James Gardner

Approaching your first business owner can seem so daunting that it’s often easier to delay it, but as an entrepreneur, James Gardner, discovered, it’s worth taking the plunge.

Buying a Business Established in 1777

Even with 20 years of business experience, James Gardner was apprehensive about approaching the owner of a target business.

It should have been easy; a walk in the park. James had dealt with numerous business people in the two decades he and his brother had run their B2B business. They’d even negotiated a successful expansion into the US market and then the sale of their company.

He’d attended a special Dealmaker’s Academy seminar in Amsterdam, and received mentoring from Jonathan. He’d spent hours listening to Dealmaker’s Academy podcasts and watching videos on its YouTube channel.

What’s more, not only did he work for the business owner he was planning to approach, but the man was an old family friend. Still, he was plagued by the thought of the man turning down his offer. It was James’ wife who encouraged him to make the first move.

“My wife said, ‘Give him a call, meet up, and see what’s happening with him.’” A few days later, James booked an appointment to get a haircut at a salon just a few doors from the man’s business, which was a funeral firm. Before he left, James rang his former boss to arrange a casual get-together.

“I said, ‘Hey, I’m going to be in the area. Can I pop in for some coffee and a quick catch up before my haircut?’” In the subsequent meeting, James broached the question he’d been dreading: the subject of the owner’s retirement and his exit strategy.

“He was 62 at the time. I said, ‘I’m sure you’re not ready to retire yet, but whenever you are, would you give me first refusal on the business, please?’

“I was polite; I was professional. I wasn’t aggressive; that’s not my nature. It was a genuine question. There wasn’t a clear succession plan in place that I could see.

Obviously, there could have been one that I didn’t know of. But it turned out that there wasn’t one because the response was fairly quick. In the next breath, he said, ‘I think I’m ready now.’” Without a doubt, other hurdles are expected later, including the owner’s last-minute doubts about selling the business and, of course, the COVID-19 pandemic and nationwide lockdowns.

Just before the deal was about to conclude, James received a call from the business owner. “We had a small conversation in which he said, ‘I don’t think I can do this.’ We were close to completing the sale at that stage.”

James managed to calm the business owner during that call, “I said it was okay; that these things are a bit scary sometimes. I told him that it was understandable for him to be nervous, he would be parting with his family business. But at that moment, I felt as though the entire sale was really on a knife-edge.”

Fortunately, his pep talk worked, and the share sale went through without another hitch. Investing in the funeral business hadn’t been James’ lifelong goal, but it fit his criteria for a recession-proof business; one that could survive a period of economic turbulence. A recession-proof business either offers essential consumer or discount products, or provides healthcare services, repair and maintenance services or funeral services.

After selling the company that he and his brother had co-owned, James decided to become a dealmaker. He began looking for companies that fell under the ‘recession-proof umbrella’.

During his search, his mind kept returning to the idea put forward by the early English dramatist, Christopher Bullock, that death and taxes are the only two certainties in life.

“I didn’t know much about taxes apart from paying a load of them,” James admits. He did, however, have experience working in the funeral sector.

“After leaving the university, I worked for a family friend who was a funeral director in a village close to where I lived,” recalls James. Back then he enjoyed being a part of the team at the funeral directors’, but disliked the need to be on call, particularly over weekends.

“Mobile phones weren’t really that popular then,” he says. Instead, the company used pagers or landlines to contact its staff. “If you were on call, you were physically on call; you couldn’t leave your home. As a young man, I didn’t really want to be stuck indoors all weekend, waiting for the phone to potentially ring, so I left the company. I went to conquer the world, setting up a business with my brother and doing other things.”

Two decades later, James realised that the funeral services sector was a potential source for acquisitions. Not only was it a recession-proof

industry, but he also had some experience with it.

“The owner of the funeral services I’d worked for kept popping into my mind as I considered what to do next.”

Hence the phone call to his former boss. After their meeting over coffee, things moved rapidly. “That first meeting was in mid-October, and by
the sixth of March, my wife and I had acquired his funeral business. 

Interestingly, the funeral business was established in 1777, which means it is one of the oldest independent funeral businesses in the country. There are not many businesses that are over 244 years old. I was the first one to acquire it with the wrong name above the door, so to speak. It was a real privilege to be able to take that on and be trusted with a community-type business.”

“The due diligence phase took nearly five months,” recalls James.

“Christmas fell right in the middle of that. We were trying to beat the Chancellor’s budget deadline because he was expected to put a cap on the £1 million 10% Entrepreneurs’ Tax Relief.”

At the time, the business had a turnover of about £950,000“The due diligence and handover period went smoothly,” says James, “thanks to the amicable nature of the owner and staff.”

The owner arranged a meeting with the rest of the team before the completion. “That was fantastic because it gave me a great run-up till the day of the takeover.”

The due diligence was also made easier, as James had worked with the company’s bookkeeper, who was also its General Manager, 20 years ago.

James met with all of the four team members individually.

“I asked them three questions. ‘If this was your business, what should we stop doing? What should we start doing? And if money was no objective, what would you want to do?’”

Based on their answers, James produced ‘To Do’ lists for each person. “I typed out the tasks on a simple Excel spreadsheet on OneDrive, so we could share it.

Three months after the acquisition, I thought I’d tot up the things we’d done.” At their next meeting, James enquired with his team on the number of items they thought they had achieved on the To-Do list. “They all gave different numbers. