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All right, so we are recording.

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So welcome.

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

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Alright well, my name is Lee Bushill.

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I lived in Birmingham for 42 years of my life.

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I've now moved to the countryside finally.

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Much to my wife's chargren.

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

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

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

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become something qualified.

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So I qualified as a lawyer.

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

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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.

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So what was your first business then?

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were you doing at age 15?

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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

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everybody in my year.

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

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

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

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

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

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

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And he gave me a load of tickets to sell.

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

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

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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

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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

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

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There aren't many British fragrance companies.

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

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

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

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We've never had truancy like that.

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It must be something to do with you.

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Of course it was.

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And then I started doing my own parties.

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Eventually I became a nightclub promoter.

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And then that went on through university.

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

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All right.

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So in Birmingham.

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Okay.

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52 degrees north.

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

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

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crikey.

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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.

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Different chain, different thing.

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

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

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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.

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

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And so I used to commute up.

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so I got my law degree and then...

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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.

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

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Our nightclub had basically never made any money.

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

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And our nightclub burnt down.

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

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

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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

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

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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.

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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.

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I'm going back to law.

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

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And then I did my called articles training contract.

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Okay.

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So, okay.

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

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

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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

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

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We were really fortunate.

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

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one of the fastest growing companies in the UK.

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

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

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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.

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

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

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We don't have external funds.

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

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I'm terrible at raising money.

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

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And that became a horrendous experience.

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I highly recommend never buying a bank.

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

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It's unbelievable.

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

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Very few people have a banking license.

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

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But we did exit.

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So that was the good news.

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Relatively unscathed.

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It's a big life lesson.

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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.

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It was an eight figure purchase in the end.

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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

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The London finance boys is in ugly businesses.

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

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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

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

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

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But his kids, his kids are well educated.

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

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

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So who did he sell to?

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Well, did he sell to a rival?

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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

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up to them.

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

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So I think this is really interesting.

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your description of kind of ugly businesses as it were.

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

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

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I don't understand it.

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I'm not bright enough to understand it.

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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

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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

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That's the bottom line.

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I didn't understand it.

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I like simple businesses.

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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

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

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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?

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Okay, so that's interesting.

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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

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of businesses.

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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

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trouble.

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

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How else can we improve it?

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A lot of SMEs have horrendous accounting systems.

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Yeah.

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we can help there.

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

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

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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.

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

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and I'm on the case.

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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?

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

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

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So tell me a bit about your team then.

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

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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.

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

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

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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

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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

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And number three is turnarounds.

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We buy turnarounds.

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

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

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And we bought Aldo, the shoe brand.

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bought all the franchises in the UK three years ago.

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Turnarounds are very hard.

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It's very specific space.

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

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

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

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And out.

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

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

169
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That's an interesting story, actually, because

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We bought Aldo.

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

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I did very well.

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I was popular for a while.

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

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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.

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So we basically gave the business away for nothing.

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

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

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

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

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

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

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But they only work for the bridging loan company.

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

185
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And if there are no deals out there, they'll still write those bad deals because that's
all they do.

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That's their job.

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

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They wouldn't have a job.

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

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We won't do it.

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We'll ensure the staff are looked after.

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We'll tell them very early.

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

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And we will close the business down.

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There's no sentiment with any of it.

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

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Yeah.

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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

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kind of siloed businesses?

200
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so yeah, really good question.

201
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So I'll just go with do they interact?

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

203
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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.

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The principle of that you think would work, right?

205
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They all go to the same accounting team, they all go to same

206
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They don't work.

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They want to work in their silos.

208
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They're so different, these businesses.

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

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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.

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

212
00:17:25,574 --> 00:17:27,935
So it didn't work.

213
00:17:27,935 --> 00:17:31,714
You you get, you get bickering within the firm.

214
00:17:31,714 --> 00:17:35,484
within the firms, they've used more marketing, why are we paying for that much office
space?

215
00:17:35,484 --> 00:17:37,814
They use the photocopier.

216
00:17:37,814 --> 00:17:41,754
I see their accounts are perfect, why aren't our accounts perfect?

217
00:17:41,754 --> 00:17:47,114
Why are you spending more time on the company turning over 25 mil than the company turning
over a mil?

218
00:17:47,114 --> 00:17:48,314
And all of those things.

219
00:17:48,314 --> 00:17:49,434
That's a really good question.

220
00:17:49,434 --> 00:17:56,734
what we do is now, once every two months, we all get together and brainstorm, you know,
and go and have something to eat.

221
00:17:56,734 --> 00:17:59,476
And I say to everybody, just take your hat off.

222
00:17:59,476 --> 00:18:04,841
in your individual company for one hour and put it on somebody else's company.

223
00:18:04,841 --> 00:18:06,573
What would you do differently?

224
00:18:06,573 --> 00:18:07,273
And that's it.

225
00:18:07,273 --> 00:18:08,275
We leave it at that.

226
00:18:08,275 --> 00:18:11,837
And so mostly we leave them in silos now.

227
00:18:13,359 --> 00:18:17,363
But you we've learned the hard way, but there's no one rule, is there?

228
00:18:17,363 --> 00:18:19,575
You know, sometimes it works, sometimes it doesn't.

229
00:18:19,575 --> 00:18:22,367
I'm sure you found that in your businesses as well.

230
00:18:22,628 --> 00:18:23,769
And then what...

231
00:18:23,950 --> 00:18:24,549
Sorry, Gordon.

232
00:18:24,549 --> 00:18:33,221
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.

233
00:18:35,802 --> 00:18:47,145
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

234
00:18:47,145 --> 00:18:51,006
of them uses Teams for sort of internal communication, one uses Slack.

235
00:18:51,066 --> 00:18:51,942
And like

236
00:18:51,942 --> 00:18:55,006
stuff like that is so contentious.

237
00:18:55,006 --> 00:18:56,568
You wouldn't believe.

238
00:18:57,650 --> 00:19:10,216
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.

239
00:19:10,851 --> 00:19:13,097
What was the first part of your last question,

240
00:19:15,726 --> 00:19:19,634
well, I was asking if there was a sort of strategy to new businesses.

241
00:19:19,634 --> 00:19:20,052
Yeah.

242
00:19:20,052 --> 00:19:29,739
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.

243
00:19:34,464 --> 00:19:37,626
I'd love to sit here and tell you there's a strategy.

244
00:19:38,747 --> 00:19:39,848
There isn't.

245
00:19:40,529 --> 00:19:46,033
The business has been, and I've accepted this now, especially with going through what we
did with the bank.

246
00:19:49,024 --> 00:19:52,916
We're completely agnostic in terms of what we're investing.

247
00:19:52,916 --> 00:19:55,197
If it feels right, I go with my gut.

248
00:19:55,197 --> 00:20:02,019
I then got the team to check my gut, because of course your gut's not always right.

249
00:20:02,019 --> 00:20:03,600
We'll go into anything.

250
00:20:03,600 --> 00:20:05,261
Does it produce cash?

251
00:20:05,261 --> 00:20:07,982
Is it gonna be capital intensive?

252
00:20:07,982 --> 00:20:09,362
We don't really want that.

253
00:20:09,362 --> 00:20:12,424
Is it gonna be, is all your money gonna be tied up in stock?

254
00:20:12,424 --> 00:20:14,504
We don't really want that.

255
00:20:15,105 --> 00:20:18,668
There are, making money is hard, but.

256
00:20:18,668 --> 00:20:23,872
there are businesses where it is easier than other businesses.

257
00:20:23,872 --> 00:20:25,843
There's no doubt about that.

258
00:20:27,264 --> 00:20:32,148
So we want to be in industries that produce cash basically.

259
00:20:32,148 --> 00:20:37,311
And because we're not a typical PE house, we don't have to exit after three or four years.

260
00:20:38,473 --> 00:20:41,095
There's no external pressure to do that.

261
00:20:41,095 --> 00:20:46,208
So as far as I'm concerned, every business I buy, I want to hold till the day I die.

262
00:20:46,208 --> 00:20:51,478
Now of course, in reality that never happens, special aid plans and all that.

263
00:20:51,478 --> 00:20:53,140
So that's what we look for.

264
00:20:53,848 --> 00:21:03,943
Well, that brings me nicely onto my next question, which is kind what's the end game here
for you and for the group?

265
00:21:03,943 --> 00:21:10,055
Often people kind of build a group with a view to selling it, but it sounds like this is a
slightly different setup.

266
00:21:10,055 --> 00:21:12,102
So yeah, tell me about the future.

267
00:21:12,102 --> 00:21:18,712
I was really fortunate Barnaby, when we sold our jewellery company I was 28 years of age.

268
00:21:18,712 --> 00:21:25,602
I was really fortunate to have that capital event that made things easier for me.

269
00:21:25,602 --> 00:21:31,202
I mean don't get me wrong, I nearly fucked it up with the bank but thankfully we got out
alright.

270
00:21:31,202 --> 00:21:33,975
But I had that capital event and...

271
00:21:34,402 --> 00:21:45,942
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

272
00:21:45,942 --> 00:21:53,002
companies, a lot of them have been with me for 15 years now, you know, we're intrinsically
friends and we like the journey.

273
00:21:53,002 --> 00:22:03,086
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.

274
00:22:03,978 --> 00:22:07,699
moving forward in life and give them the financial stability.

275
00:22:08,059 --> 00:22:16,241
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.

276
00:22:16,241 --> 00:22:17,562
It's human nature, isn't it?

277
00:22:17,562 --> 00:22:24,954
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.

278
00:22:24,954 --> 00:22:33,546
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

279
00:22:33,546 --> 00:22:34,106
we?

280
00:22:35,063 --> 00:22:50,061
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

281
00:22:50,061 --> 00:23:00,486
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

282
00:23:00,486 --> 00:23:03,678
Dunn whose brother is Fred Dunn who owns Betfred

283
00:23:03,970 --> 00:23:15,290
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

284
00:23:15,290 --> 00:23:25,410
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

285
00:23:25,410 --> 00:23:31,330
shareholder of 15 % wants that exit and my shareholder of 10 % wants that exit

286
00:23:32,502 --> 00:23:38,711
the multiples in retained earning businesses are very very good.

287
00:23:39,190 --> 00:23:39,872
Yeah.

288
00:23:39,872 --> 00:23:40,903
So, okay.

289
00:23:40,903 --> 00:23:47,818
So, with the equity that you give, so this is to the previous owners of the business that
you're buying.

290
00:23:47,818 --> 00:23:49,329
is business we set up from scratch.

291
00:23:49,329 --> 00:23:51,601
It was a guy who was at law school actually.

292
00:23:51,601 --> 00:24:04,748
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.

293
00:24:04,748 --> 00:24:08,390
But they had an employment law section at the time and he worked for them.

294
00:24:08,470 --> 00:24:11,271
And I said, why don't we do it ourselves?

295
00:24:12,852 --> 00:24:16,002
So that business has been going about.

296
00:24:16,002 --> 00:24:17,454
14 years now.

297
00:24:17,454 --> 00:24:26,092
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.

298
00:24:26,113 --> 00:24:26,670
Okay.

299
00:24:26,670 --> 00:24:28,150
put up the cash.

300
00:24:28,370 --> 00:24:34,030
At the time I didn't charge any interest off it because it 15 years ago, sort of learning
the ropes.

301
00:24:34,030 --> 00:24:38,700
Now we will charge what that money, what the opportunity cost on that money is.

302
00:24:38,700 --> 00:24:46,190
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.

303
00:24:46,210 --> 00:24:47,920
Because you borrow it from the bank at the moment.

304
00:24:47,920 --> 00:24:51,630
We've got mortgages on commercial properties we own.

305
00:24:51,630 --> 00:24:52,450
It's cuckoo.

306
00:24:52,450 --> 00:24:54,420
It's like eight and a half percent at the moment.

307
00:24:54,420 --> 00:24:57,503
even that were just under four before.

308
00:24:59,256 --> 00:25:01,110
Okay, so that was the one that you set up.

309
00:25:01,110 --> 00:25:06,932
So with businesses that you buy, do you ever leave equity with the previous owners as a
way to keep them incentivized?

310
00:25:06,932 --> 00:25:07,460
You do, okay.

311
00:25:07,460 --> 00:25:08,120
yeah, yeah.

312
00:25:08,120 --> 00:25:18,569
So if they're looking at a management buyout, we'll leave shares with them and we'll
incentivize them as well.

313
00:25:18,569 --> 00:25:30,980
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

314
00:25:30,980 --> 00:25:33,042
make a fortune and then the year after.

315
00:25:33,042 --> 00:25:34,137
And of course,

316
00:25:34,137 --> 00:25:39,868
bumpy and essentially we've been break even for the last five years, we're just about,
we're at that inflection point.

317
00:25:39,868 --> 00:25:40,768
Sure.

318
00:25:40,786 --> 00:25:41,686
really inflection points.

319
00:25:41,686 --> 00:25:45,026
We're going to make a bit next year, but then the year after we're going to make a few
million.

320
00:25:45,026 --> 00:25:47,826
So of course, take that with a pinch of salt.

321
00:25:47,826 --> 00:25:54,706
So what we often do is we'll take the majority stake in almost all cases, not always, but
in almost all.

322
00:25:54,706 --> 00:25:59,686
We'll take the majority stake and then sometimes what we'll do is we'll do a ratchet.

323
00:25:59,686 --> 00:26:07,046
So we'll say, right, okay, so if we make double our money, we'll then release 5 % of the
shares back to you.

324
00:26:07,046 --> 00:26:09,740
If we make triple our money, we'll then release...

325
00:26:09,740 --> 00:26:11,197
So we don't have.

326
00:26:13,664 --> 00:26:18,402
We're not bothered if we end up as a minority stake as long as it's been a good investment
for us.

327
00:26:18,683 --> 00:26:22,780
Especially if we're not adding anything to the business besides sitting on the...

328
00:26:23,190 --> 00:26:23,761
Interesting.

329
00:26:23,761 --> 00:26:28,837
So when you say kind of get our money back, is that kind of via dividends?

330
00:26:29,058 --> 00:26:30,139
Is that how you look at it?

331
00:26:30,139 --> 00:26:35,546
Like dividends up to the holding company or, or how do you take that money back out of the
business?

332
00:26:36,524 --> 00:26:46,229
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

333
00:26:46,229 --> 00:26:49,239
capital employed back straight it straight out.

334
00:26:49,239 --> 00:26:50,952
loan it in and then take it back out?

335
00:26:50,952 --> 00:26:51,283
Yeah.

336
00:26:51,283 --> 00:26:51,663
Okay.

337
00:26:51,663 --> 00:27:00,596
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.

338
00:27:00,596 --> 00:27:01,366
Exactly.

339
00:27:01,366 --> 00:27:02,137
It depends on it.

340
00:27:02,137 --> 00:27:04,107
It depends if it's a retirement sale, he's not bothered.

341
00:27:04,107 --> 00:27:12,201
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.

342
00:27:12,201 --> 00:27:13,331
There's no doubt about it.

343
00:27:13,331 --> 00:27:14,752
But there's always some tweaks.

344
00:27:14,752 --> 00:27:17,993
You know, there's a wood through the trees, you could come into my business tomorrow.

345
00:27:17,993 --> 00:27:24,115
Why aren't you doing that and that and they look really obvious things and I'll be like,
shit.

346
00:27:25,596 --> 00:27:27,977
And I called Jess and I said, why are we doing that?

347
00:27:27,977 --> 00:27:29,438
But I don't know.

348
00:27:29,990 --> 00:27:31,451
Yeah, yeah.

349
00:27:31,871 --> 00:27:32,852
I get it.

350
00:27:33,192 --> 00:27:34,132
Yeah.

351
00:27:34,593 --> 00:27:49,822
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

352
00:27:51,778 --> 00:27:59,884
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?

353
00:28:01,930 --> 00:28:03,034
Okay, fair point.

354
00:28:03,034 --> 00:28:06,182
So, why would a lot of sellers...

355
00:28:07,778 --> 00:28:09,658
We're really transparent.

356
00:28:09,658 --> 00:28:14,818
know, we, and this is the smartest I've dressed all week, but I'm in trainers underneath.

357
00:28:15,118 --> 00:28:17,358
We're pretty down to earth guys.

358
00:28:17,358 --> 00:28:19,398
We tell it as it is.

359
00:28:19,658 --> 00:28:23,378
So let's say, so I have probably about 50 businesses a week come to me.

360
00:28:23,378 --> 00:28:25,678
have to sift them out really quickly.

361
00:28:27,018 --> 00:28:31,498
But oftentimes I will say to them, you need a trade buyer.

362
00:28:31,498 --> 00:28:33,718
That's where you'll get the most for this amount of money.

363
00:28:33,718 --> 00:28:37,178
If I don't think I'm the best person to buy their business.

364
00:28:37,490 --> 00:28:41,631
Generally don't do it because I don't want to hear it later.

365
00:28:41,631 --> 00:28:42,641
we nicked our business.

366
00:28:42,641 --> 00:28:52,474
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

367
00:28:52,474 --> 00:29:04,027
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

368
00:29:04,027 --> 00:29:07,318
before we paid ourselves They didn't have an issue with us

369
00:29:07,318 --> 00:29:13,881
So that was actually the one good thing that came out of it is, you know, we're not wide
boys.

370
00:29:15,703 --> 00:29:18,194
We're just not suits either.

371
00:29:18,194 --> 00:29:22,346
You know, we're just honest, middle of the road guys.

372
00:29:22,346 --> 00:29:26,648
And so why would a business owner sell to us over anybody else?

373
00:29:26,869 --> 00:29:28,710
Speed of transaction.

374
00:29:29,330 --> 00:29:31,512
And also we won't move the goalposts.

375
00:29:31,512 --> 00:29:35,974
So we just lost out on a deal the other day actually.

376
00:29:37,538 --> 00:29:39,798
I got into the post office, I think perhaps a bit late.

377
00:29:39,798 --> 00:29:41,238
We lost out on a deal.

378
00:29:41,238 --> 00:29:44,518
And I said to her, she said, I'm selling to this type of company.

379
00:29:44,518 --> 00:29:46,558
And I was like, well, I'll tell you what.

380
00:29:46,718 --> 00:29:49,958
If they move the goalposts, come and see me tomorrow.

381
00:29:50,458 --> 00:29:52,548
One thing is we won't move the goalposts.

382
00:29:52,548 --> 00:29:54,898
We'll say, this is what we're buying on.

383
00:29:54,898 --> 00:29:58,138
This is how we've calculated what we've purchased on.

384
00:29:58,138 --> 00:30:06,266
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.

385
00:30:06,338 --> 00:30:08,198
500 grand on the purchase price.

386
00:30:08,198 --> 00:30:09,318
That's the formula.

387
00:30:09,318 --> 00:30:14,848
So if your numbers aren't right, we will reduce it by that But we're not moving any goal
posts.

388
00:30:14,848 --> 00:30:18,278
I'd rather walk away than somebody say he's tried

389
00:30:20,894 --> 00:30:23,626
Yeah, I think that sounds that's really good.

390
00:30:23,626 --> 00:30:26,769
Because I think that does happen a lot, actually.

391
00:30:26,769 --> 00:30:37,188
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

392
00:30:37,188 --> 00:30:40,871
you like in the heads of terms, and then kind of tighten the screws after that.

393
00:30:40,871 --> 00:30:43,818
And I think that's, you know, unfortunately, fairly common.

394
00:30:43,818 --> 00:30:54,132
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

395
00:30:54,132 --> 00:30:56,583
whatsoever, then chip at the last minute.

396
00:30:57,404 --> 00:30:59,645
That's just not what I subscribe to.

397
00:30:59,645 --> 00:31:08,288
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.

398
00:31:08,288 --> 00:31:09,549
It's just, it's not for me.

399
00:31:09,549 --> 00:31:13,266
You know, I know billionaires and they're a different breed to...

400
00:31:13,266 --> 00:31:19,732
even myself, know, they'll screw somebody down to the last penny so they're not making any
money.

401
00:31:19,732 --> 00:31:26,357
It's not my gig, I'd rather sleep well at night and be known as an arsehole for other
things rather than business.

402
00:31:26,496 --> 00:31:27,158
Absolutely.

403
00:31:27,158 --> 00:31:30,575
So what is it that you enjoy about it?

404
00:31:30,575 --> 00:31:34,272
Why have you kind of taken this career path?

