987 Uh, number five is you don't have any credibility with the seller. 180 00:09:56,307 --> 00:09:58,617 You don't have any credibility with the seller whatsoever. 181 00:09:58,677 --> 00:10:00,087 You've never bought a business before. 182 00:10:00,117 --> 00:10:01,557 You've got no background in business. 183 00:10:01,617 --> 00:10:04,137 You don't own a business, you've got no business experience. 184 00:10:04,257 --> 00:10:06,117 Why is someone gonna sell their business to you? 185 00:10:06,777 --> 00:10:08,067 It's a really good question. 186 00:10:09,147 --> 00:10:13,527 Interestingly, if you know how to deal with it and you know how to, what we call 187 00:10:13,737 --> 00:10:20,037 position yourself prior to interacting with the owner, that is not a problem. 188 00:10:20,277 --> 00:10:24,387 It comes down to what you say and the way you say it. 189 00:10:25,027 --> 00:10:30,587 What we found very helpful is to have what we call a credibility website, which 190 00:10:30,767 --> 00:10:35,057 the seller sees before they contact you. 191 00:10:35,357 --> 00:10:38,177 So by the time they contact you, they know who you are. 192 00:10:38,967 --> 00:10:42,657 They clearly like what you are saying and what you are about. 193 00:10:42,957 --> 00:10:46,077 Otherwise they wouldn't contact you and you don't have any of those 194 00:10:46,077 --> 00:10:48,177 awkward questions around, what's your. 195 00:10:49,047 --> 00:10:51,617 Business history and you know, what's your experience and 196 00:10:51,617 --> 00:10:53,027 uh, and those sorts of things. 197 00:10:53,327 --> 00:10:58,847 Now, what the credibility website also does is that it gets over that 198 00:10:58,847 --> 00:11:03,887 hurdle of, to put it in its bluntest terms, how much money do you have? 199 00:11:04,617 --> 00:11:05,697 Which is what sellers are. 200 00:11:06,537 --> 00:11:10,407 Sellers are curious as to whether you can pull this deal off. 201 00:11:10,737 --> 00:11:12,892 Can you, have you either got the cash or can you get the funding? 202 00:11:13,917 --> 00:11:16,857 Yeah, they don't mind whether it's cash or funding, because as long as 203 00:11:16,857 --> 00:11:19,227 they get what they want, they're happy. 204 00:11:19,767 --> 00:11:23,877 But this credibility issue is prevalent with brand new buyers 205 00:11:23,877 --> 00:11:25,227 who've never bought a business before. 206 00:11:25,407 --> 00:11:29,637 But I can tell you that it's never stopped any of my Mastermind clients because we 207 00:11:29,637 --> 00:11:33,807 have a way of dealing with this, partly the credibility website, but partly what 208 00:11:33,807 --> 00:11:36,867 you're saying and what you are doing. 209 00:12:13,244 --> 00:12:18,104 Now a big mistake that I see new business buyers make that's very, very expensive, 210 00:12:18,344 --> 00:12:21,764 uh, is you make it up as you go along just by watching another YouTube video. 211 00:12:22,284 --> 00:12:24,954 This is like learning how to fly a plane. 212 00:12:26,184 --> 00:12:32,484 By watching YouTube would, would you go up in a light aircraft after watching 213 00:12:32,484 --> 00:12:34,764 some YouTube videos on how to fly? 214 00:12:35,184 --> 00:12:36,684 Let me ask that question a different way. 215 00:12:37,104 --> 00:12:42,834 Would you want to be the passenger in that light aircraft with a pilot 216 00:12:43,014 --> 00:12:44,964 who's just watched some YouTube videos? 217 00:12:45,174 --> 00:12:46,194 Of course you wouldn't. 218 00:12:46,194 --> 00:12:47,124 It's dangerous. 219 00:12:47,274 --> 00:12:48,444 You're gonna get yourself killed. 220 00:12:49,134 --> 00:12:52,404 That's exactly the same as using YouTube. 221 00:12:52,764 --> 00:12:55,824 Remember with all that conflicting advice as your guide. 