Former Investment Banker Now Successful Business Owner Jonathan Jay Reveals Everything You Need To Know About Buyers (#255)

Jeffrey Feldberg: [00:00:00] Welcome to the Deep Wealth Podcast where you learn how to extract your business and personal Deep Wealth. 

I'm your host Jeffrey Feldberg. 

This podcast is brought to you by Deep Wealth and the 90-day Deep Wealth Experience. 

When it comes to your business deep wealth, your exit or liquidity event is the most important financial decision of your life. 

But unfortunately, up to 90% of liquidity events fail. Think about all that time and your hard earned money wasted. 

Of the quote unquote "successful" liquidity events, most business owners leave 50% to over 100% of the deal value in the buyer's pocket and don't even know it. 

I should know. I said "no" to a seven-figure offer. And "yes" to mastering the art and the science of a liquidity event. [00:01:00] Two years later, I said "yes" to a different buyer with a nine figure deal. 

Are you thinking about an exit or liquidity event? 

Don't become a statistic and make the fatal mistake of believing the skills that built your business are the same ones to sell it. 

After all, how can you master something you've never done before? 

Let the 90-day Deep Wealth Experience and the 9-step roadmap of preparation help you capture the best deal instead of any deal. 

At the end of this episode, take a moment and hear from business owners like you, who went through the Deep Wealth Experience. 

Jonathan Jay has been an entrepreneur since dropping out of university at age 19.

Now 50 years old. He's built businesses in publishing, digital marketing, adult education and coaching and preschool education, and sold each of them. 

During the pandemic, he made 48 business acquisitions to create the fourth largest group in the sector in under three years. One notable [00:02:00] deal was buying a 5 million pound annual revenue digital marketing company from its private equity owner for just one pound and selling it for 1.3 million pounds 11 months later.

Jonathan is an advocate of a healthy work-life balance to avoid mental suffering and physical burnout, and believes that you can achieve success without business taking over your life.

Jonathan now helps other people buy businesses and helps them avoid expensive mistakes. 

As he says, he's made them all.

Welcome to the Deep Wealth Podcast, and for all you listeners, hang on to your hats. I have an epic-epic episode for you today. You know, at Deep Wealth, we're always talking about your future buyer, and they're such mythical creatures until today, because we have a buyer in the person, not just any buyer.

We have a business owner, an entrepreneur, a founder, he has done some incredible things. You heard it in the introduction. No need to repeat that. Those feats speak for themselves. And Jonathan today is going to be really sharing the [00:03:00] system that he created. And I'll give all of our community a little nugget.

People that have gone through our system often come back and they say, Jeffrey, you know what? We're gonna take the Deep Wealth nine-step roadmap. We'll reverse engineer it, and now we're gonna buy companies to start. Growing and accelerating profits, and now we can say, yeah, you can do that. But why work so hard?

Because Jonathan has his own system that's very synergistic with what we do at Deep. Wealth that Jonathan can really lead the way and help you do that. You'll hear all about that today, but I'm gonna pause it right there. So, Jonathan, welcome to the podcast and absolute pleasure to have you with us 

Jonathan Jay: Great to hear Jeffrey. Thank you.

Jeffrey Feldberg: Wonderful. And Jonathan, there's always a story behind the story. So what's your story? What got you to where you are today?

Jonathan Jay: I've never actually worked for anyone else, ever. I've never had a job. I dropped out of university at age 19 to start my own business and since then I've never worked for anyone else. I've always done my own thing. And over the years I've employed hundreds and hundreds of people. I've bought and sold over 60 [00:04:00] businesses and I think that I've got a pretty deep entrepreneurial streak in me. My parents had their own business as well, so I guess it runs in the family.

Jeffrey Feldberg: That's terrific. And certainly some of the things that you've done really speak for themselves. And so for our listeners, and some of them may even be either for yourself or people who are following your system, maybe speaking to you about their business. So before we talk about your system, just to flip it for a moment, Jonathan, I'm curious, when you're looking at a business to buy.

What would have you walk away from that business saying Thank you, but no thank you. Or, you know, I know you're asking X dollars, or in your case X pounds being in the uk, but because of A, B, C, and D, there's gonna be a big penalty on that if I even do it at all. What would cause you to walk away or put a penalty on enterprise value?

Jonathan Jay: Good question. Lots of things. Unfortunately for the seller quite often sellers, Shoot themselves in the foot by having very unrealistic expectations of value. So [00:05:00] they think that their business that doesn't really make much money or it hasn't made much money recently is worth a lot of money because they've worked hard at it for 20 years.

They put a lot of effort into it. Customers love them, all of these emotional reasons, or they link the value that they want for the business to some other financial outcome, like buying the holiday home or paying off the mortgage and buying the world cruise or whatever it might be. So they say, all these things add up to this.

