Deal Makers TV with Jonathan Jay – With Andy Doyle (Episode 1)

(upbeat music) – Hello and welcome to
The Dealmaker’s Academy. I am Jonathan Jay, and
every week I’m going to be interviewing professional
dealmakers, successful dealmakers, people who buy businesses for a living, and professional advisors. We’re gonna be giving you
the information that you need to buy a business successfully. Today we’re talking to Andy
Doyle from We Heart Digital. Now when I first met Andy two years ago he told me that he’d
love to buy a business, but he wasn’t sure whether
he would have the time. Now fast forward two years and
in the last 12 months alone Andy has bought three businesses. Now what we’re going to do
today is find out how he did it, how he found the deals, what he’s learnt, what he’s learnt from working with me, and the takeaways that you can use to go out and buy a business yourself. So welcome Andy. – Hi Jonathan. – So first of all, let’s
start with a takeaway here. What can our viewers today
learn from your experience and from you and I working
together to buy businesses, what’s the big idea that people can take away immediately from this? – I think the big idea and
the really quick thing is anybody can do it and
it’s just getting started and finding business owners who really want to sell their business
an being approachable. So contacting them and asking the question is the number one thing
to do to get started. – So actually putting yourself out there, being proactive, doing
something rather than nothing. – 100%, 100%, there’s
nothing to be nervous about asking someone if they want
to sell their business, and a lot of people
take it as a compliment. – Absolutely, it’s interesting actually that your starter tip isn’t an accountancy one.
– No. – Isn’t a legal one.
– No. – Isn’t a due diligence one, because all of that really comes later in the process doesn’t it? – And that’s exactly it, that’s all a process you start to follow once you get to a point of
actually having a conversation with someone about their business. – So let’s start at the beginning, when we first met, I think you saw me speak at an event.
– At Heathrow, yeah. – We chatted briefly afterwards, I recall. And then you joined the program. What was going through your
mind at that early stage? – At that stage I was,
before that I was trying to sort of think how
I can grow my company. And the thing which really struck me is when you sort of said, instead of growing a company, buy a business with an existing
team, existing clients, and existing structure,
and accelerate that growth. That was the number one
thing where I thought, actually that makes sense. – So rather than just
writing more adverts, hiring more salespeople,
having a good year, having a bad year,
taking one step forward, two steps back.
– 100%, 100%. – Let’s go and find a business to buy and add x hundred thousand or x million revenue.
– Exactly. I mean the first one we
bought, double turnover. – Oh really, right, I didn’t
realize those were the numbers. So you actually double
the size of your business with the first acquisition?
– Yeah, 100%, 100%. – Very interesting. So when we started working
together I know that you did say, on several occasions, you weren’t sure whether you
had enough time to do this. And that was what was
standing in your way. But clearly something must have happened because you’ve made three acquisitions in the last 12 months. So what was the shift in mindset for you? – The mindset was come in every month to the meetings in the days
with you and the whole group and seeing more and more
people puttin’ their hand up, and then actually sayin’ to
myself, I’m gonna commit that before we come to the next time I’m gonna send out 1,000 letters. That was my commitment. – ‘Cause this is following
the process that we use to generate deal flow. – But I was almost gettin’ to the point I felt embarrassed sittin’ there being one of the ones who
doesn’t put their hand up. So I made a promise to
myself I was gonna do it. And so I got the list, went
through it meticulously and sent out 1,000 letters. And that started the ball rolling. – Very good, and I remember
that the very first meeting that you came to someone put their hand up and said that they bought
their first business. – Yep, she did, she came in and it was, everybody felt sort of shocked. They were like, “Really? “You’ve just bought it?” She bought an online,
was it an underwear shop? – Yeah, yeah, yeah.
– Ladies’ underwear shop, something like that, yeah. And she was like, “I’ve just done it.” And we were like, “We haven’t
even started the course yet.” (laughing) It was quite dynamic, she was quite dynamic.
– A very dynamic student, absolutely. So watching other people created almost a sense of peer pressure I suppose. – Peer pressure and confidence. Chatting to people in the
break times and stuff, and when you said, and them saying, actually, you send out the
letters, you speak to people, and people are just generally really nice, and we all like talking to nice people. So it was like, what’s there to lose apart from just getting that letter out based on the template. – And you actually call your business The Nice Investor don’t you? And it’s the Nice Group.