222 00:12:56,004 --> 00:12:59,124 Now, I appreciate so many of you were saying before we got started 223 00:12:59,244 --> 00:13:00,324 that you watch me on YouTube. 224 00:13:00,474 --> 00:13:01,524 That's brilliant. 225 00:13:01,734 --> 00:13:02,634 I thank you for that. 226 00:13:03,354 --> 00:13:05,454 YouTube is like my modern. 227 00:13:06,234 --> 00:13:07,704 Day business card. 228 00:13:07,914 --> 00:13:10,164 It's my way of saying, Hey, this is me. 229 00:13:10,284 --> 00:13:13,434 This is what I do, and if I can help you get in touch. 230 00:13:13,434 --> 00:13:15,684 So it's the modern version of a business card. 231 00:13:16,284 --> 00:13:20,364 The stuff that I put on YouTube, you will notice if you watch enough videos, 232 00:13:20,364 --> 00:13:22,824 starts to feel quite samey, right? 233 00:13:22,824 --> 00:13:24,924 You're starting to hear the same message again and again and again. 234 00:13:25,314 --> 00:13:29,394 Because I'm not giving you the good stuff, I'm only giving you the tip of the iceberg 235 00:13:29,394 --> 00:13:31,664 stuff, the good stuff, you know, to. 236 00:13:32,229 --> 00:13:34,149 Put it bluntly is what people pay for. 237 00:13:34,299 --> 00:13:38,889 And I'm not gonna put what people pay for onto YouTube because it wouldn't 238 00:13:38,889 --> 00:13:41,649 be fair on the people who pays for it. 239 00:13:41,919 --> 00:13:45,699 So please do not use YouTube as your mentor. 240 00:13:45,909 --> 00:13:49,119 YouTube is not a mentor. 241 00:13:49,802 --> 00:13:53,372 Now the next very important point is you dunno how to avoid personal guarantees. 242 00:13:54,542 --> 00:13:56,132 Let me tell you what a personal guarantee is. 243 00:13:56,522 --> 00:14:00,602 A personal guarantee is if the company doesn't pay, you are going to pay. 244 00:14:01,352 --> 00:14:06,302 So let's say you borrowed money from a lender and you sign a personal guarantee, 245 00:14:06,572 --> 00:14:10,982 something happens to the business, the business can't pay, misses a payment. 246 00:14:11,747 --> 00:14:15,657 Or the business closes, then the lender will come after you. 247 00:14:15,957 --> 00:14:18,447 Now, if you don't have the cash to be able to write the check and say, 248 00:14:18,447 --> 00:14:22,287 here's your money, then they can actually start bankruptcy proceedings 249 00:14:22,287 --> 00:14:26,217 to take possession of your assets, which might well include your house. 250 00:14:26,922 --> 00:14:30,672 Okay, so that is the downside of a personal guarantee, and there's 251 00:14:30,672 --> 00:14:32,832 typically two or three things that are personally guaranteed. 252 00:14:33,132 --> 00:14:35,952 A lender might ask you for personal guarantees and the 253 00:14:35,952 --> 00:14:40,212 seller might ask you for personal guarantees if there is a deferred. 254 00:14:40,647 --> 00:14:41,097 Element. 255 00:14:41,487 --> 00:14:46,947 You've got to know how to do this without personal guarantees, and if there is 256 00:14:46,947 --> 00:14:52,137 a personal guarantee to limit your exposure to the smallest amount possible 257 00:14:52,257 --> 00:14:57,727 to make it comfortable for you so that you don't have a big problem later on. 258 00:14:57,817 --> 00:14:59,317 Look, no one knows what's around the corner. 259 00:14:59,317 --> 00:15:02,827 I mean, no one knew that COVID was around the corner, right? 260 00:15:02,827 --> 00:15:03,097 No. 261 00:15:03,097 --> 00:15:06,097 No one knew that it was gonna be a pandemic that closed 262 00:15:06,097 --> 00:15:08,077 businesses all around the world. 263 00:15:08,782 --> 00:15:13,852 Now you can't predict the future, so you can be very, very confident 264 00:15:13,852 --> 00:15:15,082 about a business right now. 265 00:15:15,142 --> 00:15:19,372 In six months time, it might be something that turns into a problem. 