Episode 137: Strategies to Create Wealth Through Buying and Selling Businesses with Jonathan Jay – Transcript

Episode 137: Strategies to Create Wealth Through Buying and Selling Businesses with Jonathan Jay

Rennie Gabriel  00:09
Hi folks, welcome to Episode 137 of the Wealth On Any income Podcast. This is where we talk about money tips, techniques, attitudes, information, and provide inspiration around your business and your money. I'm your host, Rennie Gabriel. In past episodes, we spoke about how to understand the numbers from your business, how to measure the level of pleasure based on where you spend your money, how to track your money in 5 to 10 seconds, what determines how close you are to Complete Financial Choice®, and how to run your business without being in your business. And last week, we had Jackie Bailey, the best-selling author of four books, who is known as the international conversation coach for kids. Today we have as our guest, Jonathan Jay. Jonathan has been successfully buying and selling businesses for over 30 years. A group of 48 acquisitions formed by Jonathan during the pandemic became the fourth largest group in the childcare sector in the United Kingdom. Jonathan is now passionate about sharing his life experience to help others successfully buy businesses through his consultancy company, Dealmakers. Jonathan, welcome to the Wealth On Any Income Podcast.

Jonathan Jay  01:35
It's wonderful to be here. Thanks for having me.

Rennie Gabriel  01:38
You're absolutely welcome to be here. And so you know, get an idea you buy and sell businesses and a little bit about why you do it, I guess. But give me a little bit more depth to that.

Jonathan Jay  01:52
Yeah, sure. So, many years ago, in the 1990s, I had a publishing business. And on one particular day, I will never forget it, someone approached me and said that they wanted to buy the business. And I never thought that was ever going to be possible that I would sell this company. And I did the deal. And I sold the business. And I made more money the day I sold that business than I had in the previous two and a half years of owning and running the business. So to put that another way, I'd worked very, very hard seven days a week for two and a half years. And then I sold it and I made more money than all that effort combined. And that opened my eyes to a different way of being in business. Because most people when they're in business, they turn up at the office every day, and they kind of do the same thing. And they have good years, and they have bad years. And they're very optimistic. And they say, Next year is always going to be better and quite often it isn't. But there's a different way of being in business, which is to become a trader of businesses. So you buy someone else's business, someone else's hard work, maybe you make some improvements, and then you sell that to someone else, and the uplift in value is yours. And that's a lot more fun and a lot easier than doing it all by yourself.

Rennie Gabriel  03:09
You betcha. One, you probably didn't know this, but I also had a book publishing company. I had it for about 10 years. And what I do with real estate is what you do with businesses. I would buy apartment buildings that were mismanaged and had deferred maintenance, turn them around, and we would sell them after a few years and made oodles of money from that. Yeah, so you take an asset that can be improved, you improve it, you sell it, yes, and it can be very rewarding financially. So absolutely.

Jonathan Jay  03:44
And it's a great sense of achievement as well. And I see business owners who have maybe become a little jaded by business, start to realize that they can buy businesses and sell them. It adds a whole new aspect to the world of business. And I've seen people get into business, instead of starting something from scratch, which is hard, headaching work that doesn't always prove successful, instead, buying an established profitable business and kind of hitting the ground running with a product, a service, marketing that works, staff, offices, and cash flow. They get cash flow from day one.

Rennie Gabriel  04:25
Yes. And they also have the customers from day one as well. 

Jonathan Jay  04:30

Rennie Gabriel  04:30
Yeah. You're probably aware that I donate 100% of the profits from the work I do supporting other people and how to handle money powerfully. Tell me about a cause or a charity that's important to you. 

Jonathan Jay  04:44
Over the years we have raised money for Great Ormond Street Hospital, which is a children's charity and very well known Children's Hospital in London, does some incredible work. More recently - I have a seven-year-old daughter and I put a lot of time and effort and contribution to her school and contribute to her school. It's a good school a girls school here in in London. Does a lot of good work and I can see the very positive effects on my daughter.

Rennie Gabriel  05:19
Well, I mean, those are two excellent causes. You're talking about healthcare, and you're talking about education. So thank you for that. It. Do you have a specific target market, or markets?