– The Nice Investor, yeah, and Nice Group Limited,
that’s what we set up. – Very good. So you went out to look
for businesses to buy. Give us some numbers so
we can get a sense of did you go out to hundreds
of thousands of businesses? Or five businesses? I mean, what were the numbers. – So I had a list of
about 10,000 businesses, which I purchased. And then I filtered that list
into ones in the size I wanted and location I wanted them
to be in the southwest. And then I basically took 1,000 of them. So I sent out 1,000. From that very quickly
whittled it down to 20 who I wanted to speak to
’cause I didn’t want to be running all over the
place speaking to people. And that was phone calls,
following the process. So I spoke to 20 on the phone. Straightaway from that within
one minute of the phone call you knew in your head it’s a no. And I think the big
learning curve there was quickly think to yourself no, rather than oh it could be a yes. – Well this is interesting
because when people start off on the business-buying journey, they often spend a lot of
time talking to people, the business is never gonna happen. The deal’s never gonna happen. It’s never gonna go anywhere. But out of being polite they spend 30 minutes on the phone with someone, and really it’s not helping anyone, is it? – No, it’s giving people a false hope that their business is
viable and sellable, and it’s just taking time which is the precious part of it. So, and I did a couple of those where I kept talking and talking and after a while I got sort of, I don’t think this is for me, but good luck with it sort of thing. Just be polite and not burn any bridges. So from that we got it down to, from the 20 we quickly went to 10, and then I can’t remember is
it five or six I met with? And from those meetings
we got down to three, which we were gonna buy three. And now, at the end of that
we bought two of those three. – Very good, and then
the third one followed. – The third one came later
just through talking about where you’ve bought businesses, and someone basically was like, oh, I was thinking of selling my business. – See this is interesting,
yeah, I see this a lot where success breeds success. So the hardest business to
buy is the first business. And once you’ve got that everything starts to fall into place because you’re taken seriously aren’t you? People perceive you differently. – [Andy] And it’s not a whim, yeah, it’s not a whim.
– Yeah, you’re not just a guy with an idea, you’re someone
who’s actually doing something. – [Andy] And you’ve got the terminology and you can talk them through process and make them feel comfortable. That’s the big thing. For the second one that
was what it was all about. I could really go, this is what
will happen in this process. Are you okay with that? – Because you’d already
done it and you knew exactly what was going to happen.
– 100%, 100%. – And I think that confidence makes a huge amount of difference, doesn’t it? – Yeah, definitely yeah. It’s, I mean, there’s
nothing better than actually getting out and doing something rather than thinking
about doing something or, and like you said, the first one, it was a bit of a walk in
the dark in certain times, but after that you just get an instinct or a feeling from it. Even that quickly after one. I mean, can’t imagine what it was like when she bought 20 or 30. It must be snapped decisions very quickly. But we’re much more
structured in form with it. – And also, you have in
your mind the process. I mean, I think I would
have taught you the process, but until you actually
put it into practice, there’s parts of it, it’s like
teaching someone how to swim. At some point you’ve gotta
jump in the pool, haven’t you? – Exactly.
– You’ve gotta get your feet wet.
– You’ve gotta get in there, get wet, and not drown basically. – Yeah, absolutely, it’s good even though
that there’s a lifeguard standing at the edge of the pool – Exactly.
– To grab you back out if you’re heading for disaster. – 100%, and having the people
’round you, so acronyms. The world’s full of acronyms
in this sort of stuff. So, just once you know
more than others on that you become an expert, don’t you? If you know this and you
haven’t told them that yet, you’re the expert because you’re telling someone something new. So just having a team so
when you can off radar say, “What does this actually mean? “What does that mean to me?” And then going back and
speaking confidently about it. And then the second time,
you already know it. – Absolutely.
– So when they ask you you just go, you can give
the answer straightaway, and that really just
keeps it going and moving. – What I always say to people is that if you know more about buying a business than the other side know
about selling a business you’ll be okay.
