Focus on: The Harbour Club
The Harbour Club, an exclusive ‘bootcamp’ for serious entrepreneurs, was launched a decade ago this month. To celebrate its 10th birthday, Lucy Bryson shines a light on one of the world’s most successful ‘how-to’ courses.
Since the early 1990s, entrepreneurs have been glorified by the media and touted by politicians as the saviours of our day. Nothing fires the imagination – or wins more hearts – than an inspirational rags-to-riches story. The meteoric accomplishments of a select few motivate the rest of us to dream bigger and to achieve our own financial destinies.
But behind the headlines and vote-winning speeches lies the gritty, unglamorous truth: most ventures fail within the first five years and those that do survive into adolescence are saved not by savvy innovation but through dogged, obsessive determination. In the UK, home to 5.7million small and medium-sized enterprises (SMEs), owners work 13 hours-a-week longer than the national average. Less than half have holidays and almost a third suffer health issues due to the stress and pressure of running their firms. What’s worse, some 40 per cent of SME owners don’t have cash at their disposal because it’s tied up in their businesses, and fewer still have any practical way of making an exit. The notion that ‘If you own it, you live it’ could not be closer to the truth.
The Harbour Club is turning that paradigm on its head. Here, entrepreneurs are taught how to “hack” the system by acquiring other businesses for no cash upfront, whipping them into shape, and selling them on. It is, according to its founder Jeremy Harbour, a smarter way to make money. “It’s one of the greatest ironies – and injustices – of becoming self-employed. Most entrepreneurs start a business to live the dream or to escape the rat race but becoming intrinsically tied to what they’ve made. Their ‘baby’ takes up all their time, money and energy and, like children, rarely returns it - at any time.”
The course (which is almost always sold out well in advance) is run over three days in London, UK; Singapore; and Miami, USA, a handful of times each year. It’s best described as a business bootcamp in that it teaches delegates how to think like detached shareholders rather than emotional (and quite often precious) business owners. The focus is on mergers and acquisitions (M&A) and, in particular, ‘distressed’ or ‘motivated’ acquisitions where the owners are keen to sell and a buyer can use their proven strategies to ‘fix up’ the business and sell at the right moment for a tidy profit. Those who attend become lifetime members of the exclusive Harbour Club community which, amongst its benefits, offers direct access to Jeremy Harbour for free and unlimited deal advice.
Since it was created in 2009, The Harbour Club has been providing experiential training to entrepreneurs, prepping them for the real world of buying, fixing and selling SMEs, and there are now more than 500 members worldwide. Rather than dry theorising, Harbour tells attendees exactly what they should be doing as well as when and how they should be doing it. With the right strategies in place, entrepreneurs can free themselves from managing a business to building business empires — with little or no financial outlay. “It’s a myth that M&As require ready capital, middlemen, and significant legal legwork. With the right tactics and conversations, M&As can be done directly and without any legal legwork,” Harbour says.
Delegates freely admit that Harbour, a global leader in the field of small business M&A, pulls no punches and does not shy away from his own business failures. “I want others to learn from these mistakes, and not bump their heads in the same place,” he says. Harbour, like many successful entrepreneurs, learned the hard way. Having run small money-making schemes since his school days, he sank time and money into an amusement arcade venture at the age of 18. Despite his best efforts it “failed spectacularly”.
Harbour learnt by own his mistakes and went on to acquire more than 100 businesses internationally. (He is now the founder and CEO of the private equity firm, The Unity Group and was named Coutts Entrepreneur of the Year runner-up three times).
“If entrepreneurs add growth by acquisition to their existing organic growth strategy, they will quickly improve their business and create shareholder value,” Harbour, who was born in Britain and now lives in Singapore, says. “It is only by creating shareholder value that entrepreneurs can really create the freedoms they originally aimed for.”
The Harbour Club seminar has been described as “gold dust” by past attendees, though they will often add in the same breath about how it can also seem a little overwhelming at first, simply because there’s so much information condensed into just three days.
