Entrepreneur Jeremy Harbour has set himself three months to build up his five businesses to the level where he can manage them from his new home in Italy.
Here is his hilarious diary of his frst few months.
Tuesday 22nd August 2006
I just watched that advert that tells us most accidents happen within three miles of your home. It shows the guy getting up following the same routine every day and then one day comes off his motorbike.
Watching it makes me realise how scary the thought of a mundane existence is. I imagine waking up one day having done the same thing for five years, and thinking damn…I can’t get that back.
Wednesday 30th August 2006
I was getting worried about the call centre business. We expanded capacity to allow for growth (new 5,300sq ft office), but I was starting to wonder if growth would come before the extra costs we had taken on really kicked in. Then two deals the MD Barrie Collins has been working on for probably over six months each came in within 24 hours of each other, bringing in a total in excess of £1 million per annum – enough for us to get some decent leverage on our new overheads. Funding it will be a challenge: it requires us to double our staff in about six weeks and then more to come at Christmas, which is always a tricky trading period.
Monday 4th September 2006
How am I going to manage growth and performance from miles away? I have always struggled with business plans and cash flows, as all my businesses since I was 14 years old have always been very dynamic (for which read erratic and unplanned) and often go in very different directions than those frst planned. Inevitably you end up constantly tweaking the plan and extrapolating the figures through to the end of the year where you see how many millions of pounds you end up with.
But do they work? I thought it was a far better use of time and far more accurate to focus on the next 90 days. So I distilled the business plan into what are our outcomes, and then did three months of action points.
This sets a series of deadlines to manage so rather than trying to manage the goal I am managing the action – should be able to do that from the roof terrace.
The plan then is to simply have a once a month session where we discuss adding the next month to the plan and making the adjustments we know are right and wrong so far. Sounds great in theory doesn’t it?
Tuesday 12th September 2006
This whole ‘leaving town in three months’ process is such an eye opener. It really is a very healthy exercise I highly recommend it.
Friday 15th September 2006
I had an offer for one of the businesses today: it was seven figures, I always joke I have bought six companies in my time, but I have yet to sell one, I must admit I am tempted. It would make operation dolce vita a lot simple. Thing is they wanted to do a reasonable percentage on earn out, so my first question is what they were going to change when they come in? And the answer was, ‘lots’. They want us to fully integrate with their operation. How can I accept an earn out if they are going to move all my toys around? I will supply them with the info and see where the conversation goes. It is always useful to know what they value and what they don’t. It has been said your most important customer is the one who eventually buys your business. I say they will only buy your business if all your customers are important.
Tuesday 19th September 2006
I have now finished producing the 90-day plans for all of the businesses. These are great, and produce lots of valuable action points and are better than just a normal board meeting. I was planning on doing nothing and finding somewhere in Italy until maybe October or November. However, I have come across something really nice that ticks all the boxes, but I want to try and avoid getting carried away with where I am going to live and taking my eye off the ball of getting my businesses in shape to leave. Cart…horse, etc.
Monday 25th September 2006
I have decided to accept an offer of investment into one of my businesses. I have always shied away from investment and given equity to my MDs instead, but I am now thinking had I just taken the hit a few years ago I may be a lot further down the road now. I think you have to realise that capital could help you grow quicker, and you can then exit quicker and go and do something else. And this you can do exactly how you want and keep as many shares as you like. It is all too easy to assume that you only have one shot at it and that this is the business that is going to do it. Any Dragons’ Den pitchers take note.
Thursday 29th September 2006
Bloody hell, I am a month in, I have done lots, but just as many things still to do, this really does put you under pressure. Still I am going to make it happen, and I am going to do it properly. I have now set the scene for a monthly day and a half meeting where effectively I have a board meeting for each of the five businesses and then a group meeting to discuss exploiting our synergies and working each others customers better.
Friday 30th September 2006
Had a meeting with a small IT business that has been trading for five years that I am looking to buy. I have put an offer to him and will call him in 10 days, it is a great fit, he is a nice bloke and has a good honest business (in my judgement), but has not had a holiday for five years and it shows. I think this one will happen. Will have to wait and see. I must look for more IT companies, this works for me and them – and that is the very essence of a good deal.
Wednesday 4th October 2006
I almost have my tips service sorted, the idea being to offer a subscription based tips service to business owners to get them thinking in a different way and perhaps deliver them that killer tip or inspirational idea that will transform their business. I have about 200 I have written down in a pad over the last 18 months at one tip per week that should keep people motivated from start up to exit.
Monday 9th October 2006
Things are really starting to motor now; this is a pivotal week. I have taken on a PA. She starts at the end of the month. I have recruited her from within the group of companies so she already has an understanding of what we are about. This will help get me organised and be my ears and eyes back home when I am lunching on the roof terrace in bella Italia. We had 12 new starters today and we have 36 vacancies at the moment. I am now losing count of the staff numbers, when the current vacancies are filled we must be on about 110 people. I will soon find out when we do the payroll.
Tuesday 10th October 2006
I did a deal today I really like: one of my businesses needed some cash flow and I was exploring a few options.
This is how the deal worked.
We approached a major supplier – their service is our principle sales line so they are far and done a deal whereby they supply us for the next six months (there is a financial figure associated with this), and we put all their invoices into a separate section on the balance sheet and we keep it there as a loan.
At the end of the period we go back to paying them normally moving forwards. A further 10 months later they can ask that we repay the loan over the following 10 months or they can convert it into an agreed percentage shareholding based on today’s price. Effectively, it is a convertible loan at an option price based on percentage so they have no issues with dilution. It is a real win win.
They get:
A piece of the action in a route to market for their goods. The security of being a creditor so they can move in as a major creditor if it all goes wrong; And exclusivity from us to use them and their margin as a discount on their investment.
We get:
potential future acquirer; The working capital we require; A knowledgeable and useful partner rather than an angel; To whiz through due diligence as it is a very simple deal with a known quantity.
And we can also move from being a current creditor to a long-term liability on the balance sheet, making us look a bit better.
Wed 11th October 2006
Bugger, the PA turned down the job as she has a child and I guess it could be long hours. Never mind, back to the drawing board. I do have a recruitment company so no great shakes. y pivotal week I have three key meetings today: one of them is to get a supplier to sharpen its pencil on a deal we are doing as we need more margin to make it stack up. I then have a meeting with a new bank, RBS. I have been looking for one back to handle all five companies. Also meeting a very interesting marketing company. They specialise in the cross sell-up opportunities in your existing customers, I have known them for about two years.
Thursday 12th October 2006
Had a shaky moment with the trade investor. They started to renegotiate some of the deal, but we have it straightened out now. As always it comes down to valuation, which is terribly subjective, anyway we have found a way forward by limiting the monthly amount of investment to deduct from invoices rather than the overall investment, so sorted. Still have not sorted out funding for the call centre to support its new clients. That is my mission right now, looking at factoring and payroll finance first, as it supports the growth flexibly. It is a relatively new business, which always makes it harder – but we will see.