In this video of our Deal Insight Series, serial entrepreneur Jonathan Jay talks about some of the challenges you face when buying a distressed business.
The transcript of the interview follows:
What do you think is the most challenging aspect of looking to acquire a distressed business?The most challenging aspect of buying a distressed business or a business out of administration is that it is a lot of hard work. You discover a new problem every day and everything that you’ve been assured about doesn’t come to pass. Basically, everything is a problem, which is why it’s distressed. But that’s why you’ve bought it for a very nominal amount just a few thousand pounds sometimes just a pound, that’s why you’re getting a deal. You’re getting a bargain, but you’ve got to work hard at it. But there are some people who have made tremendous successes of businesses that were dying under the existing management. My first piece of advice typically is get rid of the management team - the business probably went wrong because of the management team. Get them out the door as quickly as possible and take control of the company’s finances. You don’t want a business that’s leaking cash. You’ve got to be a little bit of a control freak with this. But you need to take control of the business, get rid of the management that messed it up and be prepared for quite a few sleepless nights.
-------Jonathan Jay is the founder of The Dealmaker’s Academy.
If you’re looking for distressed opportunities, we list all UK Administrations, Liquidations and Winding Up Petitions daily. Our members receive daily email updates with new listings, if you are looking to profit from buying distressed companies Business Sale Report can help you stay in the know.
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