The seminars are held at hotels close to major airports, such as Miami International or Heathrow, and run between 9am and 6pm per day, followed by dinner and networking in the bar until 10pm. The second day is notable for featuring a breakout session, where one topic in particular is covered in more detail.
The seminar is delivered by Jeremy himself and covers topics including how to find new business opportunities and seal that all-important deal; the tactics to buy a company with no money upfront; insolvency law; and planning the perfect exit strategy for six to seven-figure profits.
Paul Seabridge, pictured, attended The Harbour Club in October 2017. Within four months Paul, an entrepreneur, private investor and corporate advisor, had closed four new deals using the strategies he used on the course. The first of those deals was for the small letting agency that he already owned. He’d wanted to sell the company for some time but had hesitated because the size of the business meant he would not secure a good price through a traditional trade sale. Using the know-how learned during the Harbour Club seminar Paul employed an offshore loan model to sell it to one of his key employees for a much better return.
Paul also acquired a concrete manufacturing company that had a £1.2million turnover but significant debts running past £400,000. By utilising the Harbour Club’s tactics on restructuring, Paul expects the business to be making a £250,000 profit within 12 months - and be free of its debt burden – at which point he plans to sell it.
The third deal was for an estate agency and lettings business that was far from distressed but where the owner was still looking to exit the market in order to concentrate on other more profitable businesses within his portfolio. By applying Jeremy’s advice into how to conduct an M&A with no cash up-front, Paul acquired a 49 per cent stake for a nominal sum of £1. He now plans to scale up the company and exit, both to his and the original owner’s benefit.
The final deal was for a kitchen and bathroom retailer that despite a £4million turnover was a distressed concern with significant debt. Paul acquired a 20 per cent share, and effective ownership, for £1 and teamed up with a fellow Harbour Club member who had experience in that sector to restructure the company without insolvency.
Paul went on to become a Harbour Club delegate, attending a ‘Super Conference’ in London in May 2018, where he took to the stage to share his experiences and details of the acquisitions he’d made with other guests.
Guari Talathi-Lamb is co-managing partner at Iolas Capital, alongside her husband. After attending the Harbour Club, mum-of-one Guari was able to secure her first deal while also holding down a full-time job. Following Harbour’s advice to approach distressed or motivated businesses directly by letter or phone, she connected with the owner of a 156-year-old company with a £3.2million turn-over and 22 members of staff. The business, which specialised in outfitting cinemas, theatres and business parks, was distressed and this had got to the point where it was affecting the owner’s wellbeing. The owner initially was seeking to sell for around £1million but after a period of negotiations, and utilising Jeremy’s tactics, Gauri was ultimately able to buy the company for £1. The company has a firm existing client-base and sizeable orders of up to £2million so, after a period of restructuring and consolidation to bring the company back to an even keel, she plans to exit at a significant profit and potentially leave employment to strike out on her own as an entrepreneur.
“You have given an amazing toolkit. I’ve not only used it for what I’m doing right now with the company I’ve bought, but also in my personal life. You can use it for your workplace and instead of going there, getting a salary for doing a day job, I’m now looking at it as a stakeholder. It’s shifted the way I think,” she said.
Like many owners of SMEs, Liam Bowmer found that the running of his IT company was limiting his freedom to pursue new business interests. However, within six months of attending the Harbour Club he successfully closed a deal that would enable him to break out of that all-too-common trap, and make a tidy profit in the process. Using Jeremy’s guidance, Liam was able to agree a merger with another IT company, a process that began simply by him knocking on the door of the company and striking up a conversation. The deal was done within one week with no fuss, as he explains. “The pack I got from the Harbour Club was just gold dust. Rather than trying to go through lawyers and building up the cost and complexity, which could have even put the deal in jeopardy, the fact that there was a template there that you can run through, and understand the benefits, lubricated the whole process of getting the deal done.”