That's how much I could sell the business for without really taking a long, hard look at the business and saying, what is the value right now? And sometimes, We all have to have that realization. I've had it myself as well. The amount of work that you put in doesn't necessarily mean that it's gonna be worth as much as you think it's going to be worth.

So, so we have to get over that perception of value that the seller has. And that's usually the first hurdle. 

then irregular cash flow is another. Buyers want certainty. They don't [00:06:00] want a business that's dependent upon the genius of an individual. And then that individual obviously leaves the business on sale.

I mean, every seller these days says that it'll do a handover. How very generous. But we would like to know where the keys to the filing cabinet are. But what happens is that yeah, the seller disappears. Quite often, they do become quite hard to contact, and we've got a business that starts to fall apart very quickly.

So I'm only interested in businesses that are solid, that are profitable regardless of the owner being there and don't have that fragility a very small business. So, typically larger businesses are easier to sell and easier to buy.

Jeffrey Feldberg: Sounds very reasonable in terms of what you're doing, and you're dispelling some miss out there. So, Jonathan nudge, wink, wink. What are you saying? That despite all my blood, sweat, and tears are harder, I work. My company isn't any more valuable than what the bottom line is. What's going on with that?

Jonathan Jay: Sometimes actually working less increases the value of the business. Cause you put other people in to run the business for you and that increases value. So, actually [00:07:00] being there every day.

Is not really going to increase your value and also preneur. And I count myself in this category, we all think the next year is going to be better.

So, we preneur and optimistically feel that next year's going to be a better year. And sometimes it isn't. But we say well next year's going to be better. And sometimes it isn't. So the trick to selling at the right time is to do it at the right time where the business is on the, upward curve.

But then you see the problem is that the entrepreneur. Is still enthusiastic about the business and still believe that it hasn't quite reached the pinnacle that they can take it to. But if you want to sell the business, you to sell it before that, you reach that peak. Otherwise, it's downhill from that moment onwards.

Jeffrey Feldberg: Absolutely. And before we talk about what you're doing at the Dealmaker Academy or YouTube channel, where you have all these incredible strategies and stories that you're revealing, what's your take on the business running without the business owner?

Jonathan Jay: I think it's just so [00:08:00] important, but the reason it doesn't happen very often is because, When the owner starts the business, they do everything themselves. is a one person business and they do a little bit of everything. And then to hire that first member of staff is a big. leap of faith, a lot of trust.

That person can never do it as well as they can, but eventually you grow a team, but you're still micromanaging. There's a little bit of paranoia that the business owner has that is all gonna fall apart without them. So they control everything. But what they're actually doing is reducing the value of the business because the savvy business buyer is gonna spot that a mile off and is going to realize that.

This is really a glorified job for the owner. It's not really a business. It's a job where they have some help

Rather than a business. And the people who can take that leap from that type of business to a business that really does have a properly formed management team, but [00:09:00] can work independently of the owner.

And can make decisions independently of the own that can then grow the business, that business is gonna have the most value in the future. So the owner's gotta let go and spend more time with their family, go on vacation more frequently, and prove that the business can operate without them. That is where the real value is.

Jeffrey Feldberg: And for all of our listeners out there, isn't it interesting at Deep Wealth, we're saying the exact same thing as Jonathan, but on the opposite side. So you're hearing from Jonathan, who is an incredibly experienced investor and buyer and saying, Hey, business owners have the business run without you.

Please, and thank you. Please do that. So Jonathan, I'm sure you deal with a situation where people are coming to deal makers, your company, and they're saying, okay, Jonathan, you know what I'm smart enough to know that the skills that built my business aren't the same ones to buy another business. And I want to grow.

I don't wanna work so hard. So talk to us about your system. What can we expect? [00:10:00] I sign up, we're gonna go through your system, through deal makers and learning your strategies. What are we in for? What's gonna be happening?

Jonathan Jay: so our approach to business acquisition is that you shouldn't risk. Your savings. You shouldn't bet the farm on a business acquisition. Yeah, business is a big unknown quantity. We don't know what's around the corner. I mean, There might be a pandemic who would've thought about that happening, a pandemic around the corner.

So I think it's very important, especially for your first acquisition, is to not. Have any risk involved. Now, risk usually comes from taking your life savings and putting it into the deal, or making the down payment for the business and that is something I help people avoid doing. So our approach to business acquisition is a no risk approach where you do not put your own money in, you structure the payment for the business.

In such a way that you don't overpay for the business quite [00:11:00] often. People who buy businesses are a little disappointed with what they get. And not everything is as it seems. I think it's fair to say that sometimes business owners exaggerate. 

Aspects of their business. And if that isn't picked up in diligence, there is a lot of disappointment after it's sold.

So I teach people how to structure the deal so that the payment for the business is linked to the performance and the success of the business,

Because then it's fair if the business performance falls off a cliff, three months after it's sold, then you aren't left owning a business that is a shadow of its former self.