266 00:15:19,522 --> 00:15:22,342 Now that's just life, and we want to avoid that. 267 00:15:22,342 --> 00:15:25,912 We wanna buy the right businesses in the right way to avoid that situation, 268 00:15:26,092 --> 00:15:30,172 what you don't wanna do is compound the problem with a personal guarantee. 269 00:15:30,727 --> 00:15:34,692 I've got some lovely phrases and you know, I, I can I looked at the attendees 270 00:15:34,692 --> 00:15:37,542 list and I can see quite a few of my mastermind clients are on here today. 271 00:15:37,692 --> 00:15:42,042 You will know that I've got these beautiful phrases and techniques for 272 00:15:42,042 --> 00:15:45,462 avoiding the personal guarantees, but you've got to do this if you 273 00:15:45,462 --> 00:15:46,692 go and sign personal guarantees. 274 00:15:46,722 --> 00:15:47,772 I met someone recently. 275 00:15:48,127 --> 00:15:49,117 At our public. 276 00:15:49,372 --> 00:15:52,072 Deal club event in Manchester on Monday night. 277 00:15:52,402 --> 00:15:55,342 Who, who told me about a 300,000 pound personal guarantee. 278 00:15:55,712 --> 00:15:57,302 And I said, if only you'd been with me earlier. 279 00:15:57,962 --> 00:15:59,552 If only you'd been with me earlier, I'd have shown you how 280 00:15:59,552 --> 00:16:01,682 to, uh, how to avoid this now. 281 00:16:02,342 --> 00:16:04,862 Um, actually at one of those deal club events, the one in Manchester 282 00:16:04,862 --> 00:16:09,607 on Monday uh, someone said, Jonathan you teach people how to buy business 283 00:16:09,607 --> 00:16:11,407 without using any of your own cash. 284 00:16:11,767 --> 00:16:12,847 That's brilliant. 285 00:16:13,267 --> 00:16:15,317 But I can't find a lawyer. 286 00:16:15,707 --> 00:16:16,907 Who will let me pay later? 287 00:16:16,907 --> 00:16:18,857 I said, so where did you get these lawyers from? 288 00:16:18,857 --> 00:16:19,847 Where did you speak to these people? 289 00:16:19,847 --> 00:16:20,597 He said, Google. 290 00:16:20,597 --> 00:16:21,017 I Googled. 291 00:16:21,557 --> 00:16:24,557 Mergers and acquisitions lawyers, I said, well, it makes sense that you 292 00:16:24,557 --> 00:16:28,847 would do it, but do you think it makes sense to the lawyer that a complete 293 00:16:28,847 --> 00:16:31,877 stranger phones them up and says, I'm buying a business, but I don't wanna 294 00:16:31,877 --> 00:16:34,457 pay you until I've done the deal? 295 00:16:34,487 --> 00:16:35,447 That doesn't make any sense. 296 00:16:35,447 --> 00:16:37,847 I said, you are absolutely right if you do it that way. 297 00:16:37,847 --> 00:16:42,857 If you find your lawyer on Google, you will not get that 298 00:16:42,857 --> 00:16:44,717 deferred deal on the fees. 299 00:16:44,777 --> 00:16:45,827 He said, well, how do you do it? 300 00:16:45,887 --> 00:16:48,767 I said, because if I introduce you to a lawyer. 301 00:16:49,232 --> 00:16:53,072 It is gonna be someone who knows that, number one, you've invested 302 00:16:53,072 --> 00:16:54,482 in your education with me. 303 00:16:54,572 --> 00:16:55,712 So you are serious. 304 00:16:55,832 --> 00:16:59,882 You are not just a random person off the internet, okay? 305 00:17:00,182 --> 00:17:02,102 You know, a random person calling their office. 306 00:17:02,342 --> 00:17:09,072 Uh, and secondly, uh, they are prepared to defer their fees because that 307 00:17:09,072 --> 00:17:10,602 is the deal that I have with them. 308 00:17:10,782 --> 00:17:15,612 So you are leveraging my contact and my relationship with 309 00:17:15,612 --> 00:17:17,922 that lawyer to your benefit. 310 00:17:18,042 --> 00:17:22,512 Now, someone very smartly at that event then said, well, what happens 311 00:17:22,512 --> 00:17:25,992 if the deal doesn't complete, the lawyer effectively doesn't get paid? 312 00:17:25,992 --> 00:17:27,432 I say, yeah, but look at it like this. 313 00:17:27,732 --> 00:17:32,682 One of the lawyers that I introduced my mastermind clients to has over the last. 314 00:17:32,742 --> 00:17:34,092 A couple of years. 