– 100%, yeah. – However, if they know more
about selling a business than you know about buying a business, then you’ll be at their mercy, and that’s when you end
up with a poor deal. – Yeah, I think so, definitely. And I think the sellers, the pattern is generally they
think it’s better than it is and they try and be like, I’ve
got lots of people actually rang me randomly to buy my business, and that sort of conversation starts. And you know that’s just,
that’s a conversation, and you’ve just gotta sort of like, yes, I understand that, of
course I understand that. Whether it’s true or not is
irrelevant (voice muffled). You just have to be
agreeable and push forwards. – So it’s about building rapport. – 100%.
– A relationship. Because, as I always say,
if they do not like you they will not sell you their business. – Exactly, in the same
way if you don’t like them you won’t buy it, right? – So I always explain to people that there are four sections
to buying a business, four elements. The first is knowledge. You’ve got to know what you’re doing. Quite clearly, and the more
you know what you’re doing the better deal you get. Secondly is the confidence. You’ve gotta have the confidence
to be able to sit down with the seller of a business, look them straight in the eye, talk about money and all of those things a lot of people don’t like talking about. And the third is the deal team. You can’t do it all by yourself. You need to have the team to support you ’cause that also gives you the time, because your lawyer can do the legal work, your accountant can do the
financial work and so forth. And finally, deal flow, so the deal flow, the deals that you’re talking to, because you never want to be speaking to just one person.
– 100%, yeah. – So if we take each of
those four elements in turn, what have you learnt working with me about each of those four that someone watching this who’s maybe just starting out would find useful? – So to take knowledge, for example, I think working with
you, it was really clear that there’s a process to this, and you can follow a process, and that’s, that gives
you the knowledge to go, we need to meet people,
we need to send letters, we need to meet people, we need to quickly remove
the ones we don’t want to, we need to quickly talk about a structure of a deal to people, and get that done quickly to know if there’s proceeding to the next bit. So I think the knowledge there and then actually doing it with people, and some fall at the wayside beforehand, and that’s fine, too. I think the more times I did that the more I could talk
in someone’s language and make them feel like
we do this all the time, that concept, so I think
that’s one of your lines. We do this all the time ’cause you do. You are doing it all the
time once you’ve got it. So I think the knowledge from that process and then just going
out there and doing it, just pushes it forward, pushes it forward, and makes everybody feel comfortable. – Confidence. – It’s a similar thing, really. The confidence just comes from
being able to ask questions. How much do you want for your business? What’s your timeline for this? Can I speak to your team? When can I speak to your team? – Do you think that’s helped
by having a series of, for want of a better word, scripts or checklists or bullet points that you can,
– 100%. – You’ve either got in your
head or you’ve got on your pad and you can refer to? – There was 15 questions, I think, you gave us originally to
ask for the phone call. I took those questions,
I used them as a template and put them into Andy
language, I suppose. And then I followed the same questions for the face-to-face meeting, in a way, because people can say
when they’re gonna phone, you write the notes, and then
when you’re talking to them you think actually how serious are they? So you let the conversation flow, but you always bring it
back to those questions. And the thing I think after
three or four meetings I did was start the meetings by framing them, as in, this is what
we’re gonna talk about, and this is gonna be the
outcome of the meeting. So everybody knows how
comfortable they feel at the start and end. And that whole concept
it’s okay to say no to me. I’d rather you say it now
than in two months’ time. So that was the confidence
being able to say– – So the confidence comes from
having knowledge, I suppose, as well, doesn’t it?