Jeffrey Feldberg: So, jonathan, are you doing that through Earnouts and other kinds of performance guarantees that you're looking for?

Jonathan Jay: Yeah exactly that. Now, this isn't something that every seller wants to do. if I'm the seller and I have been on a number of occasions, I want all the money on day one. Thank you very much. The reality is that even if you are selling to private [00:12:00] equity, which I have done, there is always.

A degree of retention of a degree of the price that is deferred and quite often linked to performance with the carrot and stick of, if the business doesn't perform, you don't get it. If the business performs, you get more. appealing. 

Jeffrey Feldberg: So, let's talk about that because here on this particular issue, you and I. At the surface may appear to be at opposite ends because at Deep Wealth, we banish that E word, otherwise known as an earn out. And so let me ask the question, because you know the saying, you wanna change your life, ask the right questions.

The what if question. What would have to happen for a business to demonstrate certain characteristics that for you as an experienced buyer, an earnout is off the table? How could that work? What would that look like? Does that work for you and your system?

Jonathan Jay: So in what circumstances would I not consider an 

Jeffrey Feldberg: Correct. in other words, you're saying, you know what, Jeffrey, 99 times out of 100, I'm always insisting on a [00:13:00] performance guarantee and an earn out. But your company is doing A, B, C, and D. This is gonna be that one instance out of a hundred or a thousand or a hundred thousand that I'm not gonna do that.

Congratulations.

Jonathan Jay: I'll tell you exactly what situations. A actually, to be fair, they're more common than you'd realize. It's where the business has assets. The business has real estate, the business has vehicles, plant machinery. So in an absolute worst case scenario where the. The business fails to perform for whatever reason.

Maybe it is the economy, maybe is, some key people leave at the same time. Maybe there's a very strong competitor that enters the market and the business suffers. Then at the very least, I can get my money back through the sale of the assets.

Jeffrey Feldberg: And Jonathan, I love what you're saying because at Deep Wealth, what we're always saying for our community is, Hey, you have to understand and think and master the art and science of a buyer. And you'll tell me if I'm on base or off base, because predominantly as a buyer, I would imagine there's two things at the [00:14:00] very minimum you want to do.

You want to minimize as much risk as you can, take that off the table, and you want to maximize the ROI as high as you can, as much as you can.

Jonathan Jay: Yeah that's exactly right. And I have people in my community who are buying businesses where the purchase price is actually less than the asset value. And you might think well, that sounds absolutely crazy. But sometimes you have people who are very motivated to sell and they've earned good money from the business over the years.

They don't have this desperation to make money when they sell the business. They've done all right over the years, and that's really the best type of business for you to buy a business that's performed well over the years, because if it's performed well historically, you hope that in the future it's gonna perform well.

As well. So if we are buying a business from someone who's done well, then they don't have this desperation to have all the money on day one because they're quite happy to receive it over a period of time because they don't [00:15:00] need it all on day one. What I always find is there's a link. There's a link between the people with the businesses that aren't performing very well with, I need all the money at the beginning.

Because they don't actually have complete confidence that that business is gonna be surviving in two, three years time. And I completely get it. I can sit cause I've sold as well as bought.

Jeffrey Feldberg: Yes.

Jonathan Jay: Actually, my first transaction in M&A was the sale of a business 24 years ago, and then I bought a competitor a few years later, combined it with another business that I owned that was a startup that I'd started up five years earlier, put the two together and sold it to private equity the following year.

So I've done both. I've flipped between the two, so I see it on both sides. So I feel that I've got a pretty realistic way of looking at both the purchase and the sale.

Jeffrey Feldberg: No. Absolutely, and from the outside looking in, people may say Jeffrey, why are you and Jonathan even talking? You're at opposite ends of the table. You're competing. We don't believe in that, [00:16:00] and we always believe in not a zero sum game that either, Jonathan, you're winning and we're losing, or we're winning and you're losing.

How do you find that win, win for all the stakeholders? And let me ask you this, because I know when I speak to buyers, they'll often use this term just like a sharks in the ocean, and the shark picks up the scent of blood. So they call it blood in the water, Jeffrey. When we smell blood in the water from a buyer who's desperate that something's going on, they're not really telling us, but we can just sense it, then all bets are off.

And what we thought the business was worth, forget that we're gonna go in at a much lower value. So for our community, they're following your system. Jonathan, who doesn't want a deal? Let's be honest. Everyone does. So when we're speaking to other businesses that we're looking to purchase that blood in the water, what are some telltale signs that there may not be telling us on the surface, but if we're watching and listening closely, we're hearing it and seeing it?

Jonathan Jay: Yeah Interesting. And it's not actually a phrase that we ever use. We always try and do fair [00:17:00] deals. And, sometimes a business is worth what the seller wants for it. And if we can justify it, and if we can finance it, then that's absolutely fine.

But the, yeah the blood in the water you do get this feeling of some sellers do wreak of desperation. And, it's because things have conspired against them. They've got a cash flow crisis. They can't meet payroll at the end of the month. They need to do a deal right now, and they might start off quite bullish and quite confident about the value.

But then there is this, they're on the phone wanting another meeting because, It stops being about the money. It's about either saving the business, it's about exiting the business, it's about the stress that's building up, a business that's had some problems or got some problems going on.

Very stressful for the owner. Extremely stressful. And we've all been there at some point and every business owner has been through a cash flow crisis where it's, yeah, it's got pretty scary and it keeps you awake at night, so I completely get that and. [00:18:00] Despite the fact that you can buy a business for relatively little, it doesn't mean that you should buy that business.

Sometimes inheriting someone else's problems is not really what you need. And we have various. Insolvency processes in the UK similar to your Chapter 11, chapter 12 where we can actually save and rescue the business in a legal framework that protects it from its creditors. And that's obviously only in the most serious positions, but quite often actually the motivation of sellers is not quite so desperate.

It's more around retirement. 

There's a lot of retiring owners at the moment. just the pattern of an aging population. And those retiring owners often leave it too late to think about selling their business. They're retiring next year. They've got this plan to retire at a certain age, and now they need to sell the business.

And unfortunately, it doesn't always fund their retirement because they've had it for 30 years. Doesn't make it. 30 times more [00:19:00] valuable. So, we see that situation a lot and quite often, unfortunately retirement age comes with ill health and so we have to be quite sensitive around that.

And this is never taking advantage of people. This is helping them achieve the goal that they want to achieve. And at the same time, if it's a good business acquiring the business,

Jeffrey Feldberg: And Jonathan, as you're speaking through that, what's interesting is because we're really on the same page, I would suspect for 99% of the things that we respectively do and for our listeners, Here how Jonathan is saying the same thing that we do here at Deep. Wealth, what's the problem that you're solving?

Whether you're buying a business, whether you're selling a business, find that problem, figure out how to solve that problem, and watch the doors open up. And so Jonathan, I'm thinking of our listeners in the community who are saying, okay, you know what, Jonathan? I like what I'm hearing. I want to be just like you.

You know, I've built a successful business. I'm now gonna start buying all these other businesses. I'm gonna have all these portfolio companies. I'm gonna sit back on my yacht, have my pina colada, [00:20:00] have these businesses just do their thing and increase my Wealth. And we don't wanna burst their bubble because of course they can do that, but without your system.

Without your insights and your strategies, what's likely to happen for a business owner who says, I'm smart. I built the business. The skills that built my business are gonna be the same ones to buy other businesses. What's so wrong with that? 

Jonathan Jay: Yeah. It's interesting because the majority of my clients are business owners, and you'd think that someone who's been in business for a decade would know everything they need to know about buying a business. But it's a completely different skillset. And it's interesting that a lot of the skills do overlap in terms of the interpersonal skills, but the actual technical skills are a different skill set.

So, not many business owners have negotiated a Salem purchase agreement. Not many business owners have decided whether to buy the stock or the assets. Not many business owners have negotiated the structure of a deal and raised finance to buy a business. So there's all these new skills and what I found.

Is that [00:21:00] people who do it by themselves and try and figure out as they go along number one, it takes a long time to do that. So the deal always takes a long time, and usually when you're buying a business, the longer it takes, the less likely it is to happen.

kind of goes a little wobbly. People get tired.

We call it deal fatigue. They get tired of the whole thing and they lose interest. So it takes a long time and if you're making it up as you go along, you can make expensive mistakes. And in business there is no such thing as an inexpensive mistake. Every mistake in business money they missed bits outta the process.

And once they bought the business, they realized they didn't include certain things in the contract that they should have. Included. So I started to write it all down and I put it into a system, 21 steps all the way from having the goal, what is it you want to achieve all the way through to the final Exit and put those steps in place so that no one misses anything out.

And when I interview my clients and so much of my YouTube [00:22:00] channel is me just interviewing people who've been on the program. I often ask them, what they've learned and surprisingly I think I was surprised at first, maybe I'm not so surprised now, but everyone said just follow the system.

And it was almost like they'd all got together and said, this is what we'll say when Jonathan asks us this question. But they hadn't done that independently. They're all saying just follow the system. Just follow the process and get the result. Just like any 

Jeffrey Feldberg: And for our listeners, as you're listening to that, think about all the heavy lifting because Jonathan, again, please kick me under the table virtually here, I'm off base with this. I suspect that some of your 21 steps came from some of your failures. Oh my goodness. What did I just do?

Look at this. Look at what it's costing me. I would not have done the deal if I would've known this. Okay, that's, I'm making this up. That's step number 13 and sub number 17, that you've already figured this out.

