Jeremy Hall – Confessions of a serial entrepreneur

Three years to build a company and then sell it for over £1m…follow the journey

Archive for July, 2011

31 July
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Oh dear me…..

Posted by Jeremy Hall in General Posts

We have just caught a supplier out – he was not telling the truth. I have to say, I am surprised and pissed off.
We have moved offices and switched telephone numbers. Our telecom provider has sent us an invoice for £350 to redirect the lines. He confirms by e-mail this is a BT cost and he is making no margin on it. This is normally a free service so I ask my colleague to check this with BT who reliably informs me that we are right, there is no charge. My polite e-mail back to our telecoms provider points this fact out. He replies and reduces the cost to £165.00.
I have established the truth, he is lying. Well, what do I expect, we do not do any more business with him now we have changed numbers.

30 July
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Playing poker

Posted by Jeremy Hall in General Posts

My nine year old boy has just received a poker set for his birthday. I have not yet decided if this is an appropriate present but it is definitely better that the chain saw I gave to my 80 year old Dad for his birthday!
Over the last eight weeks I can reflect on two clear situations where my customer has been playing poker with me. In both instances, we have leased equipment to these companies and they have got to the end of their three year lease. We take title to this equipment and can either take it back or sell it to the customer via an “infinite rental.”
Poker match one. I wrote to our customer saying he can keep the waste equipment for £5,400+VAT or return it. Various correspondences later, they made an offer of £500.00 or just come in and remove the kit. He said he did no longer need the equipment and we could remove it when we liked. His assumption is that we cannot be bothered to take it back and would not be able to sell it. If he was telling the truth, this would have been a pain for us. He was hoping we would say, “OK, we accept the £500.00.”
I e-mailed him asking for pictures and confirmed we would pick it up. As it happens, I was not playing poker, we really did have a customer that was going to buy the kit. His e-mail came back saying OK, we will accept £5,000.00. The truth was out.
Poker match two. This was a much harder match to play, she did not disclose her cards to me until the end. The same scenario applies here. Our request was for £1,500.00, she was offering £100.00 or pick the equipment up. We both know the old tills and software was worth no way near £1,500. My question was “is she really going to buy a new system?” It took some time to work out that she had no interest in replacing the system with new equipment and hence had no option but to keep the old kit. Interestingly, along the way we were both betting – I was reducing the quantum from £1,500 and ended up nearer £1,000. With hindsight, there was no need for me to reduce my price as all along she had the intention to keep the equipment.

29 July
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Finding out the truth

Posted by Jeremy Hall in General Posts

Mr. Big said this to me recently. When buying/selling/negotiating with someone, you must find out the truth. (Apparently this was an important lesson from Sir Terry Leahy (Tesco). He points out the importance of always finding out the truth.) So what do they mean and why is it so important?
When I am buying a company, the first question I ask myself is why are they selling? Forget what they tell you, question them and really understand the truth behind their decision. If a company does not pay you, is it because your product does not work, they do not have the money or are in much deeper in the proverbial than they are letting on? When you sell a company, what are the new owners really going to do with the business? When you are selling your product/service and you are being told about the competitor with excellent pricing and stock availability, are they telling the truth of just trying to get the best deal.
In business, sometimes truth and lies are not black and white, they are a shade of grey. To be successful in whatever you do, you have to find the truth about what is really making the other person tick. You cannot do that if you talk too much…

28 July
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I talk too much

Posted by Jeremy Hall in General Posts

I met up with the MD of a company at my favorite London hotel, The Landmark, recently. It is irrelevant what the topic of conversation was about, all I remember is leaving the hotel thinking I spoke too much. Great entrepreneurs, business leaders and noteworthy sale people don’t talk, they listen. It is the most simple and important single thing that a successful person needs to know. When meeting people –shut up and listen. Mostly, they do not give a toss about what you have got to say anyway. The only way we learn and understand is by listening. Too many – apparently good – salespeople talk themselves out of an order.

27 July
127Comments

Other ideas for Who’s Who

Posted by Jeremy Hall in General Posts

Even to this day, I still dream about all the other ideas I have for this business. So many business colleagues I speak to about selling Who’s Who say the same thing, “DON’T SELL IT”
They sit there next to me and rattle off a whole barrage of ideas of how to make a million from this company. Even the other day, we were looking at obtaining data for our leasing company. “How many records (in our Who’s Who database) have the word “computer” in. 7074 is the number. Ok, let’s look at “recycling” – 887, and then “waste” 516 records.
The value is in there – somewhere!