315 00:17:34,092 --> 00:17:37,062 This is just one of, I, I have, I have three different law firms that 316 00:17:37,062 --> 00:17:40,302 I introduced people to, but there's one particular has done 200 deals. 317 00:17:40,842 --> 00:17:44,412 Now outta those 200 deals, there would've been another five or six that 318 00:17:44,412 --> 00:17:48,402 didn't complete, that they didn't get paid on, but they got paid on 200. 319 00:17:48,522 --> 00:17:50,832 So they make, it's a little like an insurance company, you know? 320 00:17:51,336 --> 00:17:54,446 They pay out on claims, but there's lots of, um, insurance being 321 00:17:54,446 --> 00:17:56,036 paid where there are no claims. 322 00:17:56,276 --> 00:17:57,926 So it is the same sort of thing here. 323 00:17:58,076 --> 00:18:00,986 So they are willing to mitigate or risk that fact that 324 00:18:00,986 --> 00:18:02,246 sometimes people don't pay them. 325 00:18:02,426 --> 00:18:05,156 But this is only because they're my team, they're my deal team. 326 00:18:05,786 --> 00:18:08,656 So utilizing my deal team gets you over that problem. 327 00:18:09,751 --> 00:18:13,561 Now here is something that does irritate me, and I did wonder whether I was 328 00:18:13,561 --> 00:18:17,881 gonna call this webinar Jonathan's rant because this one makes me annoyed. 329 00:18:18,181 --> 00:18:21,061 I meet people who want to make hundreds of thousands a year. 330 00:18:21,061 --> 00:18:23,791 Sometimes people say, I wanna make millions a year from business acquisition. 331 00:18:24,001 --> 00:18:26,251 I say, okay, you need to put your money where your mouth is. 332 00:18:26,251 --> 00:18:30,091 If you're gonna do that, then you need to invest in doing it properly and they 333 00:18:30,091 --> 00:18:31,981 won't spend 10 K. 10 Ks are sort of. 334 00:18:32,231 --> 00:18:35,446 A, a gold mastermind level but they won't spend 10 K on getting it right. 335 00:18:35,446 --> 00:18:35,926 So hang on, hang on. 336 00:18:35,926 --> 00:18:36,946 Lemme just get this right. 337 00:18:37,246 --> 00:18:38,416 So you want to make how much? 338 00:18:38,446 --> 00:18:39,976 Oh, at least half a million a year, right? 339 00:18:40,246 --> 00:18:41,986 You wanna make half a million a year, but you're not willing 340 00:18:41,986 --> 00:18:44,356 to spend 10 k on getting it. 341 00:18:44,971 --> 00:18:45,151 Okay. 342 00:18:45,201 --> 00:18:48,681 That's like saying I want to win the marathon, but I'm not prepared to put the 343 00:18:48,681 --> 00:18:53,871 effort and the time and some cost into training and eating properly and getting 344 00:18:53,871 --> 00:18:56,031 the personal trainer to get it right. 345 00:18:56,391 --> 00:18:58,401 It does not make any sense to me. 346 00:18:58,711 --> 00:19:00,391 I could talk about this for a long time. 347 00:19:00,631 --> 00:19:01,561 You'll be very pleased to know. 348 00:19:01,561 --> 00:19:05,041 I'm not gonna talk about it for a long time, but I just think that 349 00:19:05,041 --> 00:19:08,431 sometimes people have gotta get their head on straight with this. 350 00:19:08,731 --> 00:19:10,621 If you want the big reward. 351 00:19:11,296 --> 00:19:16,306 Don't expect everyone to give you all the knowledge and the skills for nothing. 352 00:19:16,306 --> 00:19:17,506 It doesn't work that way. 353 00:19:18,136 --> 00:19:22,516 Now, what some people do when they're new to buying a business is that 354 00:19:22,516 --> 00:19:24,166 they skimp on the due diligence. 355 00:19:24,526 --> 00:19:26,206 They think they don't need due diligence. 356 00:19:26,206 --> 00:19:26,746 They can just buy. 357 00:19:26,806 --> 00:19:29,116 I mean, there is one person on the internet who actually tells 358 00:19:29,116 --> 00:19:30,586 people not to do due diligence. 359 00:19:30,586 --> 00:19:31,366 Can you believe that? 360 00:19:31,366 --> 00:19:35,031 I mean, , if you're gonna give people one bad piece of advice, that's the winner. 361 00:19:35,181 --> 00:19:35,691 Okay? 362 00:19:36,441 --> 00:19:41,121 If you cut corners on due diligence, you will buy businesses that 363 00:19:41,121 --> 00:19:43,281 will come back to bite you, okay? 364 00:19:43,521 --> 00:19:45,111 You cannot skimp on due diligence. 365 00:19:45,141 --> 00:19:46,371 Three types of due diligence. 366 00:19:46,731 --> 00:19:49,911 F-D-D-C-D-D-L-D-D, financial due diligence. 367 00:19:49,911 --> 00:19:52,371 Commercial due diligence, legal due diligence. 368 00:19:52,431 --> 00:19:52,821 Alright? 369 00:19:54,321 --> 00:19:56,241 You've gotta get each of those right. 370 00:19:56,796 --> 00:20:01,566 And the conclusion of the due diligence will actually help 371 00:20:01,566 --> 00:20:03,366 you negotiate a better deal. 372 00:20:03,606 --> 00:20:07,566 The chances of what you sign in heads of terms, and the actual 373 00:20:07,566 --> 00:20:10,806 completed sale and purchase agreement being the same are quite slim. 374 00:20:11,136 --> 00:20:16,776 The due diligence gives you the negotiating power to improve the 375 00:20:16,776 --> 00:20:21,486 price and terms in your favor, so you do the due diligence to make sure 376 00:20:21,486 --> 00:20:22,381 you're not buying something awful. 377 00:20:23,001 --> 00:20:26,841 But you also use it as a negotiating tool, so don't skimp on due diligence. 378 00:20:28,071 --> 00:20:32,331 The next thing, which, um, no one talks about this, everyone 379 00:20:32,331 --> 00:20:33,621 talks about buying businesses. 380 00:20:33,621 --> 00:20:34,881 I mean, it's like the new rock and roll. 381 00:20:34,971 --> 00:20:37,251 By the way, 2026 is the 10th year. 382 00:20:38,886 --> 00:20:45,546 I've been running groups for business buyers 10 years since 20 16, 10 years, and 383 00:20:45,546 --> 00:20:49,796 uh, I've worked with hundreds and hundreds of people to help them buy businesses. 384 00:20:49,796 --> 00:20:53,756 We've got over a thousand case studies and testimonials. 385 00:20:54,026 --> 00:20:59,516 But here's one thing that the gurus on Instagram in front of their Lamborghinis 386 00:20:59,516 --> 00:21:04,046 and fast cars, they don't tell you buying a business is the easy part. 387 00:21:04,946 --> 00:21:08,456 The harder part, integrating it with another business and that 388 00:21:08,456 --> 00:21:10,346 first 100 days of ownership. 389 00:21:10,856 --> 00:21:13,856 Now, when I work with people, I teach 'em how to buy a business. 390 00:21:13,856 --> 00:21:17,606 Of course I do, but I also teach them what to do after they bought the 391 00:21:17,606 --> 00:21:21,296 business, what to do to buy business number two, how to put business 392 00:21:21,296 --> 00:21:22,826 number one and number two together. 393 00:21:22,856 --> 00:21:27,416 They're number three, number four, number five, and then sell the group. 394 00:21:27,686 --> 00:21:31,886 The buying the business is the easy part, and then there are people who 395 00:21:31,886 --> 00:21:33,386 believe they can do it all by themselves. 396 00:21:33,971 --> 00:21:35,351 Oh my goodness. 397 00:21:35,531 --> 00:21:36,851 They say, oh, I don't need any help. 398 00:21:36,851 --> 00:21:37,871 I can do it all by myself. 399 00:21:37,871 --> 00:21:39,311 Jonathan, thank you very much. 400 00:21:39,491 --> 00:21:42,191 I've enjoyed your free webinar, but I can do it all by myself. 401 00:21:42,521 --> 00:21:47,501 I have never, ever seen anyone do it successfully by themselves. 