405
00:31:36,460 --> 00:31:40,572
Honestly, I just think I was born with it.

406
00:31:40,572 --> 00:31:43,293
I can't explain it any other way.

407
00:31:44,273 --> 00:31:55,438
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.

408
00:31:55,438 --> 00:31:58,219
I don't know what it was.

409
00:31:58,559 --> 00:32:01,841
My brothers are both successful guys, but not entrepreneurs.

410
00:32:01,841 --> 00:32:05,538
One's a dentist, one's a hairdresser, and they've got their own businesses, and they do
really well.

411
00:32:05,538 --> 00:32:09,118
but they're not overtly entrepreneurs.

412
00:32:09,698 --> 00:32:11,588
I don't know, it was just inbuilt in me.

413
00:32:11,588 --> 00:32:14,268
And maybe I just get bored.

414
00:32:14,268 --> 00:32:25,538
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

415
00:32:25,538 --> 00:32:34,508
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.

416
00:32:34,508 --> 00:32:41,606
There's nothing I enjoy more than having a conversation with somebody and it's never one
light bulb moment, right?

417
00:32:41,606 --> 00:32:44,599
It's always just, that's a good idea.

418
00:32:44,599 --> 00:32:47,362
What if I add that to that and then add that to that?

419
00:32:47,362 --> 00:32:52,332
And then you're nodding because you've been there yourself, I'm guessing as well.

420
00:32:52,332 --> 00:33:05,030
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.

421
00:33:05,570 --> 00:33:09,813
How do you kind of make that initial assessment?

422
00:33:09,813 --> 00:33:17,740
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

423
00:33:17,740 --> 00:33:23,468
an attractive business, like what kind of criteria you using to weed out the majority?

424
00:33:23,468 --> 00:33:26,402
Yeah, like the large majority of those deals.

425
00:33:27,564 --> 00:33:31,956
So Sector does that automatically, you know, I'm not interested.

426
00:33:31,956 --> 00:33:38,300
It's a huge manufacturing business with really strong engineering capabilities.

427
00:33:38,300 --> 00:33:42,622
That's just beyond, I know it's an ugly business, but that's beyond our pay grade.

428
00:33:43,323 --> 00:33:47,765
If it's anything to do with startups, we don't do that now.

429
00:33:47,765 --> 00:33:49,546
We've done startups.

430
00:33:49,766 --> 00:33:53,128
I've failed spectacularly with startups.

431
00:33:53,188 --> 00:33:57,470
Although EIS, SEIS is a great thing and does mitigate the downside.

432
00:33:58,082 --> 00:34:00,143
I have a big issue with startups.

433
00:34:00,143 --> 00:34:03,844
Can I rant about startups?

434
00:34:04,185 --> 00:34:13,989
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.

435
00:34:13,989 --> 00:34:24,433
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

436
00:34:25,410 --> 00:34:37,510
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

437
00:34:37,510 --> 00:34:50,670
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

438
00:34:50,670 --> 00:34:54,790
to develop the app or whatever is and I'm generalizing here Barnaby so

439
00:34:55,180 --> 00:35:08,483
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

440
00:35:08,483 --> 00:35:11,956
everybody is well paid and issuing you know

441
00:35:12,492 --> 00:35:22,347
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.

442
00:35:24,849 --> 00:35:26,729
Should have spoken to you a year ago.

443
00:35:27,389 --> 00:35:30,950
Yeah, that's my issue with them and they're not they're not entrepreneurs.

444
00:35:30,950 --> 00:35:39,270
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

445
00:35:39,270 --> 00:35:47,830
and And business nowadays and actually there's been a correction I Need to I wrote an
article once put it on LinkedIn.

446
00:35:47,830 --> 00:35:53,882
It's fallen off LinkedIn now, but I want to pick it up because it was true is

447
00:35:55,254 --> 00:36:03,878
The market has fallen out now for a lot of this angel investing, these crazy, crazy
valuations of tech companies.

448
00:36:04,039 --> 00:36:12,063
But I think up until a few years ago, they're losing sight of what a business is about.

449
00:36:12,063 --> 00:36:15,485
A business is about, number one, profit.

450
00:36:15,485 --> 00:36:24,990
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?

