Buying a business is the fastest way to grow financially. You can increase your audience and also cash out at the largest number. You can make money from doing deals, not just from running a business. So how exactly does buying a business work and how do you do it without any extra expense?

On Friday 23rd September, we were joined on the Big Friday Finish by Jonathan Jay, CEO of The Deal Makers Academy, LIVE on YouTube! Jonathan has bought and sold companies, restructured groups, bought out competitors and successfully completed private equity. He has had 31 years of business experience and multi-million-pound exits with the sale of The Coaching Academy UK Ltd in 2007 and The Marketing Guild in 2017. Here is what he had to say about business acquisition:

How to go from a ‘doer’ to a ‘dealmaker’

Business acquisition is the fastest way to grow your business as well as your audience. If you are struggling with marketing, find out which companies have the customers you already want. If you can’t get the right team or management, buy them as part of the deal. If you are struggling to break into new markets, buy a business in the area your target market is based in. And if you are frustrated by your competitors – buy them out.

Buying a business that is already operating can save you a lot of time and money that you would otherwise be spending on starting a business from scratch. There are three ways to make money from business acquisition. The first is when you buy the business. If you over finance, you will have money left over. If you are lucky, you may even find yourself in a situation where the seller gives you money, rather than vice versa. The second is when you own it. Your profits will be much higher from a combined business than a single one. The third is when you sell it – especially if you can plan ahead when to do so and increase its value in that time.

The 4 golden rules of business acquisition;

According to Jonathan, there are 4 golden rules when it comes to buying a business:

  1.  Never use your own money – you will run out sooner or later. Instead, you need to be strategic and form strategic alliances that bring you more money for less work.
  2. Never run the business yourself – have an excellent management team who can strategically run the business. The goal you – and all business owners – should be aspiring towards is to turn your business into a commercial, profitable enterprise that works without you.
  3. Never take personal risk. This means not buying a business in your own name or via an existing business of yours. To reduce traceability, you need to do it via a holding company.
  4. Plan your exit early. It’s not enough to take things one step at a time – you need to know where you are heading in the long run and how you are planning to get there.

What puts people off?

Many people don’t realise how easy – and how beneficial – buying a business is. There are several reasons why people don’t do it. Some simply don’t think to try it. Some assume it will be too expensive or time consuming. Some lack the expertise to put together a deal. The fact is, however, you will make more money buying and selling companies than you will ever make just running one company. What you need to do is go from doer to dealmaker and learn what business acquisition could mean for you and your business – if you know what you are doing.

To learn more about how business acquisition works, please watch the Big Friday Finish webinar for FREE on YouTube.