402 00:21:47,561 --> 00:21:51,371 Now I've seen people mess it up by themselves. 403 00:21:51,611 --> 00:21:54,221 Um, someone message me on LinkedIn. 404 00:21:55,436 --> 00:21:58,826 I recognized his name because it was quite an unusual name. 405 00:21:58,826 --> 00:22:00,086 Quite a memorable name. 406 00:22:00,836 --> 00:22:02,276 And he said, hi, Jonathan, how are you? 407 00:22:02,276 --> 00:22:03,536 And I said, I remember you. 408 00:22:03,536 --> 00:22:08,786 I met you at one of my live training events a couple of years ago. 409 00:22:08,936 --> 00:22:10,166 And he said, yep, that's right. 410 00:22:10,166 --> 00:22:10,646 How do you remember? 411 00:22:10,646 --> 00:22:14,096 I said, well, I recognize your name, how's it going? 412 00:22:14,666 --> 00:22:18,246 And he said I went out, I believed that I didn't need your help 413 00:22:18,246 --> 00:22:19,746 and I could do it all by myself. 414 00:22:20,136 --> 00:22:23,436 And I. Found a business owner who wants to sell. 415 00:22:23,676 --> 00:22:25,746 I got some bank funding and I did the deal. 416 00:22:25,746 --> 00:22:27,096 I said well done. 417 00:22:27,966 --> 00:22:29,736 And he said, yeah, well, maybe not so much. 418 00:22:29,796 --> 00:22:30,636 Well done. 419 00:22:31,086 --> 00:22:32,436 It was badly done. 420 00:22:32,786 --> 00:22:33,446 It all went wrong. 421 00:22:33,446 --> 00:22:34,226 I over-leveraged. 422 00:22:34,226 --> 00:22:36,506 Remember one of the mistakes from earlier, I borrowed too much. 423 00:22:36,686 --> 00:22:38,486 I didn't do proper due diligence. 424 00:22:38,646 --> 00:22:40,356 I tried to do it all by myself. 425 00:22:40,566 --> 00:22:44,416 And as a result, I I'm losing my house. 426 00:22:45,581 --> 00:22:47,071 And I said, well, how are you losing your house? 427 00:22:47,071 --> 00:22:49,561 And he said, I signed personal guarantees and I didn't really 428 00:22:49,561 --> 00:22:50,881 understand what I was signing. 429 00:22:51,061 --> 00:22:54,331 Uh, but I always thought it was gonna be okay anyway, and I lost everything. 430 00:22:55,351 --> 00:22:57,001 And yeah, you don't wanna rub it in. 431 00:22:57,061 --> 00:22:59,971 Uh, he was actually asking me if I could help him, and I, I put him in touch 432 00:22:59,971 --> 00:23:04,021 with someone that I think could help him a little bit too late probably. 433 00:23:04,831 --> 00:23:10,951 But if you think you can do it all by yourself, you are taking a shortcut. 434 00:23:11,041 --> 00:23:11,881 I'll give you an example. 435 00:23:12,631 --> 00:23:17,221 At my deal club event on Tuesday night in London, I had a young youngish guy 436 00:23:17,671 --> 00:23:19,951 sitting on the aisle, halfway down. 437 00:23:20,401 --> 00:23:23,251 And, uh, he said, I'm in the process of buying a business 438 00:23:23,571 --> 00:23:24,861 domiciliary care business. 439 00:23:25,051 --> 00:23:27,841 And I said, who's doing your financial due diligence? 440 00:23:28,081 --> 00:23:29,161 And he said, I'm doing it myself. 441 00:23:29,161 --> 00:23:30,151 I said, are you an accountant? 442 00:23:30,151 --> 00:23:30,541 He went, no. 443 00:23:30,571 --> 00:23:30,991 I said, okay. 444 00:23:31,201 --> 00:23:32,881 So you're doing the financial due diligence yourself. 445 00:23:32,941 --> 00:23:33,991 Why, why, why, why, why? 446 00:23:33,991 --> 00:23:35,371 He said, but to save some money. 447 00:23:37,186 --> 00:23:38,896 Right force economy, but okay. 448 00:23:38,956 --> 00:23:42,556 And then he said, and this, this is, I, I said, how big's the business? 449 00:23:42,556 --> 00:23:44,806 And he said, it makes 40,000 pounds profit a year. 450 00:23:45,196 --> 00:23:46,041 I said, stop right there. 451 00:23:46,906 --> 00:23:49,836 That is way, way too small. 