Jonathan Jay  05:33
In terms of businesses that I would buy?

Rennie Gabriel  05:35

Jonathan Jay  05:36
Yeah. Okay. 

Rennie Gabriel  05:37
Or, I mean, you're talking about supporting people to buy businesses, well, who are the people who are buying businesses?

Jonathan Jay  05:45
Yeah, so 50% of my clients are in the UK, and 50% are all around the world. A lot in North America, Canada, and Australia. So English-speaking countries. And they come from all walks of life, all different backgrounds, all different ages. We have people in their 20s. We have people in their 60s. We have everything in between. And every single one of them has the same drive and ambition, and that is to create freedom by becoming financially free. And the fastest way to do that typically is in business of some description. And the fastest way to be in business and to make money from business is to buy a business that's already making money, rather than risking a startup where you can spend three years putting money in and get nothing back out at the end of it. So I've got clients who have businesses already that want to grow via acquisition. And I have clients who work for other people and want to get out of the rat race, get out the 9-5, and do their own thing. And this is their route to that financial freedom.

Rennie Gabriel  06:58
Got it. Okay, well, the next question is a two part question. It's to look back and tell me what was your biggest . . . I use the word failure, and some people actually correct me, say, 'No, it was a challenge'. But tell me, what was the biggest challenge or failure from your past? And what insight did you gain from it and use?

Jonathan Jay  07:22
Oh, that's a really good question. It's actually quite recent. So during the pandemic, I bought 48 businesses, I had 5 in that sector already. So making 53 distinct businesses. And it was a an incredible success story of acquisition. We did some amazing deals. We moved faster than anyone else. All of our competitors were private equity backed. We didn't even have a bank overdraft. So we ending up using the techniques that I teach other people, but I got very involved. And I'm someone who likes to get involved. But when you've got 40, 48, plus the 5 plates that you're spinning, you know, the people who spin the plates, and if you don't spin this plate over here enough, this plate starts to wobble. And I was driving all around the UK, keeping the plates spinning, and the stress started to build up. And it built up over a number of years. And then I was getting stomach pains that were so awful that I went to my doctor, and I'm one of those guys that doesn't really ever go to the doctor, unless it's really, really serious. So I went to the doctor. The doctor immediately put me into hospital for a colonoscopy, which is not the most enjoyable procedure. But they didn't discover anything. They couldn't find anything physically that was wrong, despite the fact I couldn't stand up straight. I mean, I was in agony. And the conclusion was that it was stress. And my father had a heart attack around the same age that I am now. So I'm very sensitive about this. As I said, I've got a seven year old daughter so I've got a lot to live for. And I had to make a decision. Do I continue with this business that really is causing me physical harm and mental harm, I suppose? Or do I say, yeah no, I did my bit, I did the acquisitions, now I'll back out and let other people run it. And that's exactly the choice that I made. So my business partner, I had a business partner in this business, she took over everything and I wished her luck. And then I could sort of not look at emails all day long and not have my phone in my hand all day long, spend some time with my daughter and actually enjoy life a little more. So in some ways, it was a huge success. I built the fourth largest group in the UK in about two and a half years. In other ways, though, I discovered that I'm not as resilient as I thought I was. And I thought I was bullet proof that nothing could ever get to me. But no, I now understand and know my strengths and my weaknesses.

Rennie Gabriel  10:06
Beautiful. And one of the things that I learned from a similar experience, when I had a level of stress that took me to the hospital and found out, there was no physical ailment, and what I walked away from that experience with is that you can tell yourself, whatever it is you want, however, your body will not lie to you.

Jonathan Jay  10:29
Yeah, no, absolutely. And I remember one morning, getting out of bed, and holding on to the wall. I was in a hotel, holding on to the hotel, and I was holding on to the wall, and I was thinking, I am going to collapse. This is like, and I'm thinking, if I collapse here, when is someone going to find me? And I thought this is not what I should be thinking. No business is worth that. So part of my educational program now is not just buying businesses, it's how to establish that management team, so that you don't get hit with all the day-to-day stuff that really causes the stress, and also how to deal with everything emotionally. I didn't sleep well, for years. I was taking sleeping tablets every single night. I ended up going to see a therapist, which was wonderful, it was just so good to get all this off my chest. I concluded that I'm pretty good at buying businesses. I'm generally pretty good at selling businesses. But the bit in-between, I don't really like that so much.