Liam took a stake in the acquiring company and, as he says, “Now that this deal’s gone through I don’t have to deal with any staff anymore and customers are dealt with by account managers. If you’re running your own business then you are really strapped for time, whereas if you can put in the hours to try and make these connections and make it work then it starts a snowball effect. Now I have much more time to concentrate on just doing deals.”
As an added bonus, and again by calling on Jeremy’s training, Liam also negotiated a second deal with the IT company by spinning off the remaining assets of his firm, which were largely infrastructure-based, and leasing them back to the business on a fixed contract. “Now I’ve another little business which I put no money into and which has a contract with a big IT company for five years,” he adds.
“The key thing to take away from the Harbour Club, that helped me most, is just the principle. I’ve stopped running a business and now go in with the point of view of a shareholder.”
For more information about The Harbour Club and its courses, visit www.harbourclubevents.com.
Focus on: Jeremy Harbour, founder of The Harbour Club
Few people know the world of mergers and acquisitions quite as well as Jeremy Harbour. The British-born, Singapore-based financial high flier has been honing his SME business skills since his teens, and today he is a leading figure in the world of buying and selling small businesses.
Not only is Harbour a mover and shaker within the industry, he’s actively shaping it. His patented Agglomeration™ model of collaborative acquisitions has changed the way many people do business, and he is helping to create a new wave of successful entrepreneurs through his Harbour Club events - ‘business bootcamps’ that equip attendees with all the strategies and business acumen they need to make a success of their own ventures in buying, ‘fixing’ and selling businesses.
CEO and founder of the Unity Group of Companies, a private equity firm specialising in helping entrepreneurs grow their businesses, Harbour is a self-made businessman who has completed over 100 M&A deals and advised on over 200 more.
He regularly appears as a keynote speaker at business conventions across the globe, has been invited to Buckingham Palace and has advised British Parliament on issues relating to entrepreneurship and investments.
It’s fair to say that Harbour has business acumen in his blood - at the age of 15 he was already involved in a part time business at a local market, and left school early to pursue a dream of running his own business - the first, an amusement arcade, ‘failed spectacularly’ by Harbour’s own admission.
But far from being disheartened, he looked for a smarter way to do business, and soon moved into the world of acquisitions, realising that he could make more money - and spend less time mired in daily running of a business - by buying and selling than he could by running his own company.
Having carved a highly successful niche in the field of buying, fixing and selling ‘distressed’ SMEs, Jeremy Harbour founded the Harbour Club in 2009, as a way of passing on the tricks of the trade to budding entrepreneurs. Today there are some 500 members who attend experiential workshops, led by Harbour himself, in the UK, USA and Singapore.
In 2012, Harbour authored his how-to business guide, Go Do! It went on to rank highly on Amazon and receive widespread acclaim. The following year he began to think seriously about how to improve the ‘seriously unloved’ investment area of SME, and formed a business partnership with fellow entrepreneur, and author of Progressive Partnerships, Callum Laing. The pair coined the Agglomeration™ business model, which Harbour describes as: “a sort of co-operative IPO, a group of companies from the same industry joining forces and publicly list, then acquire more companies in the same space”. In 2016 Harbour and Laing presented the concept to the world with the publication of Agglomerate: From Idea to IPO in 12 Months. Again, the book was met with rave reviews and solid sales.
Harbour founded The Marketing Group (TMG), the world’s first global digital marketing network that is using the Agglomeration model, listed on Nasdaq First; and in 2018 Unity Group listed the MBH Corporation, again using the Agglomeration™ model, in Frankfurt.
Known for his charisma and communication skills as well as his business smarts, Harbour has appeared on The Money Channel, and has been featured in the Financial Times and Sunday Times, among other publications. He currently lives in Singapore with his wife and children.
For more information visit: jeremyharbour.com.
