Buying 'Ugly' Businesses with Lee Bushell

Show Notes

In this conversation, Lee Bushell shares his extensive entrepreneurial journey, starting from his early ventures in selling clothing at school to his experiences in the nightclub industry and transitioning into law. He discusses his approach to mergers and acquisitions, the strategy behind his investment group, and the importance of focusing on cash flow and ethical business practices. Lee emphasizes the significance of having a solid exit strategy for business owners and provides valuable insights into navigating business turnarounds and building a diverse portfolio.   Takeaways

• Lee Bushell started his entrepreneurial journey at age 15.
• His first business involved selling Calvin Klein clothing.
• Transitioning from law to business was a significant turning point.
• He emphasizes the importance of cash flow in business.
• Lee prefers investing in 'ugly' businesses with high barriers to entry.
• Mergers and acquisitions are a key focus for his investment group.
• He believes in ethical business practices and transparency.
• Lee advises business owners to have a solid exit strategy.
• Understanding the market is crucial for setting realistic expectations.
• The journey and relationships in business are what matter most.

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Creators & Guests

Host

Barnaby Cook

What is The Exit Plan: Mergers and Acquisitions for Creative Entrepreneurs?

The Exit Plan is for business owners that are interested in learning more about how to sell their business. Each episode Barnaby Cook interviews someone who has bought or sold a business - either a creative agency, or a production company. The conversation gets under the skin of why they wanted to sell, or were looking to acquire, how the deal was structured, how they agreed upon a valuation and what lessons they learnt along the way.

All right, so we are recording.

So welcome.

It would be great to, if you could start by just introducing yourself and telling me a
little bit about your background.

Alright well, my name is Lee Bushill.

I lived in Birmingham for 42 years of my life.

I've now moved to the countryside finally.

Much to my wife's chargren.

I've been an entrepreneur since the age of 15.

Even though I was fortunate enough to go to a really good school that my parents paid for.

And then I finished my education because my dad said I'd pay the fucking fortune for your
education.

become something qualified.

So I qualified as a lawyer.

I practiced for about a week and then knocked it on the head.

But during that time I was working, I had various businesses from the age of 15 up through
to the grand old ripe age of 42.

So what was your first business then?

were you doing at age 15?

was I'd been persuaded by a kid in the year above me at school who I played rugby with to
sell some Calvin Klein clothing out the back of his older brother's car and I sold them to

everybody in my year.

one of the funny stories is I actually sold one to my now wife.

It was the first time I ever made money on it.

I made a tenner, it's cost me millions ever since.

Soon afterwards, that older kid who's still a friend of mine actually said, I'm going to
be doing parties.

So he did one of these, you know, underage school parties, public school parties at a
local disco hall.

And he had two business partners and then said, do I want to sell tickets?

And he gave me a load of tickets to sell.

And of the 400 people there, I'd sold 300 of the tickets.

So the next time I was like, no, I want to be the partner now.

the most of the work and it sort of spiraled from there and then it was I mean I've got in
my room up there in my boardroom in my house I've got a list from the years 1995 all

through to now all the companies which started bought failed etc which makes it actually
for good reading and then from there I worked what did we do from there we

I worked for a company called Penny Black, which was a British fragrance company.

There aren't many British fragrance companies.

We launched in the clothes show in 1999 with Vinnie Jones.

Half our school year were working for me that day because I was working for the company.

I got hauled in the next day and half the school were missing yesterday.

We've never had truancy like that.

It must be something to do with you.

Of course it was.

And then I started doing my own parties.

Eventually I became a nightclub promoter.

And then that went on through university.

And then when I left university, I'd saved up enough money and I bought my own nightclub.

All right.

So in Birmingham.

Okay.

52 degrees north.

It had been a very popular nightclub probably four years before I bought it and it was on
the decline when we got it.

And I spent three years earning less than my bar staff and clearing up feces at three in
the morning.

crikey.

I remember I went to Newcastle University and I remember there was a bar there called 52
degrees, I think, don't know if it's related.

Different chain, different thing.

So with the league, so how long did it take you to train as a lawyer?

So I did a law degree, but I was commuting.

I went to Leeds University, I commuted every other day because I had the business in
Birmingham doing parties and various other things and selling promotional gear.