451
00:36:25,314 --> 00:36:27,878
So how do you monetize it?

452
00:36:27,878 --> 00:36:35,250
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.

453
00:36:37,932 --> 00:36:39,225
Businesses are built on profit.

454
00:36:39,225 --> 00:36:44,136
Economies are built on excess profit.

455
00:36:44,238 --> 00:36:46,040
And I think they lost their way.

456
00:36:46,754 --> 00:36:48,995
Yeah, yeah, fair enough.

457
00:36:50,556 --> 00:37:04,623
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

458
00:37:04,623 --> 00:37:06,183
they're considering the options.

459
00:37:06,183 --> 00:37:11,930
What should they be putting in place to make their business an attractive proposition to a
potential buyer?

460
00:37:11,930 --> 00:37:15,190
number one, a good exit story.

461
00:37:15,190 --> 00:37:15,590
Okay?

462
00:37:15,590 --> 00:37:25,310
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

463
00:37:25,310 --> 00:37:26,450
again.

464
00:37:26,910 --> 00:37:30,050
So the story's got to be right.

465
00:37:30,930 --> 00:37:32,750
If you've got to make up a new...

466
00:37:32,750 --> 00:37:41,650
interrupt but I exited a business that I founded three years ago, age 40 and I'm
absolutely going again.

467
00:37:43,307 --> 00:37:52,454
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

468
00:37:52,454 --> 00:37:53,915
question an illness.

469
00:37:54,536 --> 00:37:56,597
Bit nefarious but it's just not it.

470
00:37:56,597 --> 00:37:57,558
That's number one.

471
00:37:57,558 --> 00:38:05,074
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

472
00:38:05,074 --> 00:38:07,806
probably want a hands -off investment.

473
00:38:09,568 --> 00:38:12,650
Number three really good accounting and reporting.

474
00:38:12,684 --> 00:38:16,335
So it's clear nobody wants to you know, nobody wants to see when they're fiddling.

475
00:38:16,335 --> 00:38:29,799
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

476
00:38:29,799 --> 00:38:40,852
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

477
00:38:41,346 --> 00:38:44,406
They will not set your expectations properly, those brokers.

478
00:38:44,406 --> 00:38:46,126
Corporate Finance will.

479
00:38:46,846 --> 00:38:48,896
I'm selling a business at KBS at the moment.

480
00:38:48,896 --> 00:38:50,326
I'm buying one KBS now.

481
00:38:50,326 --> 00:38:51,916
But they won't set the expectation.

482
00:38:51,916 --> 00:38:52,506
They never do.

483
00:38:52,506 --> 00:38:54,026
They just churn them out.

484
00:38:54,026 --> 00:38:59,536
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.

485
00:38:59,536 --> 00:39:02,346
And the reality is you never will get that amount of money.

486
00:39:02,886 --> 00:39:06,686
So just set your own expectations when you're selling the business.

487
00:39:06,686 --> 00:39:07,998
Go out there.

488
00:39:07,998 --> 00:39:10,949
Look at the marketplace, look at what other companies have been sold for.

489
00:39:10,949 --> 00:39:17,301
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.

490
00:39:17,301 --> 00:39:27,033
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

491
00:39:27,033 --> 00:39:30,664
you sell it will catch you up and you'll be looking over your shoulder all the time.

492
00:39:30,664 --> 00:39:36,576
So make sure your business is in a good position and you're confident that it is going to
carry on.

493
00:39:36,608 --> 00:39:40,020
because you probably won't get all your payout on day one anyway.

494
00:39:40,141 --> 00:39:41,182
Some will be retained.

495
00:39:41,182 --> 00:39:46,876
I'm guessing you have exactly the same and your warranties will catch you if you're lying.

496
00:39:49,516 --> 00:39:51,368
Very sound advice.

497
00:39:51,570 --> 00:39:54,425
And that's probably a good place to wrap things up.

498
00:39:54,425 --> 00:39:56,398
So thank you very much.

499
00:39:57,514 --> 00:39:58,409
My absolute pleasure.

500
00:39:58,409 --> 00:40:01,160
What type of businesses are you investing in Barnaby?

501
00:40:01,590 --> 00:40:03,403
I'll just press stop.