Q&A With Jeremy Harbour, founder of The Harbour Club
We sit down with the M&A expert, Jeremy Harbour, to find out more about his exclusive ‘business bootcamp’, The Harbour Club.
Q: How did you first come up with the idea for The Harbour Club? How has it evolved since it was launched in 2009?
A: I started out like most traditional entrepreneurs with a focus on start-ups, sales and staff. One day, in the 1990s, that changed when I acquired a telecoms company that was 13 years old, without using cash up front, which effectively grew my current business by a year’s worth of sales in a single afternoon. It was a total epiphany - all my closely-held beliefs about how to grow a business had just been directly contradicted. I had found a value hack: you don’t have to run the marathon you can just run the last 10 yards and still get a medal. I then went on to buy several more companies over that following year.
I later sold my first business and had another ‘eureka moment’ – that you make money not from running a business but by selling it. By about 2008 I was getting a reputation for being able to buy and sell companies - I had done around a dozen deals by then - and people were also aware I was often doing deals that didn’t require cash upfront or bank debt. People started to ask if I would like to do some consultancy or sit on their board as a non-executive director and help them acquire competitors in a similar way. I could not think of any good reason why I would do that – better to do it myself and make a six or seven figure return than do the same role for a far smaller salary.
Then I bought a seminar business which offered business and entrepreneur-based seminars. It had revenue of $3.5m but had got themselves into a cash flow pickle. I bought a majority stake for $1 and fixed the company. While I was there, I gave a speech at a three-day event they ran in London on business turnaround tactics and then watched the other speakers for the weekend. It was then I was struck with the solution: instead of working for people I could run a seminar to teach them all the tactics and then if they went on to do a deal, I could be proud of them. It was a fair exchange of money for information. In 2009 we did the first ever Harbour Club and since then it has grown and grown and now is a global network of entrepreneurs who support each other to do deals and create wealth. I am very active in the network and frequently chat with members on WhatsApp or Skype about deals they are working on.
I’ve now done over 100 deals and two IPOs, while Harbour Club members have done many more. The Club has evolved beyond recognition in terms of the depth of ideas and experience that we now share.
Q: What do you think is the single most important thing that Harbour Club members will take away from their first event?
A: The main shift is the mindset to move from working in businesses (staff, customers, customer value) to working on the business (mergers, acquisitions, joint ventures, exits, shareholder value) This shift from Runner to Owner is huge, and in addition it’s the practical tools and tactics used in the real world that they can implement straight away to help with that transition.
Q: What advice do you share with entrepreneurs at Harbour Club events that you wish you had heard yourself at the beginning of your career?
A: Oh, wow, everything! Most of the course is based on mistakes or learnings you might call them, when you get lessons they come with ‘school fees’ and I have paid my fair share of school fees to learn my craft, if I had known even a tiny percentage of this 20 years ago then I would have had a very different journey, but also, no regrets, I have had a wonderful journey learning all this stuff, and even the spectacular errors have been emotional drivers to go on and succeed. I think people want to know where the issues are where will they bump their head not listen to traditional text book ideas that are great on paper but just don’t work in reality.
Q: You’ve mentioned that you believe the creation of more wealthy entrepreneurs can benefit communities and wider society. Can you explain your idea, and how do you think the Harbour Club can help towards creating future millionaires and the ‘democratization of wealth?’
A: Small businesses create value, by definition they solve problems and get paid to do so , that is the essence of business, however the financial world and the general or real economy have been getting further and further apart, small businesses account for 50% of GDP and a massive majority of private sector workers and yet they are penalised at every turn, they can’t borrow money (unless the bet their house) they can’t get investment unless they are a crazy growth story or want to give up control, and when they do get some success they are hard to sell unless they are $100m+ in value, so I believe if we can unlock global capital and get it into the hands of entrepreneurs that we will empower them as society’s change agents, we need to get cash out of derivatives and hot sandy countries and into the small businesses in our communities. Now the reasons capital doesn’t flow into small business is threefold: 1. They are too risky, 2: They are too small, and 3: they are not liquid as in once you invest it is hard to get your money back out. So we created Agglomeration as a structure to solve these issues for small businesses.