I imported 25 ,000 pairs of Pepsi slippers randomly once.

And so I used to commute up.

so I got my law degree and then...

I just, the day I finished university, just went back, sat in my office and was like, I'm
never doing an exam ever again.

And then was only, I only went back to it when I was 26.

Our nightclub had basically never made any money.

Although I was still doing my other promoting at other clubs, which was giving me the
income.

And our nightclub burnt down.

And I had to pay a barrister, 6 ,000 pounds.

for the information that I wouldn't win in a court of law because the insurance had
repudiated.

But it was quite interesting really because even though was proved that the fire started
in a glass washer in the middle of the night, they were able to repudiate on the insurance

because one of the warranties that we had was that we had to the burger alarm on.

We hadn't set it for six months because it was 24 -hour security there anyway and it was
going off in the middle of the night.

And that was when I was like, right, I've just paid somebody six grand, basically my last
six grand to tell me what I'm to win in court.

I'm going back to law.

So I did a year of law school whilst doing the club promotions.

And then I did my called articles training contract.

Okay.

So, okay.

So tell me a little bit about the like, &A experience then sort of buying and selling.

It sounds like you've done a bit of both.

Yeah, yeah, we've done we've done more buying than selling and I can come on to that a bit
later but so if we just fast forward, I sold I did a solvent liquidation of my jewelry

company in 2011 That was do you remember the cash for gold days?

We were really fortunate.

I started that in 08 and we became the the largest in europe really quickly

one of the fastest growing companies in the UK.

then I basically, I got out of that in 2011.

We did a solvent liquidation, we were going to sell the company, but we didn't think there
was any longevity in it.

So we did a solvent liquidation that gave me the money to then set up the Bush investment
group, where I could then start buying businesses.

And in regards to the &A, where do we sit as a company now?

We sit just below PE houses, you know, we can't compete with them, we don't have their
funds.

We don't have external funds.

We have one or two bits of external funds, friends and family, but generally we don't
raise money.

I'm terrible at raising money.

That was proved when I bought a bank and tried to raise money.

And that became a horrendous experience.

I highly recommend never buying a bank.

I mean, there's so much regulation, isn't there?

It's unbelievable.

Somebody had said to me years earlier, if you can ever get a banking license, it's a
license to print money.

Very few people have a banking license.

And I saw the opportunity and I grabbed it and it just chewed me up and spat me out 18
minutes later.

But we did exit.

So that was the good news.

Relatively unscathed.

It's a big life lesson.

So in regards to what we do as Bush Investment Group, we now do smaller bite sizes because
the bank was a big bite size and we don't want to ever go there again.

It was an eight figure purchase in the end.

So we want to buy companies generally under a million quid of EBITDA and generally where I
see my skill set and my team skill set and where we don't feel we have to compete with

The London finance boys is in ugly businesses.

So non -sexy non -tech non -media nothing, you know No ESG none of this none of these
buzzwords.

That's so popular nowadays So what one of things we look for is a good old -school ugly
business high barriers to entry retirement sales Not making over a million a year because

otherwise the PE houses will come and do a buy and build strategy so just

You know, Dave up the road, got a nice business, makes seven, eight hundred thousand
pounds a year, made a fortune.

But his kids, his kids are well educated.

One's a lawyer, one's a doctor somewhere.

They have no interest in his old school manufacturing or service business.

So who did he sell to?

Well, did he sell to a rival?

Oftentimes they don't, these old boys don't want to sell to rivals because they've kept
everything from them for their whole careers and they don't all of a sudden want to open

up to them.

And so we will come along and give them a fair price for their business, let them exit.

So I think this is really interesting.

your description of kind of ugly businesses as it were.

a lot of the listeners to this podcast are in creative agency owners, it's broadly kind of
the media industry.

And what is it about that industry that you find unattractive?

I don't understand it.

I'm not bright enough to understand it.

I've invested I've done if I have to look back there on my wall But I've done about three
investments in technology Two of them were EIS's and one was just a straight -up punt I

lost money on all of them And when I went to the board meetings and sat there, I didn't
understand the intricacies of the business and

That's the bottom line.

I didn't understand it.

I like simple businesses.

