A lot of entrepreneurs must make the build or buy decision when thinking of owning their own company. Do they want to start from scratch as a founder or pay someone else for their business? With company valuations down, this may be the year that you can buy that small business at a low price even with someone else’s money.
On The Small Business Show this week, I talked with Jonathan Jay who 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 UK over the pandemic. Jonathan is now passionate about sharing his life experience to help others successfully buy businesses through his consultancy, Dealmakers.
I discussed with Jonathan on the radio interview:
Why, in his opinion, buying a business is faster than starting a business from scratch. (Hint: Jonathan believes its harder to go from nothing to $1M than from $1M onward.)
Jonathan’s secrets to finding the best business to buy that has the highest probability of being successful in the future. (Hint: One that already has a management team.)
Why to never buy a business that is built solely around the founder where the make all the decisions. (Hint: According to Jonathan, then you just bought a job and not a business; plus, a founder is hard to replace!)
How to buy a business minimizing your own cash. (Hint: Pay the seller largely for future performance i.e. earnouts, and not when you first close the transaction.)
How Jonathan did 48 acquisitions in less than 3 years during the pandemic in an industry that he knew nothing about. (Hint: Having an experienced team in that industry helps.)
If you are interested in buying a business this year, listen to the entire interview on The Small Business Radio Shoiw with John Jay.
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Image: Jonathan Jay