452 00:23:50,586 --> 00:23:54,396 Do not buy a business that makes you less than 100,000 453 00:23:54,396 --> 00:23:56,106 pounds net cash in your pocket. 454 00:23:56,286 --> 00:23:57,066 Don't do it. 455 00:23:57,246 --> 00:23:58,056 Do not do it. 456 00:23:58,056 --> 00:23:58,956 It is not worth it. 457 00:23:59,136 --> 00:24:02,436 You might as well go for the larger business and have the bigger win. 458 00:24:02,436 --> 00:24:04,806 It takes the same amount of time, the same amount of effort. 459 00:24:04,806 --> 00:24:09,096 In some ways actually easier than going for the small business. 460 00:24:09,246 --> 00:24:12,216 That is basically a job creation. 461 00:24:13,266 --> 00:24:13,896 And then. 462 00:24:15,276 --> 00:24:20,726 Mistake number 12 is, you troll broker sites and wonder what to 463 00:24:20,726 --> 00:24:22,016 do when they ask for a statement. 464 00:24:22,496 --> 00:24:25,136 The worst place to look for a business to buy is on a broker 465 00:24:25,136 --> 00:24:26,666 site for your first deal. 466 00:24:27,071 --> 00:24:31,251 Later on, it's a good source of deals, but at the beginning you 467 00:24:31,251 --> 00:24:35,571 unfortunately as a new business buyer, don't have that credibility with them. 468 00:24:35,791 --> 00:24:38,221 , And they're gonna ask you for what's called proof of funds. 469 00:24:38,461 --> 00:24:40,291 You may have discovered this if you tried to do it yourself. 470 00:24:40,291 --> 00:24:41,521 They're gonna ask you for a bank statement. 471 00:24:41,731 --> 00:24:42,211 Why? 472 00:24:42,271 --> 00:24:43,501 Because they like cash buyers. 473 00:24:43,651 --> 00:24:46,291 And quite frankly, if you are not a cash buyer, then you might as 474 00:24:46,291 --> 00:24:49,141 well go away unless you've got credibility in a track record. 475 00:24:50,881 --> 00:24:53,791 Which is why business brokers are great after you've done your 476 00:24:53,791 --> 00:24:55,801 first deal and you are proven. 477 00:24:56,101 --> 00:24:59,344 But up to that point, have no credibility with a business broker. 478 00:24:59,674 --> 00:25:08,934 So always go off market and mistake number 13 , is you spend all your time listening 479 00:25:08,934 --> 00:25:12,984 to my podcast and I thank you for that and watching my YouTube, and I appreciate 480 00:25:12,984 --> 00:25:14,424 that, but you don't do anything. 481 00:25:14,499 --> 00:25:16,030 The I don't understand why. 482 00:25:16,300 --> 00:25:19,150 Why do people watch something, which clearly they're interested 483 00:25:19,150 --> 00:25:20,320 in, but they don't do anything. 484 00:25:20,380 --> 00:25:20,950 But I'll tell you why. 485 00:25:20,950 --> 00:25:21,460 It's fear. 486 00:25:22,030 --> 00:25:26,530 It's fear of making a mistake, fear of getting it wrong. 487 00:25:26,770 --> 00:25:28,750 And I get that and I understand that. 488 00:25:29,140 --> 00:25:32,680 And why I do these webinars, or one of the reasons why I do these 489 00:25:32,680 --> 00:25:36,320 webinars is to take away the fear, is to help you realize that. 490 00:25:36,750 --> 00:25:37,950 You can do this. 491 00:25:38,250 --> 00:25:38,640 Now. 492 00:25:38,790 --> 00:25:42,540 Most people need the right level of support to do it, but you can do this. 493 00:25:42,630 --> 00:25:43,830 You can make this happen. 494 00:25:44,400 --> 00:25:47,610 So I've got some options for you. 495 00:25:48,660 --> 00:25:50,130 There are four options. 496 00:25:50,815 --> 00:25:55,345 And one of these will be right for you, and I'd like to invite 497 00:25:55,345 --> 00:25:58,045 you to book a call with one of my team to find out which is right. 498 00:25:58,285 --> 00:26:00,625 The first is my deal club evenings. 499 00:26:00,775 --> 00:26:03,085 I do them in Manchester and I do them in London. 500 00:26:03,355 --> 00:26:06,895 They're two and a half, three hours, come along, 49 pounds. 