There are complicated businesses out there and there are simple businesses out there I
prefer a business that I can look at and say well, I think that a B and C is wrong What do

you think and then we move forward from there but with with creative media businesses, I
don't I don't

So what are you looking for then in a business in terms of what you can bring to it and
how you can improve it?

Okay, so that's interesting.

So, number one is there are a of good businesses out there that have cashflow
difficulties, not for any nefarious reason, just that COVID happened, which affected a lot

of businesses.

It's a good business where the CEO has taken his eye off the ball and he's tried to divest
and do something sexier, for example, and has left the core business and now they're in

trouble.

will come in, them the cash flow and try and focus their minds on doing what they do best.

How else can we improve it?

A lot of SMEs have horrendous accounting systems.

Yeah.

we can help there.

A lot of them have horrendous marketing or don't do any marketing, know, they've relied on
word of mouth for so long.

And even though we're not that sophisticated, we're bit more sophisticated than somebody
in their 60s who's never done it before.

And my team are definitely more sophisticated than I am because I'd say I'm an old, you
know, I listen to 70s music and I had a 6310 up until five years ago.

Okay, well, they've just brought out Nokia have got like a new version of the 6310.

and I'm on the case.

I mean I have to stop that when basically too many people, too many kids under 35 were
coming up to me going are you a drug dealer?

But the funny thing is anybody over 45 was like they were the greatest phones ever, they
lasted forever.

Yeah, yeah, no, I miss those phones for sure.

So tell me a bit about your team then.

who have you, you have a full time team at group level that, okay.

we have nine companies, nine or ten companies in the group now and then they all have
managing directors and they all have their own teams.

But then we act as the board level but over that there are four in our team.

So there's myself, there's the ops director Adam, commercial director Rob and then Jess
who's the CEO of the group.

Sometimes comes up into our stuff and then goes sort of sideways down and looks after all
the MDs and so there is There's a one there's a one three pronged strategy for the group

number one is we buy good ugly retirement businesses number two We will just offer cash
flow for good businesses and stay clear and charge a premium rate for that

And number three is turnarounds.

We buy turnarounds.

So we bought Supercuts and Regis, the hairdressers, about five years ago, which is the
largest chain of hairdressers in the UK.

We bought a very large transport business about five and a half years ago.

And we bought Aldo, the shoe brand.

bought all the franchises in the UK three years ago.

Turnarounds are very hard.

It's very specific space.

So these are big businesses and presumably like quite big deals that you've done here.

Yeah, so, so when we bought Aspire, its revenue is about 40 million.

The hairdressing company's revenue was, well, it had been up to over 100 million, but that
was before our time.

And out.

But but now we're running over the hairs about 20 25 million business.

Aldo was a 12 million business, but unfortunately, that's gone now.

That's an interesting story, actually, because

We bought Aldo.

It's very well known in the UK, especially with middle -aged women.

I did very well.

I was popular for a while.

And the business was still making money, but yet there was so much money tied up in
working capital.

Our return on capital employed was so low that when somebody else came up with it and
said, we'd like the franchise, we just said to the head franchise, give it to them.

So we basically gave the business away for nothing.

because it's really key in business to focus on what works, right?

there are, think one of our disadvantages is we're a master of nothing, jack of all
trades.

One of our advantages is we don't have to be in any one business.

So we own a bridging loan company and there are a number of, it's very hard market out
there at the moment.

And there are a number of bridging loan companies that are in trouble at the moment.

And the reason they're in trouble is because they've done bad loans.

But they only work for the bridging loan company.

So they have to continue to write deals to justify their existence, you see?

And if there are no deals out there, they'll still write those bad deals because that's
all they do.

That's their job.

If they didn't have that, the business would close.

They wouldn't have a job.

I think the difference with us where we're slightly lucky is if a business isn't working,
we won't do it anymore.

We won't do it.

We'll ensure the staff are looked after.

We'll tell them very early.

We've been in recruitment and we still are in recruitment, so we'll make sure they're in
jobs as well.

And we will close the business down.

There's no sentiment with any of it.

Business is business, do it as profitably as possible, but most importantly, do it as
ethically as possible.

Yeah.

So with the different companies in the group, is there a sort of strategy to the types of
businesses you're putting in and do they kind of interact with each other or are they just

kind of siloed businesses?

so yeah, really good question.