Rennie Gabriel  11:34
And it's funny as I'm listening to you, it reminds me of a quote that I created that I use over and over again. And it doesn't matter if you're building a business, or we're talking relationships or creating wealth. But the quote is, 'wealth creation is a team sport, not a solo sport'. And it sounds like a part of your discovery was that because you had your business partner step in and that allowed for a better lifestyle.

Jonathan Jay  12:05
Oh, yeah, absolutely. I mean, we had 375 staff, and that anyone who's had a lot of staff working for them, understands the pain I was going through, and yeah, I was living sort of several hundred miles from these locations. So it was always a little bit distant. And it was just, you know, just physically but mentally very involved. So yeah, it was an interesting experience. I decided I was going to take a year off, and then do something new and I'm already planning the next, the next venture. 

Rennie Gabriel  12:45
Well, okay, two more questions. One of them is, is there a valuable free resource that you can direct people to that will further allow them to connect with you and learn more about buying and selling businesses? 

Jonathan Jay  12:59
Yeah, absolutely - my YouTube Channel. So there's about 200 videos, just go to the Jonathan Jay YouTube Channel @thedealmakers, if you're wanting to find it quickly, @thedealmakers. You will find hundreds of videos all about buying a business. And what I haven't mentioned is my speciality is showing people how to buy a business without risking their own cash. So you can have an income, a job, a salary, a wage, and you might think you need millions in the bank to buy a business. You don't, you really don't. So I've got people who started off unemployed and less than a year later, I'm thinking of one person in particular, owns a $10 million per year annual revenue business, in one year from zero to $10 million plus a year. And he didn't put any of his own money into the deal, because he didn't have any of his own money to put into the deal. So anyone can do this.

Rennie Gabriel  13:55
Oh, fabulous, please email that link to me. And the last question is, is there a question I should have asked you, that would give additional great value to those who are listening? And I'm going to guess the question is, I mean, I realized, it sounds like it would be well, can anyone buy a business?

Jonathan Jay  14:16
Yeah, I was thinking along similar lines. You might think my answer is going to be yes because it's easy to say, Oh, yes. anyone can buy a business.

Rennie Gabriel  14:26
You just gave an example of someone who was unemployed. Yes. 

Jonathan Jay  14:29
Yeah, well, I'll tell you what you have to have. You have to have some ambition. You have to be ambitious. Because if you just want everything to stay the same, well, yeah, and you've also got to be prepared to change. I always say that buying a business is not actually about buying a business. It's about the person you become in the process of buying a business. You become more resilient. You become more professional. You become more expert. You learn a new skill set. You discover you can do something new never thought you could do. And I have seen people's lives change as a result of buying a business, not just because of the business, but because the person they need to become.

Rennie Gabriel  15:12
That makes sense. So if someone is able to realize the transformation and willing to take that on, yes, they can buy a business. 

Jonathan Jay  15:23

Rennie Gabriel  15:24
Thank you for being on the Wealth On Any Income show. 

Jonathan Jay  15:28
Well, thank you very much for inviting me. 

Rennie Gabriel  15:30
You're welcome. And to all of those who are listening, if you'd like to know how books, movies and Society programs you to be poor, and what the cure is, then log on to wealthonanyincome.com/TEDx, you'll hear my TEDx talk and can request the free 9-Step Roadmap to Complete Financial Choice® and Philanthropy, and receive a weekly email with tips, techniques, or inspiration around your business, or your money. And I would suggest checking out some of those videos that Jonathan spoke about. And if you'd like to see how you can increase your wealth and donate to the causes that touch your heart, please check out our affordable program, Wealth with Purpose. To my listeners, thank you for tuning in. Next week, we'll have Anka Herman, who went from a sewing business to a technology coach for online entrepreneurs. You can listen to the Wealth On Any Income Podcast on your favorite platform. And please rate review and subscribe. Until next week, be prosperous. Bye bye for now.

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