– Yeah. And that leads directly
into the deal flow. If you can say to someone,
it’s fine for you to say no and we shake hands and walk away, ’cause in your head that’s not game over, you just move on. And that’s a good (voice
muffled) for the flow part. I think that’s the key for all of it. You said it time and time again to us, but when we were talking to 20 companies, and I’d probably say over half of them were keener than I was
on them at the time. But knowing there’s all these ones and there was a couple
of really good ones, that flow really just
gave you the confidence to think, actually,
this isn’t right for me. And it’s a learning curve. And I think there was one point
where I’d whittled it down and I was getting a
big worried about that, and then I probably felt I was being more, but that sort of concept, so as it starts to drop and
you start to filter people off, bringing people back in. – Yeah, you need to be always replenishing the side flow don’t you? It’s like marketing a business. Quite often people stop
marketing when they’re busy, but actually you should
be marketing all the time because when you get quiet that’s the last time you want to be marketing. – ‘Cause it might be a six-week lead time. – Exactly, yeah. So you wanna be generating
deal flow all the time. So we’ve got deal sourcing
activity happening on a weekly basis because we need to be constantly replenishing
our funnel of deals. – 100%, and for me I
had an outcome I wanted. It was the three businesses in 2019. So I had to keep that flow going until I knew I was gonna get
to those three businesses. You know, obviously I’ve stopped that now, and then I’m gonna restart again and make that decision on
what do we need to do in 2020. Is it three? Is it five? Is it eight? I’m probably gonna be more. – I like that ambition.
– Yeah, exactly. – And deal team. – The deal team I think was
the most critical thing for me. I mean, I was lucky, I’ve got a very good
relationship with my accountant. And he’s up the road from me so we were constantly sat together. I mean that was the big thing. He was by me, I sat with
him, I worked with him. He came up with the structures. He did the due diligence,
stuff I couldn’t do. And the same with the lawyer. He put, the accountant actually put the heads of terms together. The lawyer then put obviously a SPA, the self purchase agreement together, I’m doing the acronyms now. But just having that
relationship between that. And them two together, making them talk. So to summarize, it’s the knowledge, it’s the confidence, it’s the
deal team and the deal flow equals successful dealmaker. – 100%, 100%. – So let’s move the process
forward a little bit. So we’ve found the businesses to buy, we’ve got that rapport
and that relationship, and I talk a lot about structuring deals in a way that limit your exposure. That means that you’re not
refinancing your property, signing personal guarantees,
and signing your life away. Tell us, as far as you’re able to without breaching any confidentiality, how you structured the deals, so we can get a flavor of how you de-risked the transactions. – Okay, so the one deal
was, the first one, was structured that there
was a small amount up front, that that was taken out of
the business on completion. So the business paid
for the upfront deposit, and then it was structured of equal payments over four years. And that comes out of the business. – Okay, now it’s a bit
of a leading question, and we both know the answer, but I just wanna make sure
that everyone watching this is clear on this. So you bought that
business without utilizing any of your cash. No cash was left in of your own. – No, no, no, we didn’t
pay any of our own cash in. – And was this the first deal? – That was the first deal. – So this is the one that
doubled the size of your company? – 100%, yeah.
– Great. – So yeah, so that was done. And that’s what we’re
doing now every month. The seller now gets a payment, and that comes out of the business itself, out of the profits. We’ve increased the
profit in the business, so it’s all positive on that sense. I think with that one we did pay some of the solicitor’s fees ourselves, just because we had some cash to do it. We could have easy then just– – Well you could invoice that back out to the company at a later date. – But the accountant
was like, that company, that group, you’ve made
a group of companies that actually doesn’t
make you any difference. It doesn’t really matter, he said. It’s just a paperwork thing. So that was just a
conscious decision, really. So that was the first one. The second one, was a different animal. It was a business which wasn’t
as big as the first one. And it had some issues, he says, candidly. So we bought that one for zero money. Like, nothing. – Oh right, so it was a one pound deal? – Yeah. – But there was no consideration deferred? No earn outs, nothing.
– Nothing, no. – Okay, so presumably you took over the liabilities of the business. – Yeah, yeah. – Okay and have you managed those? – We’re managing them
and dealing with them. I would probably say in
hindsight it’s probably, it was really a bigger
thing than I wanted. And I’ve learned some
stuff about due diligence, which is fine.
– Okay. – Nothing terrible, but there’s just, each time you do something
you gotta look at the positive of what did I learn from this? And there’s stuff which lawyers and accountants can’t pick up. There’s stuff you need to go in there and do yourself by speaking to people. – Yes.
– And I think we probably didn’t speak to people in the team enough on that one. But that’s okay. It’s all okay. But like the risk is negligible because we didn’t spend any money or anything on the business. – To bring it back to what many people do when they buy a business, a
business broker encourages them to go and borrow the money, – 100%.
