How to Buy A £4m Annual Revenue Business For £1
Recently, I bought a business with £4m annual revenue for £1.
At the time, my own business was doing less than that in annual revenues so, in one afternoon, I more than doubled the size of my company.
You’re probably wondering why anyone would sell a business—something they’d poured their time, money and energy into for years—for just £1. What was wrong with the company? Why would they do that?
Here’s what I discovered:
It was a private equity-owned company and was ‘unloved’—it had been largely ignored and hadn’t grown as rapidly as expected. On top of that, a complicated ownership structure and several changes of management team meant that the ROI just wasn’t there.
Now, for a PE firm with hundreds of millions of pounds worth of assets, £4m of annual revenue wasn’t that interesting. To me, however, it represented what would have taken me five or more years to achieve in this particular market.
Oh, and I should have mentioned, the company wasn’t making any profit.
But I knew why it wasn’t making any profit, and I knew how to fix it.
So, I did the deal to buy all the shares for £1. As there were 37 shareholders, it meant there were a lot of meetings, but we got there eventually.
Once everything was signed off, I owned the company, and I had bought it without spending any of my own money.
I then set about making it profitable. That mostly entailed cutting costs and removing overhead.
- The company cars and big offices went.
- The expensive (but non-contributing) management team departed.
- Every penny was monitored.
- Loss-making divisions were closed.
- Some tasks were outsourced, and some were insourced.
Six months later, I had a £2m EBITDA company and decided to hire a business sale agent to sell it. Big disappointment—but that’s another story. Eventually, I sacked the agent and marketed it myself.
I found a buyer and concluded a deal, just 11 months after buying the company.
You could do this too. You could buy an underperforming, unloved company without using your own money, turn it around and sell it at enormous profit.
If you’d like to learn how to do it, I’m running a one-day seminar in London in October where I’ll teach you the process.
Email me on jonathan@RichmondHouseInvestments.com, and I’ll put you on the list to receive more information.