So I'll just go with do they interact?

So we tried about four years ago to integrate all accounting, all marketing, shared office
space.

But because I don't wholly own the businesses, I own the majority of all the businesses,
but we do have different stakeholders and shareholders.

The principle of that you think would work, right?

They all go to the same accounting team, they all go to same

They don't work.

They want to work in their silos.

They're so different, these businesses.

And of course the MDs of those businesses have got their own targets.

That even though we've done our best to say, you you're part of the bushel group and
you're, all together and we do all these team buildings and all these wonderful things.

The truth is they're not all after a common goal.

So it didn't work.

You you get, you get bickering within the firm.

within the firms, they've used more marketing, why are we paying for that much office
space?

They use the photocopier.

I see their accounts are perfect, why aren't our accounts perfect?

Why are you spending more time on the company turning over 25 mil than the company turning
over a mil?

And all of those things.

That's a really good question.

what we do is now, once every two months, we all get together and brainstorm, you know,
and go and have something to eat.

And I say to everybody, just take your hat off.

in your individual company for one hour and put it on somebody else's company.

What would you do differently?

And that's it.

We leave it at that.

And so mostly we leave them in silos now.

But you we've learned the hard way, but there's no one rule, is there?

You know, sometimes it works, sometimes it doesn't.

I'm sure you found that in your businesses as well.

And then what...

Sorry, Gordon.

because I'm just about to launch a new agency group, which initially will have three
businesses in it, and hopefully a fourth quite soon.

But yes, there's already, it's interesting, it's often like small things like what email
platform you use, like one of the businesses uses Outlook, the other one uses Gmail, one

of them uses Teams for sort of internal communication, one uses Slack.

And like

stuff like that is so contentious.

You wouldn't believe.

So yeah, very interesting to kind of hear your experience there that actually, in some
cases, you just leave them alone, leave them to get on with how they've always done it.

What was the first part of your last question,

well, I was asking if there was a sort of strategy to new businesses.

Yeah.

if you look at our businesses and they're about to get even crazier because we've just
bought, we've just set up a crematorium in Charlotte, North Carolina.

I'd love to sit here and tell you there's a strategy.

There isn't.

The business has been, and I've accepted this now, especially with going through what we
did with the bank.

We're completely agnostic in terms of what we're investing.

If it feels right, I go with my gut.

I then got the team to check my gut, because of course your gut's not always right.

We'll go into anything.

Does it produce cash?

Is it gonna be capital intensive?

We don't really want that.

Is it gonna be, is all your money gonna be tied up in stock?

We don't really want that.

There are, making money is hard, but.

there are businesses where it is easier than other businesses.

There's no doubt about that.

So we want to be in industries that produce cash basically.

And because we're not a typical PE house, we don't have to exit after three or four years.

There's no external pressure to do that.

So as far as I'm concerned, every business I buy, I want to hold till the day I die.

Now of course, in reality that never happens, special aid plans and all that.

So that's what we look for.

Well, that brings me nicely onto my next question, which is kind what's the end game here
for you and for the group?

Often people kind of build a group with a view to selling it, but it sounds like this is a
slightly different setup.

So yeah, tell me about the future.

I was really fortunate Barnaby, when we sold our jewellery company I was 28 years of age.

I was really fortunate to have that capital event that made things easier for me.

I mean don't get me wrong, I nearly fucked it up with the bank but thankfully we got out
alright.

But I had that capital event and...

For me, I've learned over the years that it's the journey, it's the people we're with,
know, we have a laugh at work, we enjoy, you know, all of our, all of the MDs in the

companies, a lot of them have been with me for 15 years now, you know, we're intrinsically
friends and we like the journey.

Now, when I was fortunate enough to have my capital event, I did turn around and at that
point I started saying, right, I want to give shares to people to get them.

moving forward in life and give them the financial stability.

that is, and of course I still want financial stability because let's be honest, however
wealthy you are, you always want more, you're always going to spend more.

It's human nature, isn't it?

Especially when you, especially when it's not passed down generational wealth, you know,
you want to do fun things and have a good life and you want your kids to have more.

And when your kids have more, you're like, they've got too much of this for, you know, and
I mean, we could, we could go off, we can go off on that for absolutely hours, couldn't

we?

So the key now is getting there will be some exits so when and I'll just flip back to
strategy so One of our businesses is called Guardian support So it does health and safety

and employment law advice for SMEs So the biggest in the marketplace company called
Peninsula, which is owned by which is which is unbelievably owned by a guy called Peter

Dunn whose brother is Fred Dunn who owns Betfred

So they're obviously a very intelligent family and they are the market leader and make
fortunes So we're small company and at the moment we're on a buy to build strategy Which

is a clear strategy we're going to buy three or four Smaller companies than ours bought
them together and sell for a higher multiple now in that instance I'm selling because My

shareholder of 15 % wants that exit and my shareholder of 10 % wants that exit

the multiples in retained earning businesses are very very good.

Yeah.

So, okay.

So, with the equity that you give, so this is to the previous owners of the business that
you're buying.

is business we set up from scratch.

It was a guy who was at law school actually.

So we became friends at law school and he then went to work for Bibby, who, Bibby are big,
one of the biggest private companies in the UK I think, Liverpool based.

But they had an employment law section at the time and he worked for them.

And I said, why don't we do it ourselves?

So that business has been going about.

14 years now.

So that was a, so, did you put up the cash and then your mate was the one that kind of ran
the business and yeah.

Okay.

put up the cash.

At the time I didn't charge any interest off it because it 15 years ago, sort of learning
the ropes.

Now we will charge what that money, what the opportunity cost on that money is.

So eight, nine, 10 % on that money if we ever put it into a business because at the end of
the day that's what it costs us realistically.

Because you borrow it from the bank at the moment.

We've got mortgages on commercial properties we own.

It's cuckoo.

It's like eight and a half percent at the moment.

even that were just under four before.

Okay, so that was the one that you set up.

So with businesses that you buy, do you ever leave equity with the previous owners as a
way to keep them incentivized?

You do, okay.

yeah, yeah.

So if they're looking at a management buyout, we'll leave shares with them and we'll
incentivize them as well.

often what some of the companies we purchase like is the fact that let's say that every
business when they present shows a growth strategy like that with, but next year we'll

make a fortune and then the year after.

And of course,

bumpy and essentially we've been break even for the last five years, we're just about,
we're at that inflection point.

Sure.

really inflection points.

We're going to make a bit next year, but then the year after we're going to make a few
million.

So of course, take that with a pinch of salt.

So what we often do is we'll take the majority stake in almost all cases, not always, but
in almost all.

We'll take the majority stake and then sometimes what we'll do is we'll do a ratchet.

So we'll say, right, okay, so if we make double our money, we'll then release 5 % of the
shares back to you.

If we make triple our money, we'll then release...

So we don't have.

We're not bothered if we end up as a minority stake as long as it's been a good investment
for us.

Especially if we're not adding anything to the business besides sitting on the...

Interesting.

So when you say kind of get our money back, is that kind of via dividends?

Is that how you look at it?

Like dividends up to the holding company or, or how do you take that money back out of the
business?

So yeah, it will be dividends and then obviously we will chuck it back into our holding
company exactly that or if it's just capital employed into the company, you just take the

capital employed back straight it straight out.

loan it in and then take it back out?

Yeah.

Okay.

And then if you can pay dividends and double the value of your original investment, then
the original owner gets a bit of their equity back.

Exactly.

It depends on it.

It depends if it's a retirement sale, he's not bothered.

But if it's a guy that's been in trouble just needs a bit of cash flow, we'll often we'll
often we don't know their business better than them.

There's no doubt about it.

But there's always some tweaks.

You know, there's a wood through the trees, you could come into my business tomorrow.

Why aren't you doing that and that and they look really obvious things and I'll be like,
shit.

And I called Jess and I said, why are we doing that?

But I don't know.

Yeah, yeah.

I get it.

Yeah.

So when you're kind of doing deals, how, just try and formulate the question, sort of how
much of it is the sort of cash that you're bringing to the deal versus

I'm guessing what I'm trying to get at is like, are the motivations of the sellers and why
are they kind of choosing you when it comes to sell?

Okay, fair point.

So, why would a lot of sellers...

We're really transparent.

know, we, and this is the smartest I've dressed all week, but I'm in trainers underneath.

