April 4, 2023
Episode 164 – Jonathan Jay – The Deal Engineer
“If you’re going to put the effort into buying a business, you might as well put the effort into buying a larger business that runs under management so you can still go on holiday and you can enjoy the money that the business makes rather than having to turn up every day.” – Jonathan Jay
- Selected links and people mentioned from this episode:
- The Dealmaker’s Academy
- Dealmakers Live!
- Business Buying Strategies by Jonathan Jay
- [0:42] Patrick introduces his next TEDM guest, Jonathan Jay.
- [1:51] Jonathan and Patrick open up their conversation with a bit about Jonathan, what he’s up to in business, what’s he’s good at, and what he’s not!
- [06:23] Jonathan offers guidance around buying a business starting with the fundamental of choosing the right one to invest in.
- [10:10] Business vs. franchise. Jonathan explains the difference between them and what he sees as the challenge of being a franchisee.
- [12:58] Jonathan clarifies the type of business he’s looking for and describes scenarios in which someone may find motivated sellers.
- [17:18] Dealmakers Live! With his past clients now coming to live events and speaking about their experience, Jonathan has noted a common thread, unprompted, that weaves through most everyone’s story, no matter the sector.
- [20:39] Finding deals the old-fashioned way. Jonathan identifies the sweet spot in the process of engaging a business owner desiring to sell, and how he goes about finding those businesses in the first place. It’s not all that different from buying real estate as it turns out.
- [24:34] Jonathan runs through the process of how to buy a business without using any of his own personal money. Surprisingly money is not always the main motivator for a business owner wishing to exit, which can work to everyone’s benefit.
- [34:00] Let’s talk about the buyer. Jonathan offers some advice he gives to buyers, and what type of personality is best suited for this type of undertaking.
- [37:20] Jonathan shares a personal experience that illustrates one way to flip a business. Not in a way he would recommend mind you, as it can present a lot of risk.
- [42:06] Having a lifelong fascination with business, and two parents who ran their own, Jonathan naturally gravitated to start his own business, and left university after the first term with no regret. While not always the “easy” path, Jonathan’s passion is still fired, and he finds it to be the most rewarding.
- [46:05] Reflecting on what he sees for his future, Jonathan is still jazzed by the excitement of the deal while having a lot of fun being of contribution to others’ success.
- [48:27] Jonathan offers his perspective on loving the business you buy.
- [51:25] There is an important distinction to make when buying a business, understanding what your strengths are and why you’re doing it. Consider if you want to buy it as an investor or as an operator of the day-to-day business.
- [53:16] Patrick and Jonathan discuss the value of a business. The most important factor of business ownership lies in being replaceable. Having a business that is dependent on the owner damages its value. Jonathan advice is to lay everything out, dissect each component of your business, and figure out the best fit for each. This especially includes what you’re doing in the business so that you can extract yourself from daily operations and create an exceptional team. Getting out of the way, is what empowers the rest of the team when done well.
- [59:37] Jonathan explains his model when acquiring businesses, plus the turning point that made it absolutely necessary for him to take a break.
- [62:49] Mindset and self-belief. Jonathan weighs in not only on the importance of believing in oneself but also surrounding oneself with a community of people who elevate our experience over dragging it down. In Jonathan’s experience finding or establishing a culture of support is essential for success in business.
- [68:39] A real rapid fire! Android or Apple; not much for music or swearing; favourite movie; room-desk-car.
- [69:58] Jonathan’s gratitude.