Jonathan Jay: Yeah, absolutely. And I'm no guru, I'm not one of these people who sort of presents themselves as perfect and there are plenty of gurus out there. I'm certainly not one of them. I'm someone who's been [00:23:00] there and done it. and I have made plenty of mistakes over the years.

Uh, And I own up to them. I've discovered actually that my clients. Like hearing about the things that I, I've messed up on as much as the success is. So yeah, I bought businesses that I look back and I think I should never should have bought it. I've got my structures wrong.

 I've overpaid sometimes. So I've, I've done all those things, but I think that is what gives you experience, doesn't it? It's the mess ups that give you the experience as much as the success is.

Jeffrey Feldberg: A Absolutely. And you getting your PhD from the school of hard knocks, which took time, effort, a lot of pain along the way. That would be for everyone's benefit because they're going through your system. And Jonathan, speaking of your system, so I'm going through this. I'm starting to master your 21 steps.

How long will that take me? What can I expect in terms of really understanding your system and then beginning to implement.

Jonathan Jay: Yeah, sure. So, we say that from the starting point of saying, I want to buy a business. You can buy that first business in six months. So that [00:24:00] includes deciding exactly what you're going to buy, then going out and looking for those deals. And by the way, we go off market. We don't go to businesses that have been listed for sale with brokers.

And we have a reason for that, which I'm happy to share. And then we show you how to negotiate the deal, put the deal together, construct the deal, raise the finance if necessary, it's not always necessary to raise finance. get the deal to closing. and that is a six month process.

We have some people who do it a lot faster and some people take it a slower pace, but it's entirely up to the individual.

Jeffrey Feldberg: And so Jonathan, you put a lot there to unpack and unravel, but let me ask you this, because it sounds like when you're saying, Hey, we don't wanna find a business that's already on the market, and we probably know all the reasons for that, you're going to pay more and. Probably other obstacles along the way.

You might have some competition with some other people wanting to buy that business. The price is going to increase. So it sounds like, again, I don't want to assume, but it sounds like with your system, we're going to leverage the power of an unsolicited offer. Would I be correct in that and if I am, can you tell us about that?

Jonathan Jay: [00:25:00] Absolutely. So, you are right when a business is on the market, other people are looking at it. The broker, the agent, whoever's representing the business. Is going to play on competitive tension. They're going to, they're gonna be other people interested and that's how they get the very best price for their clients.

And if I was advising people on selling, I'd say, that's exactly what you should be doing. You play the prospective buyers off against each other and the pr and the price goes up or the terms improve.

so absolutely. I prefer to go to someone who's thinking about selling but hasn't done anything about it yet.

So there's no one else in play. And you have a far more, I believe, sense sport conversation and you can get under the skin of. Why that person wants to sell, understand their motivation. If there's an intermediary, a third party, they don't want you to have that emotional conversation. They want to keep it about the numbers.

And that is to the detriment of a savvy business buyer. Although, to be fair, it's to the advantage of a savvy [00:26:00] business seller.

Jeffrey Feldberg: Sure, but you know what? Different strokes for different folks, as we say on this side of the pond. Maybe you have something similar in the UK or a little bit different. So let me ask you something, because I'm a listener now, and I'm saying, okay, you know, Jonathan, I am liking what I'm hearing with your system.

I can use the power of unsolicited offers to get a real value on businesses that I might not be able to do otherwise. But how do I know a business or a business owner is contemplating selling because effectively, am I doing a cold call or how do I know what are the telltale signs that I'm not wasting my time phoning someone up who has no plans to sell for another 30 years?

Jonathan Jay: Yeah, absolutely. Good point. We don't cold call because it's time consuming. People don't like doing it. People don't like receiving it. I'm sure it can be successful, but it always feels like hard work. So we consider the people that we want to approach who are typically people in their sixties, late fifties, [00:27:00] sixties, thinking of selling because of retirement age, health and that sort of thing.

So what we do is we do it the very old-fashioned way. We send letters.

So if someone is listening to this under the age of 30 and has got no idea what I'm talking about, a letter is where we print off an email, we put it in an envelope, we put a stamp on it, and two or three days later it arrives at his destination.

So, we send letters and I have clients I can think of one particular client who is on a very aggressive roll up buy and build. And he sent nearly 100,000 letters. Businesses in the uk. He's going for it, he's on a 50 million pound Exit plan, so he's, gotta grow his revenue and his profit as quickly as possible.

So, most people send a thousand letters and get anywhere between 10 and 20 responses, and you're gonna get a couple of curious people. But you're gonna get a couple of serious [00:28:00] people as well. So if you're looking to buy one business, 1000, 1500, 2000 letters will find you that business to buy. And just to put it into context, when I say a business to buy, I'm talking about a business with millions of dollars of revenue.