We're pretty down to earth guys.

We tell it as it is.

So let's say, so I have probably about 50 businesses a week come to me.

have to sift them out really quickly.

But oftentimes I will say to them, you need a trade buyer.

That's where you'll get the most for this amount of money.

If I don't think I'm the best person to buy their business.

Generally don't do it because I don't want to hear it later.

we nicked our business.

So we did this so we did that he was You know unethical You know when I bought the bank
you have to be what's known as a fit and proper person So I went through this they put

private detective on me who sat down with me went through everything So even when we bust
businesses Because we bust them because I've bust them in an ethical way so paid everybody

before we paid ourselves They didn't have an issue with us

So that was actually the one good thing that came out of it is, you know, we're not wide
boys.

We're just not suits either.

You know, we're just honest, middle of the road guys.

And so why would a business owner sell to us over anybody else?

Speed of transaction.

And also we won't move the goalposts.

So we just lost out on a deal the other day actually.

I got into the post office, I think perhaps a bit late.

We lost out on a deal.

And I said to her, she said, I'm selling to this type of company.

And I was like, well, I'll tell you what.

If they move the goalposts, come and see me tomorrow.

One thing is we won't move the goalposts.

We'll say, this is what we're buying on.

This is how we've calculated what we've purchased on.

If those numbers, so let's say if your numbers are wrong by 100 grand, okay, we're not
gonna come in with an arbitrary chip of.

500 grand on the purchase price.

That's the formula.

So if your numbers aren't right, we will reduce it by that But we're not moving any goal
posts.

I'd rather walk away than somebody say he's tried

Yeah, I think that sounds that's really good.

Because I think that does happen a lot, actually.

And there are people out there who will teach you courses about business buying, who'll
kind of encourage you to get to heads of terms as quickly as possible, put down anything

you like in the heads of terms, and then kind of tighten the screws after that.

And I think that's, you know, unfortunately, fairly common.

Yeah, and also you get companies that have got cash flow issues, have a potential
purchaser, and they push the negotiations down and down and down till there's no choice

whatsoever, then chip at the last minute.

That's just not what I subscribe to.

I'm not saying, you know, maybe I'm not going to be as successful as those people, but I
don't want to do business like that.

It's just, it's not for me.

You know, I know billionaires and they're a different breed to...

even myself, know, they'll screw somebody down to the last penny so they're not making any
money.

It's not my gig, I'd rather sleep well at night and be known as an arsehole for other
things rather than business.

Absolutely.

So what is it that you enjoy about it?

Why have you kind of taken this career path?

Honestly, I just think I was born with it.

I can't explain it any other way.

My grandfather said, my grandfather and my dad at one point, said, all the kids were
playing, doing whatever, and I was reading the business section of the Times.

I don't know what it was.

My brothers are both successful guys, but not entrepreneurs.

One's a dentist, one's a hairdresser, and they've got their own businesses, and they do
really well.

but they're not overtly entrepreneurs.

I don't know, it was just inbuilt in me.

And maybe I just get bored.

You know, if you give me one thing to do, if you said to me, Lee, you can have 500 million
quid or even 100 million pounds, but you're never allowed to work a day in your life or

invest your money intelligently or I'd say no, I'd rather be broke and getting my brain
going and doing a deal here and thinking about this.

There's nothing I enjoy more than having a conversation with somebody and it's never one
light bulb moment, right?

It's always just, that's a good idea.

What if I add that to that and then add that to that?

And then you're nodding because you've been there yourself, I'm guessing as well.

Yeah, so I was gonna, so yeah, just thinking about the kind of listeners for this podcast
and the amount of businesses that you see come across your desk every week.

How do you kind of make that initial assessment?

Do you do it yourself or do you have someone that looks at it for you and kind of, yeah, I
guess sort of just trying to get a sense of like what makes

an attractive business, like what kind of criteria you using to weed out the majority?

Yeah, like the large majority of those deals.

So Sector does that automatically, you know, I'm not interested.

It's a huge manufacturing business with really strong engineering capabilities.

That's just beyond, I know it's an ugly business, but that's beyond our pay grade.

If it's anything to do with startups, we don't do that now.

We've done startups.

I've failed spectacularly with startups.