– Maybe use the house as security. Maybe there’s some
equity in their property that they can release. And they give all that
money to the seller. And then they’re left with the business. And if they uncover things
later that they don’t like, well, it’s too late isn’t it? – You’ve spent the money, yeah. So, yeah, exactly that, so
we haven’t done that. (laughing) I’ve got small children,
I’m not risking my house. – Of course. – And the third business, which we’re just about completing on that, that’s the, in terms of
perceived value of the business, it’s probably double the
other ones, the first one. But again, I mean, this one’s even, we’re not spending a single
penny of our own money. There’s no deferred consideration. It’s all coming out of
assets from the business. – Oh so you’re refinancing the assets? – They’re not physical assets. They’ve got money in the bank, and there’s some tax returns coming back within 12 months which we said that will go back to the sellers as well. But even, in this one
even solicitor’s fees, finder’s fee, accountancy fees, are all coming out of the
business before completion. – Very good.
– So, it’s nil. Exactly nil. Just time. – So how do you feel now
after doing this three times? What’s the, what difference
has it made to you as a person as much as to the business? – As a person, I think, it’s funny, I met a guy I know who’s
a bit of an entrepreneur, and he comes from a
family of entrepreneurs, and we were chattin’ about businesses. He actually asked me if I wanted to look at his mum’s business. And I was chattin’ about this and that. And his words to me, “Wow, I never heard you
speak like this before.” And I was like, “What do you mean?” And he was like, “You
just get it, don’t you?” He was just like, “You just get it now.” ‘Cause we were talking about
process and stuff to him ’cause it’s his mother, right? And so that was quite a
nice thing he said to me. But just generally as a person I feel, it’s funny, up until the start of this I always felt like I’d been
making it up as I go along. I had my business, I’d grown it a bit. We were doing quite well. But you sort of feel like you
made it up as you go along as if someone starting
a company from scratch. But now I feel, I suppose
more like a business guy. – You’re a better businessman?
– Yeah, a better business guy. I can understand stuff. I’m looking at more structure of the businesses just naturally. Yeah, and just trying, and everything’s just
running a bit better. Making bigger decisions in a lot quicker and more efficient way. – Would you say now that you
think more strategically? – Yeah, definitely.
– I think a lot of business owners get so
caught up into the detail of the operations you only
ever think tactically. You think about today’s problems and tomorrow you think
about tomorrow’s problems, and you get to the end of the month and you’re actually no better off. You’ve just been solving problems. – Firefighting, yeah.
– I guess what we do, yeah, firefighting, so I guess, when we buy businesses
we’re solving problems, but we’re also solving bigger problems, and if we can double
the size of our business with one transaction, it sounds like this third
transaction’s doubling again. – Yep. – Then we can make huge leaps forward, which we could never do if
we were just in the business on a day-to-day basis, fixing the problem with the
photocopier and the CRMs– – Moaning that the dishwasher
hasn’t been emptied. Things like that. Yeah, so I think with my
existing business I had I sort of taken a different role. The team are now, we’ve
actually restructured the team in this process as well, so, so there’s people doing
the day-to-day management, the day-to-day operations now. And it’s running more on its own, and I’m sort of dipping in and out and doing more of a client-focused role For the other businesses it really is more hands off at the moment. So they are, they just
deal with themselves and I get involved when they
ask me or when they need me to. All the clients have my phone number if they wanna talk to the boss, and it does make you
realize that you don’t have to be in there doing the
day-to-day every day. You can focus on the bigger picture stuff and actually focus on sales
if that’s what you need to do. – So you’ve got three businesses in three different areas.
– Three towns. – Three different towns. What are your plans to consolidate? – So we’ve just gone through
planning at the moment. We found these beautiful
Georgian buildings, about two and a half thousand square feet. And we’re gonna put all three businesses in the one building. It’s, we worked out it saves about, and this is the strategic thing isn’t it? It probably saves between
40 and 50,000 pound a year in terms of business
rates, telephony, internet, bills, utilities. And it also means I can spend
more time in the offices with all the people, and the teams, they’ve all got complementary skills. They start to naturally
work across each other and help each other, you know? So they’re already
positive for it as well. They’re all really looking forward to having this bigger team
of engineers and designers and creatives all just
working together to create. I think everything we produce after that point would be better. So, with three businesses
in three different towns, I guess you were going
between the three of them. – Yeah, I’ve racked up quite
a few miles on the car. And just spending a lot of
time just sat in the car driving around and not doing
a great job, to be honest. Because you’re not focused. I’m not in the office
talking to customers. I’m not in the office
talking to the staff. I was sat in the car for
two hours a day every day. – Oh my, that long?