Jeffrey Feldberg: No, absolutely. And from today's digital marketing and everything else that people are doing, really, when you think about it, it's not that much different in terms of the numbers, in terms of how many emails do we have to send today to get someone to respond.

Jonathan Jay: Is exactly. 

Jeffrey Feldberg: And Jonathan, you are spot on because I know in my businesses, For marketing.

Some of our best campaigns actually aren't digital. It's a good old fashioned paper because no one does it anymore. So you stand out when you do it the right way. And so, Jonathan, to find these business owners that are nearing retirement, are you using list brokers with certain demographics? 

Jonathan Jay: Yeah. 100%. That's exactly what we're doing.

Jeffrey Feldberg: Terrific. And I suppose your system without you revealing all of the secret sauce here on, on this episode, we want people to come to the [00:29:00] Deal Maker Academy and go through your program, but I take it that your system would have templates that we can use in terms of what to say in the letter, how

to position it. 

Jonathan Jay: Actually, yeah I, provide 13 templates, 13 letter templates because you don't just write to the business 

Jeffrey Feldberg: Mm-hmm. 

Jonathan Jay: leave it a month, you write to them again. And it's interesting how many of my clients say that someone responded to a letter, but it was like the third letter or the fourth letter that they received and that persistence.

During the pandemic I bought 48 businesses, and I did that by sending thousands and thousands of letters. On one particular occasion, I sent out 10,000 in one go, the telephone goes crazy, becomes crazy busy. But if you are on a very aggressive acquisition streak, then your deal flow.

Is going to help you. You can't buy businesses unless you've actually got people phoning you up saying that they want to sell.

Jeffrey Feldberg: And it's remarkable with one on that side. It's not really that different today. We hear statistics of it'll take up to [00:30:00] seven, sometimes even as many as 15 touch points for someone to begin to recognize and reach out to you. 

But Jonathan was also remarkable. You're very modest because we heard it in the introduction.

So yes, you purchased 48 business acquisitions is what you went through, but now you also did something that you don't really hear a lot about. You bought a business for one pound and then less than a year later if memory serves, you sold it for 1.3 million pounds. So what's going on with that?

Jonathan Jay: it's a great story. In fact, I actually recommend to people not to do it. Okay. But buying, what we call a distressed business, an underperforming business for effectively nothing, for a dollar, for a pound for nothing means that you are inheriting their problems.

That's what happens. And you've gotta be a certain personality type to be able to deal with creditors knocking on the door, wanting money, the tax authorities turning up, wanting money. I mean, you know, that takes a certain personality [00:31:00] type and The last time I did that was about six, seven years ago.

I'm not entirely sure whether I would do it again. Now I want a stress-free life right now. But yeah. So I bought this distress business. It was a digital marketing business. I bought it from a private equity owner. They just wanted to get it outta their portfolio. The portfolio was coming up to the end of the fund life five year fund.

So they were selling everything in the portfolio to return to their investors. This business. They didn't perceive it to have any value, so they just sold it to me for a pound just to get rid of it.

I realized there was value in the business. Had revenues of about 5 million pounds, so about 7 million.

And there was a core part of the business, 5 million of recurring revenue, so search engine optimization, Facebook advertising, that sort of thing. So I stopped the business doing all the things that were losing money. The web design was losing money, the video production, losing money, social media, losing money.

So I chopped the business down to make it a smaller business, just that [00:32:00] recurring revenue part. And then I found a buyer for it, a competitor, who I could do a very fast deal with because they wanted recurring revenue because they were building their business to sell.

And therefore they would buy from me because it helped them get to where they wanted to go.

And the whole journey was 11 months, 11 months from buying it to selling it. So yeah, it's a, it is a great story. It's an inspiring story, but if you are a beginner at buying businesses, don't do it. I think it's something that you need to have a bit of experience to do.

Jeffrey Feldberg: A buyer and seller were in this instance, and because you're on both sides of the table, and in that story, Jonathan, in that journey that you did, and by the way, 11 months is remarkably fast from start to finish. That takes experience and that takes your wisdom and your insights. I'm wondering, were there areas of overlap?

So when you went in to buy it, you're using a buyer strategy. When you went to sell it, you were using a seller strategy. Where were the [00:33:00] similarities between the two that you almost couldn't tell, Hey, am I buying or selling a company? Because the, strategies are one and the same, so in that one instance. 

Jonathan Jay: So, I actually sent out letters to find the buyer, so I sent out letters to 1000. Digital marketing agencies in the UK and I said, slightly more eloquently than this, but I said, if you're interested in this business then let's arrange a meeting. And I'm holding meetings this week.

And we have appointment slots at nine, 12 and three. And I got them to come and sort of effectively compete. They never bumped into each other, but haven't come along me to tell them about the business. And I ran a competitive process and I made it easy for them to buy from me.

