Discover why building a world-class deal team is non-negotiable. Learn how Gavin survived a near-fatal cash flow crisis on his first acquisition and bounced back to secure a second highly profitable deal using the target company's own cash.
Before discovering the Dealmakers frameworks, Gavin jumped into his first acquisition. He targeted a print brokerage earning £500,000 in a specific niche. He negotiated a purchase price of £275,000 and cleverly used £100,000 of the target company's own cash for the initial payment.
However, lacking an experienced commercial lawyer on his deal team, Gavin agreed to a severely compressed 12-month deferment period for the remaining £175,000. This incredibly short timeframe put his existing business under massive cash flow pressure when the pandemic suddenly hit.
He was forced to battle the former owners and negotiate a nine-month extension just to survive. The lesson was crystal clear: having the right experts by your side to structure the deal safely is absolutely vital.
"Looking back, I feel I should have probably changed it to be paid over three years rather than 12 months, as it put us under quite a bit of pressure cash flow wise. It nearly sunk us right at the end."
Armed with new knowledge from the Dealmakers Mastermind, Gavin completely overhauled his approach. He sent out just 75 direct enquiry letters and quickly generated multiple phone calls from interested sellers. Because he had a pipeline, he was no longer desperate to make a single deal work.
He narrowed his focus to a 60-year-old owner looking to retire. Taking control of the negotiations, Gavin used a simple non-disclosure agreement and secured the high-end stationery business for just £40,000.
He structured the deal beautifully, once again utilizing £30,000 from the target company's own bank account to fund the upfront payment.
The true magic of the second deal was found during the due diligence phase. Gavin realized that the acquired business had terrible supplier contracts. He knew he could add £30,000 to the bottom line instantly just by switching the acquired company over to his group's existing paper supplier.
Without winning a single new customer, Gavin unlocked an extra £60,000 in pure profit across the board. The acquisition even generated a £10,000 deal fee which Gavin used to lease a brand new Range Rover.
His ultimate goal is to build a group of six companies, step away from the daily operations entirely, and draw a £50,000 dividend from each entity every year.
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