Although EIS, SEIS is a great thing and does mitigate the downside.

I have a big issue with startups.

Can I rant about startups?

When our parents started a business, they worked for somebody doing whatever and then they
branched out on their own and through word of mouth they built businesses.

When I started my business, I saved up five or six grand and I did a bit and then more and
then I had more and then I bought a club and then

lost the money and then a rebuilt the money and then I bought something else and some sort
of a lot of tech startups now their sole focus in life is raising fucking money and giving

sexy presentations they have no fundamental business model and all they do and it winds me
up a treat they're like well I'm paying myself 60 grand and we're developing this we need

to develop the app or whatever is and I'm generalizing here Barnaby so

get offended but it's I'm trying to build something that I'm not with other people's money
and my main focus is raising more money or making sure that we've got nice offices or that

everybody is well paid and issuing you know

I mean, it's funny you say that because I did some angel investing and one of the
investments has just failed and it was exactly that.

Should have spoken to you a year ago.

Yeah, that's my issue with them and they're not they're not entrepreneurs.

They're not using their own fucking money They're not using their blood sweat and tears
because they're taking a 70 grand salary that investors are putting their paying them for

and And business nowadays and actually there's been a correction I Need to I wrote an
article once put it on LinkedIn.

It's fallen off LinkedIn now, but I want to pick it up because it was true is

The market has fallen out now for a lot of this angel investing, these crazy, crazy
valuations of tech companies.

But I think up until a few years ago, they're losing sight of what a business is about.

A business is about, number one, profit.

You can't do any social good things, any ESG, you can't do anything unless you make profit
or cash, but predominantly profit, right?

So how do you monetize it?

You know, lot of these businesses, they're only monetizing it as, we'll do another round
of investing and then we'll get paid out.

Businesses are built on profit.

Economies are built on excess profit.

And I think they lost their way.

Yeah, yeah, fair enough.

any advice then to agency owners, small business owners that are looking to sell their
business, they may be at the beginning of their journey or, you know, part way through

they're considering the options.

What should they be putting in place to make their business an attractive proposition to a
potential buyer?

number one, a good exit story.

Okay?

If they're 45 years of age and they're saying, well, I just want to sell for three million
quid and retire, well, I don't think buyers are gonna believe you because you're gonna go

again.

So the story's got to be right.

If you've got to make up a new...

interrupt but I exited a business that I founded three years ago, age 40 and I'm
absolutely going again.

So my advice even though it's a bit nefarious would be if you haven't got a story make up
a really good one and chuck in an illness or something like that because no one will

question an illness.

Bit nefarious but it's just not it.

That's number one.

Number two you've got to have a good management in place because a lot of these people
they're investing in the businesses want to see a good management they want to have they

probably want a hands -off investment.

Number three really good accounting and reporting.

So it's clear nobody wants to you know, nobody wants to see when they're fiddling.

Well, I think we made this and you know, really clear concise Number four depending on
what size you are if you're under say half a million EBITDA under a million EBITDA Under

half a million obviously corporate finance houses will charge you a fortune So you'll end
up going with one of the the big brokers, you your KBS is of the world

They will not set your expectations properly, those brokers.

Corporate Finance will.

I'm selling a business at KBS at the moment.

I'm buying one KBS now.

But they won't set the expectation.

They never do.

They just churn them out.

So they're looking at your business, telling you you'll get six times your multiple even
though you're making 300 grand a year.

And the reality is you never will get that amount of money.

So just set your own expectations when you're selling the business.

Go out there.

Look at the marketplace, look at what other companies have been sold for.

A lot of it's public information, some isn't, but you can work it out pretty quickly and
just set your expectations at that.

And realize as well that you are not going to be able to sell your company if it's a
company on the down and you're just trying to quickly sell it because your warranties when

you sell it will catch you up and you'll be looking over your shoulder all the time.

So make sure your business is in a good position and you're confident that it is going to
carry on.

because you probably won't get all your payout on day one anyway.

Some will be retained.

I'm guessing you have exactly the same and your warranties will catch you if you're lying.

Very sound advice.

And that's probably a good place to wrap things up.

So thank you very much.

My absolute pleasure.

What type of businesses are you investing in Barnaby?

I'll just press stop.