Q: What do you think are the biggest myths and misconceptions that tend to hold entrepreneurs back from achieving their ambitions?
A: I think ‘start a business and work really hard’. There is more to it than that, you need to do that at least once, start-up is a rite of passage, but then you need to evolve, move up the food chain. Deal making and focussing on shareholder value is the next rung of the entrepreneur’s ladder.
Q: Have you ever had a business endeavour not work out as you’d expected, and what did you learn from the experience?
A: Very often… when you are in trouble it feels like you are walking a tightrope and everyone is hurling rotten fruit at you, when you fail, you realise the tightrope was only a few inches off the ground, you still have all your arms and legs, so if you know that failure doesn’t hurt… how fast do you run at that tightrope?
Q: Can you sum up your Agglomeration™ model for those who are unfamiliar, and explain its benefits? Did you and model co-creator Callum Laing face any significant hurdles along the way, and how did you overcome them?
A: As mentioned previously the issues preventing capital getting into small business are due to risk, scale and liquidity. The traditional way larger companies deal with this is with a roll up, that is where you put several businesses together to create one large one. The issue with owner managed small businesses (I am talking about companies generating less than £5millon in annual profits) is that most of their value is in the culture they have created with their staff and their customers and this cannot simply be smashed together with another company, it looks great in a spreadsheet but the reality is you end up destroying the value you are trying to buy. So with agglomeration we have created what is really a governance framework that allows and group of small businesses to collectively buy and control a public listed company, this means they solve the Risk issue as they become a portfolio of companies diversified across countries, currencies, products and markets. They solve the scale issue as they now have the credibility of being a fully reporting public company with a balance sheet and P&L which is the sum of all the companies put together. Finally, it solves liquidity because as a public listed company investors and invest and divest in the same day, so now investors can have exposure to profitable well run small businesses through a diversified holding, and entrepreneurs solve the issues that hold them back from growing. They all run their business as they were before under their own brand, but ultimately can get a much better valuation for the business.
Q: What do you think the drivers were for setting you on a path to be an entrepreneur? Now you’ve made your fortune, how do you stay motivated?
A: I think it was in my DNA, I can’t remember anything else, I was the annoying kid at school selling you stuff and my first proper business was at age 14, which I left school to pursue. I now have a wonderful lifestyle and family and I am lucky enough to travel a lot and do the things I always dreamed of, but I see so much in the world I would want to fix, and I see entrepreneurs as being the answer, they are the change agents in society the only thing that holds them back is they don’t tend to be wealthy, if I can help make entrepreneurs be meritocratically rewarded for their efforts they will go onto solve bigger problems, this is something I am good at and I know I can deliver so my goal is to keep doing that for as long as possible.
Q: You’ve done so much in your career so far but are there any ambitions that you’ve yet to achieve? What does the future hold for you and the Unity Group?
A: Well we are still really at the very beginning, hard to say over 20 years in, we have 2 more IPOs this year and we have a lot to prove with the agglomeration model, Harbour Club is an awesome community but we are just starting to spread our wings, we only did our first UK event in 2018, after 9 years, we had always done them at my homes in Singapore and Mallorca before.
Q: What habits or attitudes do you swear by for making it as an entrepreneur? Who is your biggest inspiration, and why?
A: Success is the best revenge, and you don’t get fat from one burger or thin from one salad, it is about habits and persistence. I am constantly learning, but I also learn by doing, try buying a company, try selling a company, try buying a bank, try listing a company, try listing a bond, just keep doing stuff, avoid advisors and expensive consultant and just read up about it then give it a go. I am a Brit so I grew up with Richard Branson in the news every week so his attitude to just doing it was hugely inspiring.