Buying A Business: Strategies & Pitfalls to Avoid #MakingBank #S7E36
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Buying A Business: Strategies & Pitfalls to Avoid #MakingBank #S7E36
Welcome back to Making Bank. On today's episode, we have Jonathan Jay who has been an entrepreneur ever since he dropped out of the university at the age of 19, now 50 years old. He has built businesses and publishing, digital marketing, adult education, coaching, preschool education, and has sold each of those. During the pandemic, he made 48 business acquisitions to create the fourth largest group in his sector in under three years. He now helps other people buy businesses, helps him avoid the expensive mistakes, as he says, he has made all of them.
Make sure you check out this episode of Making Bank with Jonathan Jay.
(3:04) Becoming An Entrepreneur
Jonathan talks about how he has always been an entrepreneur all his life. He has never worked for anyone. He only had his own business to run and has been doing that for 30 years. He has done many things, some went wrong and some went right. Overall he has a very successful career as an entrepreneur even if it was challenging sometimes.
(6:02) Why To Buy A Business
Look for a business that's been running for at least five years, that makes solid, reliable profits every single month. Buy that business without risking any of your own cash and then once you've got that business, that business will continue to make solid, reliable profits month after month. This is much better than starting a business from scratch and risking the chances of it failing.
(7:25) Risks Of Buying Business
The risks of buying a business are always high. The wrong method is going to a bank and asking for a loan using property. This is high stress and high risk. The best way is to find a business that is already striving but has an owner that is ready to sell it and is highly motivated to let it go. The chances of this business being successful are higher as compared to the first option.
(11:31) Convincing Sellers
You need to know why they are selling the business and try to ease in on that. Remind them why they wanted to sell in the first place. And also it is important to approach as many sellers as possible. Not everyone will say yes. Some will say no. Hence, at the end of the day it's actually a numbers game and the chances of success highly depends on the numbers of sellers approached.
(14:26) Business Buying System
The tendency is to play it small, play it safe.But, when you buy a bigger business, you're actually buying a better business. You're buying a business with better financial controls, with better marketing, and probably a better product because it's reaching more people. More people are buying it. All of these things make a better acquisition.
(18:48) Key Tips For Buying
You have to get really good at what we call the discovery call. The discovery call is that 30 minute phone conversation with the owner where first impressions matter. The next step after that is you want to get them to send you some basic financial information. Then right at the very end is selling the business and this will put more money in your pocket than you've ever had in your entire life, and that's when you can really start making a difference in the world.
(24:41) 48 Acquisitions In 3 Years Jonathan talks about how it was a crazy time and how maybe they did get a little too greedy over it. It was stressful and even caused many health problems for him and was even hospitalized for it due to the immense stress. He did not recommend it to anyone and concluded that it’s not advisable to anyone.
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