– During the day, so it wasn’t a commute in the morning. It was 11 a.m., driving to another office. – So by putting them all
together into one building, you’re saving money. – Saving money, saving on outgoing, saving on time, and there’s
space in the new building to grow, to bring another
business in if we need to. – And how long’s your commute now? – It depends if I stop for a coffee. I reckon if I get a coffee
it’s 30 seconds, it will be. If I get a coffee. If I don’t get coffee I reckon 20. – That’s pretty good. – And a flat walk. Where I currently do it it’s on a hill. This is a nice flat walk. (laughing) And it’s on route to my children’s school. So it’s actually quite
a nice little set up. – So really in the two years that we’ve, well actually it’s less than two years that we’ve known each other, but we worked together for 12 months. An awful lot has changed hasn’t it? – Completely, completely, it’s, yeah, the whole mindset is
not the, you don’t feel like you’re the microbusiness,
having to do everything person. It’s now a structured group of companies, and you’re across the
structure of companies, and looking at the bigger
picture and thinking, what’s the next stage of growth rather than did we deliver
that thing last Friday? – So you’re starting
to think strategically. You’re thinking bigger,
you’re not thinking tactically and operationally on a day-to-day basis. So what’s the plan? Is it to buy another business, to buy another business, to
keep on growing like this? – So the next plan, we’re
raising an investment for another separate
company at the moment. But again, it gives you
confidence for all that as well. And then it would be bringing
in an MD into the group so then I’m, there’s someone who runs it, probably can tell me what to do, right? ‘Cause they’re the MD and
they run it day to day. And then that can carry on
growing as we’ll probably, after Christmas, probably
have another round of, ’cause January I remember
working with you, and you said January’s a good time to start the process again. – It’s a very good time
to start a process. – I my head I’m thinking
January I might reach out to some more businesses
and see what’s what. And again, walk away
if there’s no good ones and if there’s some good
ones we’ll find them and see about growing, getting another team in
and more projects in. So that’s the plan. So an MD running it day to day and then I can go out
looking for this stuff. – I don’t want to labor the point, but if we hadn’t met at that event in Heathrow, and you hadn’t gone on a
business buying journey and you just stayed operational, what would things have looked
like then, do you feel? – I’d have still had the
existing business I had. I mean, who’s to say. I think it would have probably been just carrying on as it was
for the 12 years before, just growing a bit. And small team working on projects, and yeah, and just be
day to day on it really. It wouldn’t, we wouldn’t
have the 20 more customers we’ve got for this, and
they’re big customers, for this one business. We wouldn’t have the
ability to get this contract for this huge company which I can’t say for the next new business. The potential that’s come
from this is probably bigger than I’m even thinking right
now as I’m talking to you. – Fantastic. So if people want to get hold of you to find out more about what you do, so quick 30-second advert for yourself. Your main company does? – We Heart Digital, we
make websites and apps. We do a lot of event-based
work and touch screens for large and small companies. is the URL. And we’re always looking
to make really creative and really sort of
interesting projects, really. That’s our focus. – Fantastic, Andy, thank you. So that was Andy Doyle. Andy has shown us how it’s
possible to buy a business wherever your starting point. All you’ve gotta do is have some focus, know that you want to achieve something more with your business, and I think what Andy’s story has shown us is how you can take a business that’s been running for 12 years and has been pretty
steady for those 12 years, and just through one transaction, double the size of the business, and then just keep on doubling it time after time after time. So next week we’ll be
meeting another deal maker. Until then, goodbye. (upbeat music)

2 thoughts on “Deal Makers TV with Jonathan Jay – With Andy Doyle (Episode 1)

  1. Great video. Please do more. Your podcasts are also great…๐Ÿ‘๐Ÿผ

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