In this episode, Jonathan Jay is interviewed by Greg of the Empire Flippers Podcast, and they talk about the complexities of structuring deals and provide valuable insights into the world of acquisitions. Jonathan and Greg discuss the importance of looking for the right characteristics in an acquisition target. They talk about ensuring a smooth transition by having a management team in place. They recommend targeting larger, established businesses with positive cash flows for greater profitability and financing ease.

They also discuss ways to increase business valuation by making oneself redundant, making it more attractive to potential buyers. They explain the no-money-down approach, particularly in situations with limited funds, and shed light on leveraged buyout strategies. Mitigating financing risks is addressed, with Jonathan advocating for acquiring businesses with positive cash flows to support debt and cautioning against distressed businesses.

Key Highlights

[01:46] How Greg met Jonathan Jay

[03:36] A brief background of Jonathan and what he does

[05:59] Structures and systems Jonathan would put in place if he was to buy 48 businesses again

[08:16] Characteristics to look out for in a business

[09:00] The importance of having the right management team

[11:11] How Jonathan’s strategy is different from others

[14:29] How Jonathan structures LBOs

[15:25] Why buying distressed businesses is a trap for newbies

[23:55] How Jonathan exited the nursery schools

[29:31] The letter system for finding retiring business owners

[32:29] Common mistakes that people make while buying businesses

[35:50] Businesses that are hard to finance

[38:30] Best advice ever received by Jonathan

[40:16] How to connect with Jonathan

Notable Quotes

• The ideal business to buy always has management in place already.
• I always tell people to go for the bigger businesses because you'll make more money, they're easier to finance, they're easier to buy, and they run themselves better. They don't need you.
• Making yourself redundant in your business is the fastest way to increase value. And it just makes your business easier for someone to buy from you.
• A beginner should be looking for a business that has made money day in and day out for the past five years, has predictable cash flows, can support any debt you put into the business, and still has enough profit to take money out.
• Buying a business is not about the business you will own but the person you become.

Resources

Buying a business is only the start, which is why we are now teaching what happens next on the Mastermind program. Now, if you've already bought a business, you should be part of my Inner Circle group where we discuss raising capital, integration management, and exiting. Email Maria on [email protected] for more information. 

If you are looking for a lawyer in the UK to help you get the deal over the line, then use my own lawyer, John Andrews. You can phone his office at (0345) 2412494 or email him at [email protected].

If you would like to take the next step to learn the best ways of buying a business, without risking your own cash, you can access my free training at: www.dealmakerspodcast.co.uk

Watch my Webinar Training Video: https://www.dealmakerspodcast.co.uk

You can also request a free copy of my book at: https://www.thedealmakersacademy.com/free-book-giveaway/

If you want to jump straight to my live Zoom FastTrack course, please go to: https://www.thedealmakersacademy.com/fast 

Connect with Jonathan Jay at: Website: https://www.thedealmakersacademy.com/ LinkedIn: https://www.linkedin.com/in/jonathan-jay-3556b230/ YouTube: https://www.youtube.com/c/TheDealmakersAcademy