Behind The Scenes At The Business Buying Podcast Recording

Behind The Scenes At The Business Buying Podcast Recording

– I want to ask you this one
because this sounds intriguing. You teach people how to be a deal maker, so the question here, from a listener is, what so the negotiations look
like when you’re selling, if you come up against a deal maker who’s using the same tactics that you’ve been teaching to make deals. – Well, you’re in
trouble then, aren’t you? Actually, this does occur to
me on quite a regular basis. Because we run the program teaching people how to buy a business,
we also actually have a bolt on program now,
about selling a business. But, I think you’re asking me,
if someone who’s been trained how to professionally buy a business, comes up against someone who’s
been professionally trained how to sell a business,
then how does it work? Well, let me just give
you a little anecdote that goes, possibly, some
way to answering this. I was talking to the owner
of a business on the phone. And, about three, or four minutes in he said, Jonathan, I
feel as though I know you because I’ve been watching
your videos on YouTube. And my heart sunk, because
there’s about a hundred videos, with all the tactics
about buying a business. And I’m thinking, well
if he’s watched these, he’s going to be very
educated as to the strategies we are using to establish value,
and that can’t be helpful. So, my heart sunk when I heard this, I thought, well it’s
game over on this one. And, in actual fact it
was quite the opposite. He said, I’ve watched
your videos, I understand where you’re coming from,
and I agree with you. So I said, you do realize
that we’ll structure the deal in such a way that allows for the company to be paid for over a period of time. And he said, yeah I get it. I said okay, fine. And he said, I realize, Jonathan, you don’t do personal guarantees, so I’m not going to ask you. I thought, well fine,
okay, we don’t have to have that conversation, I’ll leave it then. So, in actual fact, by
him watching those videos, it helped me. But I also understand the
question that you’re asking. And, maybe you get to a
situation where the buyer has been taught, by me, never
to talk about money first. The seller has been taught, by me, never to talk about money first. And you both just sit there
staring at each other, because no one’s gonna go first. – Stalemate. – Absolutely. I don’t think that situation
is likely to happen very often. But if it really does get
to a stalemate scenario, walk away, there are
other deals out there. The deal that you’ve got in front of you is not the only deal. Which is why deal flow
is absolutely essential, so you can walk away. And there’s always another deal, another person to meet the next day. – So deal flow is having a
number of opportunities lined up. – It’s your pipeline. – Okay. – And, the stronger your pipeline, the more negotiating leverage you have. So, I typically meet, face
to face, several sellers on one day, and I make it very clear to each person that I
meet, that there’s someone who’s just left the building, and someone who’s about to arrive after them. Because I want them to realize they aren’t the only people I’m talking to. And I also want them to appreciate that they have to compete for my business. If they want me to buy their company, then they have to sell it to me. And, if I don’t go with them,
I can go with someone else. The worst thing for anyone to
think, or any seller to think, is that you want their business, and it’s the only business
you’re looking at. Because it just weakens your position. – So, I think what you’re saying is, that meeting someone who is using the same tactics, albeit
from the other side. If that causes a problem,
it may not cause a problem, but if it does, you simply walk away. – Absolutely. And, the thing is, if
you’ve got a good pipeline, if you’ve got good deal
flow, then it doesn’t matter. And the moment you walk out the door, you’ve forgotten that business
because there’s another one that you need to go and see. So, having deal flow gives
you that negotiating edge, which you can never
have if you’ve just got. And, this is the challenge I see with lots of people who
want to buy businesses, but haven’t been trained
to find opportunities. They have one opportunity, from a broker, and that’s the only one they’ve got. And they have this anxiety
around, I’ve got to do a deal, I’ve got to do a deal, but
you’ve only got one on the table. It’s a terrible position to be in. So having the knowledge, and
the skills, and the know how of how to find good deals, is essential. – Let’s just put the question
back into perspective, because I think this
will be quite telling. You have done many, many, many deals. You’ve met someone coming with
the same tactics back to you, because he’d seen your videos, once. Have you, in all the deals you’ve done, come across anybody else who has used the same deal making
strategies back to you. – I would walk away, well I did walk away from something this week, and the sellers were very different to the
typical sellers that I meet. They were professional investors, they were unemotional about the business. And that, it just felt to me like, well there were several things. It felt to me like, it’s
that they were smart people, and they had experience
that I didn’t have, and they couldn’t make the business work, so what chance have I got. So, they’re smarter than
me, they haven’t turned it into a great success story,
what makes me better than them? Nothing. Therefore, that’s not the
sort of deal I’m looking for. And secondly, they would
be an absolute nightmare to do a deal with, because it would just go backwards and forwards
for far too long. I want to do business with
people who are sensible, reasonable, and rational,
and as soon as you get professional investors, they’ll turn it into the deal of the century,
and it will take six months to put together, rather than a few weeks. – Let’s just, again, give it
one more piece of context. Presumably, you are buying businesses from people who aren’t,
themselves, serial deal makers. – No. – And your meeting this week was, effectively with a serial deal maker. – Absolutely. I was actually meeting with myself. – So I’ll say it again, serial deal maker, trying to deal with a serial
deal maker, unlikely to work. – Yes, I always try to avoid
that professional investor type personality because, quite frankly, it just makes everything
incredibly difficult. And I’m not the right buyer for that. Which is why I can walk away. On that particular day,
I had one coming in half an hour later. Who was a lot more my profile. Owner, manager. Very agreeable, very easy to
get on with, motivated to sell. Had a lot of emotion
invested in the business. And was keen to do a deal. And, it just makes life
an awful lot easier. – And finally, I just
thought of one more addition. Presumably, in those
initial phone conversations, and with a little bit of
personal due diligence, you would have established whether they’re a serial deal maker? – Well, yeah, the example from this week, I hadn’t actually spoken to them on the phone myself, a colleague had. Now, if I’d spoken to
them on the phone, myself, I would have sniffed out
that that was exactly who they were, and I
wouldn’t have met with them. So, my own fault really, I
didn’t do the initial call, and therefore I didn’t have the details.

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