Jeremy Harbour: From 1 million to 13 Million in Revenue | The Authors Unite Show #947

I always thought to be successful, you had to start a business and run, work really hard. Then the business I started after the one I just described to you failed was a telecoms company. Telecoms at that time, this was the late 1990s, was incredibly acquisitive. It was very fragmented. There were hundreds of thousands of small operators, and it was very acquisitive. Everybody was trying to buy everybody else because it was a quick way to scale. Your business. You could add a million of extra revenue just by acquiring somebody with a million of revenue. Consequently, my weeks were punctuated with these meetings with these companies that were trying to buy me. The interesting thing is all their deal structures were no money down. They weren't going to put any of their own cash in. They were going to— it was money over time or various other structures. I basically just, in my mind, went, okay, hang on a second, I haven't got any money either. Why don't I be the buyer instead of the seller? I ran around a bunch of telecoms companies and pitched them ideas about how we could join forces, merge together, I could acquire them, pay them out later, they'd be worth more by joining me, et cetera, et cetera, et cetera. Mostly not getting it right. I was very young, very green. Then I found one that was motivated. He was one that literally the building he was in was about to be demolished, and he had to move out and he didn't really want the expense of moving to a new premises because it was a small business, but he had 1,000 customers and we were connecting 1,000 customers a year. So this was a year's worth of revenue for us, a year's worth of customers. And so anyway, I put my offer on the table for just literally paying him over a period of time after buying it, a purely deferred payment plan, vendor finance, they sometimes call it, or seller finance. And he rejected that. But as the clock got, the clock was ticking and it got closer and closer to kind of demolition day and the other offers that he was talking to kind of didn't materialize, which is often the case. There aren't that many buyers of small businesses out there. I ended up getting the deal by default and that was lucky, you know, so I had some luck, but then I put myself in luck's way. So I guess that's how I got lucky. And, but it was an epiphany because we grew by a year's worth of sales in an afternoon. I didn't take any risk of investing in marketing or doing any sales or anything like that. We just added these customers to our to our customer base. It was entirely self-financing. And it just taught me that that was possible, even though it wasn't, it was nothing like a deal I would do now, but it taught me that you could do a deal like that. And that was a real game changer for me because it was like, you don't have to run the marathon. You can just run the last like 10 yards and you still get the medal. You know, you don't have to do this, all the blood, sweat, and years I've been investing in businesses. So after that, I went on a rampage. 2 weeks later, I bought an IT company using a very similar kind of deal structure. Yeah, and because it was kind of like breaking your virginity, you know, once you've done it, like, fuck, can I do this again? Yeah. How do I do that? That was awesome. How do I do that again? So I went and did another one and we grew that business like crazy over the next 18 months. In fact, went from 1 company to 12 companies, went from £1 million revenue to £13.5 million revenue, went from like 20 staff to 135 staff, all in 18 months. And that sounds really impressive because I've used all those great highlight numbers. It was actually fucking chaos. It was so hard. I often say to people, the only thing worse than running one shit business is running 12 shit businesses. It's actually really, it was really, really tough, really hand to mouth. I often described it as robbing Peter, not always paying Paul, trying to juggle 50 things at the same time. It was, and you know, as the the CEO is the guy at the top, you tend to only deal with the worst, shittiest, most unsolvable problems that everybody else has. It filters through all the various different departments and finally, when it lands on your desk, it's almost impossible to solve. You get a few of those every day. Absolutely. It really keeps you interested. Anyway, then I sold one of them. One of them went bust. That was a massive lesson for me because the one that went bust was one that I thought was just a keeper because it had a 3-year contract with the world's largest insurance company. The world's largest insurance company was AIG, and they themselves went bust in 2008. We had too much exposure to one client, which is rookie error. Nonetheless, the one that I thought was the cash cow and the keeper wasn't. The big lesson in that period of time was you don't make money running businesses, you make money when you sell them. What I've done is I bought all of these companies is take more and more income from them, What I realized is the income is just what you spend, so your lifestyle expands into your income, and you don't really end up with anything left over. But when you sell a company, you have this capital event that can really change your life, because you can deploy that and create passive income that can have a transformational impact on you. I learned two things really, which is that you make money when you sell, and the right time to sell is now, because something— you have a pandemic, for Christ's sake, or a global financial crisis, or Google could do it for free or Amazon could get into your line of business or whatever, you know. So, oh yeah, Amazon does that a lot. This product's going well, let me replicate. Exactly.