Because I didn't wanna own this business for one minute longer than necessary. So I made it easy for them to buy. I wasn't demanding, I wasn't difficult. I wasn't talking up the value. I, I said, look, let's be sensible about this, make an offer. And I found someone who could [00:34:00] complete quickly.

The offer was sensible and we did a deal in a very friendly way because I helped them get what they want and they wanted it as quickly as possible so they could add that recurring revenue into, their business.

Jeffrey Feldberg: It's a terrific story and it really illustrates what I call the art side of business, whether you're buying or selling. And let me ask you this, Jonathan. So as you're going through that, my wheels are turning because I'm thinking on our side we have the winning mindset. So step number five, the winning mindset.

I. Where, once again, whether in this instance you're at one point in time, a buyer, another point in time, a seller, same company, what was the mindset like that were similar, that there was overlaps between those two that really makes the deal just happen, where otherwise people would lose a deal or they make it more difficult or make it longer than what it should be?

Jonathan Jay: Yeah, so it's all about mindset. So much of it is mindset. It's the way you think about yourself, the way you think about your relationship with the other person, the way you think about the deal. And, someone can be [00:35:00] technically adept, but without the mindset they hold themselves back.

 So I had to put myself in their shoes. They wanted to acquire this business. That's why they'd come to see me. They wanted to pay a sensible price and a fair price, but because I'd only bought the business for a pound, really anything was an uplift. Anything was going to be a good return.

And yes, I had an objective, I knew where I wanted to put it. But I worked alongside them and I think that's the key mindset. I didn't make it into, a fight over the value. We weren't arm wrestling over the table. We were sitting the same side of the table to get a deal done together.

And I think that relationship helps you get a deal done. It's when people get argumentative with the seller or the buyer. And, my business is worth more than that. It doesn't get you anywhere. Cause at the end of the day, A business is worth what someone will sell it for and what someone will buy it for.

That's how the value is determined. so yeah, it's all about mindset. 100% [00:36:00] agree.

Jeffrey Feldberg: Terrific. What a terrific insight. And just from the trenches and putting all this into play to get that going and for our listeners, Again, Jonathan is saying the same things that we're saying that you should be doing. Don't be argumentative. Have that winning mindset. Be of service, solve other people's problems because they're gonna solve your problem and help you get to where you wanna get to.

And so, Jonathan, as we begin to wrap up just before we do, and we'll have our wrap up question, I'll tell you all about that. One of my favorite questions for someone who's listening to this and says, okay, Jonathan, I've been on the fence. About buying companies for organic growth, but I'm hearing you talk.

I like that you have a system, and now I'm much more open to it than I was before. For every episode, we like to have one actionable item, so before they go to the next email, their phone call, their meeting, whatever it's gonna be coming out of this episode, maybe it's going to your YouTube channel and learning more about the Dealmakers Academy, or maybe it's doing something.

What would be one thing? Coming outta this episode that they could do that would begin to pick up their game, their [00:37:00] skillset for buying a business.

Jonathan Jay: Yeah I think the fastest way to learn something is from people who've already done 

so if you go to my YouTube channel, so just type Jonathan J into YouTube. And there's about 170 videos there all about buying a business. Subscribe to the channel and tap the notifications bell because I release two new videos every week, Monday and Thursday, every single week, two new videos.

And those videos will help you decide, number one, whether this is right for you. Number two, whether I can help you. But. Regardless, you are gonna find so much good content on that channel. I interview people who've done multimillion dollar deals for their very first acquisition. I interview people who've come outta corporate life, never owned a business before, bought their first business.

People who were unemployed, they didn't have a job. And then a year later owned a 7 million a year business. so many great [00:38:00] examples. And they're all on the YouTube channel, so if you get onto that, I'm told that people start watching and they can't stop. 

Jeffrey Feldberg: I love it. It, is the Netflix of buying businesses. Absolutely love that. And Jonathan will make it even easier. You have an easy name to remember, but if they go to our show notes, they'll click on the link. Boom, it'll take them right to your YouTube channel. So all that said, let's begin to wrap this up.

You've been incredibly generous with your insights and your stories and your wisdom. So let me share this question with you and I really have the privilege and the honor for every guest on the Deep Wealth Podcast to ask this question. So when you think of the movie Back to the Future, you have that magical DeLorean car that can take you anywhere to any point in time.

So Jonathan, this is now the fun part. It's tomorrow morning, you're looking out your window, and not only is the DeLorean car curbside, it's waiting for you and you alone to hop in, and you're now gonna go to any point in your life, maybe Jonathan, as a young child, a teenager, whatever point in time that would be.

What would you tell your younger self in terms of life [00:39:00] lessons or life wisdom or, Hey Jonathan, do this but don't do that. What would that sound like?