501 00:26:07,045 --> 00:26:08,515 Come and spend the evening with me. 502 00:26:08,840 --> 00:26:11,900 We have 20, 30 people who are also interested in buying a business. 503 00:26:12,080 --> 00:26:14,810 Some of my experienced clients are there, come and meet us, 504 00:26:14,840 --> 00:26:16,040 spend with the evening with us. 505 00:26:16,220 --> 00:26:17,000 It's a lot of fun. 506 00:26:17,030 --> 00:26:19,520 So look on the dealmakers website for that. 507 00:26:20,000 --> 00:26:23,240 We have a three day live foundation call. 508 00:26:23,330 --> 00:26:26,510 We've got one coming up in October, three days live. 509 00:26:26,510 --> 00:26:27,830 Spend three days with me. 510 00:26:27,980 --> 00:26:31,055 I've got some guest experts, uh, coming in to speak to you as well. 511 00:26:31,490 --> 00:26:34,700 And that's, uh, 5 9 9 plus the VAT for three days. 512 00:26:34,850 --> 00:26:37,700 Includes all your meals, uh, includes two dinners. 513 00:26:37,790 --> 00:26:42,710 We look after you for the three days, and then we've got our 12 month 514 00:26:42,890 --> 00:26:45,140 mastermind program, which is expensive. 515 00:26:45,965 --> 00:26:46,655 Which is expensive. 516 00:26:46,655 --> 00:26:48,935 Now if you look at that and you go, oh my goodness, 10,000 517 00:26:48,935 --> 00:26:50,585 pounds, uh, that's expensive. 518 00:26:50,675 --> 00:26:54,545 Then come to the Deal Club with a foundation course first to check 519 00:26:54,545 --> 00:26:56,255 me out and spend some time with me. 520 00:26:56,525 --> 00:26:59,195 The 10,000 pound Mastermind is worth every penny. 521 00:26:59,255 --> 00:27:02,645 If it's gonna help you avoid making mistakes that, uh, mean that you could 522 00:27:02,765 --> 00:27:04,625 lose your house or lose the deal. 523 00:27:04,690 --> 00:27:06,695 And then we've got VI, p, and Diamond. 524 00:27:06,695 --> 00:27:08,195 Probably not right for you just yet. 525 00:27:08,195 --> 00:27:08,945 Maybe one or two. 526 00:27:09,035 --> 00:27:10,305 You already know me and you. 527 00:27:10,985 --> 00:27:14,905 Ready to go for VIP or Diamond, and that's between 15 and 25K. 528 00:27:15,185 --> 00:27:18,605 So if you're meeting me for the first time today, I suggest coming to one of our deal 529 00:27:18,605 --> 00:27:23,505 club evenings, uh, coming to our three day live foundation course and using those 530 00:27:23,505 --> 00:27:28,275 as a way of getting more comfortable with business acquisition, learning more and 531 00:27:28,275 --> 00:27:32,295 discovering whether this is right for you. 532 00:27:32,625 --> 00:27:35,865 If you go to dealmakers.co uk slash clarity. 533 00:27:36,375 --> 00:27:38,985 You'll be able to book a 15 minute call with one of my team. 534 00:27:39,045 --> 00:27:42,165 Now, it's not a sales call, it's a let's find out what it 535 00:27:42,165 --> 00:27:43,845 is that you want to achieve. 536 00:27:43,845 --> 00:27:47,715 Let's find out is what it is that you want to do and what is right for you. 537 00:27:47,715 --> 00:27:49,785 Is it to come to a deal club event near you? 538 00:27:49,935 --> 00:27:53,025 Is it to come to spend three days at the foundation course 539 00:27:53,085 --> 00:27:54,825 or are you ready for Mastermind? 540 00:27:55,095 --> 00:27:57,585 If you're ready for Mastermind, when we go through the options 541 00:27:57,590 --> 00:27:59,325 for Mastermind with you as well. 542 00:27:59,535 --> 00:28:04,005 So dealmakers.co.uk/clarity if you're here for a reason. 543 00:28:04,080 --> 00:28:06,660 You want to buy a business, you're serious about doing it. 544 00:28:06,750 --> 00:28:10,590 Spend an evening with me, spend three days with me or spend Mastermind with 545 00:28:10,590 --> 00:28:15,180 me and you will discover everything that you need to know to make this successful.