26 July
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I do not want to sell a business to you

Posted by Jeremy Hall in General Posts

Yesterday I said that the first person to write the cheque out will get the company – within reason. What do I mean by this.?
When you build and develop something, even if you sell it, there is the desire the business ends up in good hands. I see this with elderly people who want to sell their home of many years where their children have grown up in and enjoyed the garden. They do not want to sell to a property developer who will just stick up a number of houses on the plot. OK, my parents did that, but it did not emotionally affect my brothers or I.
The same applies in business. If I was to sell to someone/a company that damaged the brand in the future, this could have a negative impact on me just by a previous association. OK, there may be nothing stopping the new owner doing what they want with the company and certain circumstances may be out of their control, but you can mitigate these situations up front by choosing the best candidate – and that buyer is not always the person who offers you the best financial value.

25 July
143Comments

Listening to your wife

Posted by Jeremy Hall in General Posts

Judy does not pass comment on my business on a regular basis. If there is some advice I need, she will always be there to help. So it is with interest that the other day when we were talking about a small monthly consultancy job I do to help a company, she simply just said, “you need to buy up these failing companies” and turn them around.
She is so right. Her comments were left ringing in my ears. I know this is what I enjoy, what I am good at and importantly, what will make us £1m in three years.

25 July
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Arriving at your for sale price

Posted by Jeremy Hall in General Posts

Mine is £90,000, the price is in the public domain highlighted in The Sunday Times advert a few weeks back.
Will I get more than £90,000? – no. Why, it’s simple, the first person to write the cheque out (within reason) will get the company. Yes there is the chance there will be a bun fight over the business and we will play one company off against the other. This does happen but is not necessarily the way I would do things. If the company was much bigger and the sale price higher, then this would be a very different story.
Will I accept less than £90,000? – probably not. Why is this? Looking at the facts…
1. I do not have the time or enthusiasm for the company – at the moment. This may change in the future so I could just hold onto it.
2. Even if we hibernate the company I would/should get a 25% return on the £90,000 every year. i.e. the business should make a net profit of at least £22,500 this year.
3. There is the perceived value of owning this company, i.e. the value to my personal reputation in business. Some people may have an Aston, other a holiday home or a restaurant, for me it’s Who’s Who
4. My total investment is significantly higher than £90,000. I understand I will take a burn on this investment – OK a big burn – but it reaches the point where it is just not worth selling
5. All it takes is one meeting, one chance encounter, one idea and we could build Who’s Who into a company and sell it for £1m plus!! It is a bit like holding Premium Bonds, the value does not go up or down over time, but you never know, EARNIE might just send that £1m prize money to you.
6. Following the theme above, the data of people in our publications is highly valuable. One day I might find a way of extracting value out of this data.

24 July
55Comments

Do you disclose price when selling a company?

Posted by Jeremy Hall in General Posts

This is a very difficult question to answer. Do you tell any potential acquirer the asking price and other key conditions you need satisfied upfront, or do you wait to after you have met and spoken to these people.?
It depends on what you are selling, the potential interested parties and the size of business. I am sure with a bit more thought and time, we could all add to this list.
I have questioned long and hard about this with regards to selling Who’s Who. My answer was simple, yes, I need to disclose the price up front. There are a few key reasons:
1. I want to immediately flush out those companies/individuals who do not have the money
2. I have a real concern that due to our perceived brand, the perception of value is high. For example, on holiday one year I noted to a person I owned Who’s Who. “Wow, came the reply, you must employ a thousand people.” Hence, there are definitely people interested to buy our company but would not bother even enquiring as they would feel the price would be too high.
I am not advocating always disclosing your cards up front and displaying your for sale price, but in this case I feel it appropriate to do so.

23 July
62Comments

Time to get down to the detail

Posted by Jeremy Hall in General Posts

Its time to get down to the detail. I am being asked for specific financial information on the business and data to help potential acquirers understand exactly what they can do with the company. It is surprising how many companies I visit where the key staff lack knowledge of basic facts – how many customers do you have, what is the turnover, where are the customers located etc. Never underestimate the time and effort it takes to get this data together. Having sold a number of companies in the past, I can honestly say it is a full time role.

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