Jonathan Jay: Absolutely. So I would tell my younger self, to stop worrying about what other people think and believe in yourself and grow your confidence, because I think that for all of us, we've got areas of our life where we don't have as much confidence as maybe we could do. And if we grow our confidence, we become unstoppable.

Because the difference between the successful people and the people who don't quite make it is confidence. It's not. Education. It's not knowledge, it's not intelligence. It's just doing stuff and doing stuff requires confidence. It requires self-belief. The person who goes for the job interview and the person who says, oh, I won't get the job anyway.

It's not even point going. The person who starts the business and the person who just keeps thinking about it, the person who goes and buys the business, or the person who just thinks, oh, one day I'll do it. That is the [00:40:00] difference. The key difference is confidence, and I would do everything to help my younger self.

because I was not a confident child. I was not a confident teenager at all, and that is exactly what I would go back and change.

Jeffrey Feldberg: It's such wonderful advice, and really, Jonathan, when you think about it, more timely than ever, because I don't want to get on my social media soapbox here of how it's really depleting our confidence and the fear of missing out, and we're seeing all these reels of really fake lives of what's not really happening.

We're made to believe is happening. But you're also right. When we believe in ourselves. That's where the magic happens. Taking that risk, asking those questions, oh, you know what I'll, I'll do it anyways and if I fall flat in my face, I'll learn from it. I'll pick myself back up and get back out there.

But what if you don't? What if it actually works out, you're the better for it. So I absolutely love that wisdom, and I think I know the answer to this one, but let's not assume. So for the listeners, would it be coming to the YouTube channel or to the Deal Makers website? Where's the best [00:41:00] place online for people to really get into you?

The system.

Jonathan Jay: If you go to the YouTube channel in the video description of every single video, just pick any video in the video description there at the top of the video description, there's always a link, and the link takes you to a free training course. So if you like what in the video, like what you've heard in this interview, take the free training course, it's about 45 minutes.

It's all online. It's all video, and that will give you all the starting principles that you need to decide whether this is for you.

Jeffrey Feldberg: Terrific. While you have it straight from the deal maker himself, it doesn't get any better, right from the authority. Jonathan, it's official. This is a wrap, and as we say here at Deep Wealth, really a heartfelt thank you for your wisdom, your insights, and may you continue to thrive and to prosper while you're saying healthy and safe.

Thank you so much.

Jonathan Jay: Thank you so much as well. 

Sharon S.: The Deep Wealth Experience was definitely a game-changer for me. 

Lyn M.: This course is one of the best investments you will ever make because you will get an ROI of a hundred [00:42:00] times that. Anybody who doesn't go through it will lose millions. 

Kam H.: If you don't have time for this program, you'll never have time for a successful liquidity 

Sharon S.: It was the best value of any business course I've ever taken. The money was very well spent.

Lyn M.: Compared to when we first began, today I feel better prepared, but in some respects, may be less prepared, not because of the course, but because the course brought to light so many things that I thought we were on top of that we need to fix. 

Kam H.: I 100% believe there's never a great time for a business owner to allocate extra hours into his or her week or day. So it's an investment that will yield results today. I thought I will reap the benefit of this program in three to five years down the road. But as soon as I stepped forward into the program, my mind changed immediately. 

Sharon S.: There was so much value in the experience that the time I invested paid back so [00:43:00] much for the energy that was expended. 

Lyn M.: The Deep Wealth Experience compared to other programs is the top. What we learned is very practical. Sometimes you learn stuff that it's great to learn, but you never use it. The stuff we learned from Deep Wealth Experience, I believe it's going to benefit us a boatload.

Kam H.: I've done an executive MBA. I've worked for billion-dollar companies before. I've worked for smaller companies before I started my business. I've been running my business successfully now for getting close to a decade. We're on a growth trajectory. Reflecting back on the Deep Wealth, I knew less than 10% what I know now, maybe close to 1% even. 

Sharon S.: Hands down the best program in which I've ever participated. And we've done a lot of different things over the years. We've been in other mastermind groups, gone to many seminars, workshops, conferences, retreats, read books. This was so different. I haven't had an experience that's anything close to this in all the years that we've been at this.

It's [00:44:00] five-star, A-plus.

Kam H.: I would highly recommend it to any super busy business owner out there.

Deep Wealth is an accurate name for it. This program leads to deeper wealth and happier wealth, not just deeper wealth. I don't think there's a dollar value that could be associated with such an experience and knowledge that could be applied today and forever. 

Jeffrey Feldberg: Are you leaving millions on the table? 

Please visit www.deepwealth.com/success to learn more.

 If you're not on my email list, you'll want to be. Sign up at www.deepwealth.com/podcast. And if you enjoyed this episode, if it added value, if you walked away with some new insights and strategies, please leave a review on your favorite podcast channel. Reviews help us reach new listeners, grow the show. And continue to create content that you'll enjoy and as we wrap up this episode as always please stay healthy and safe.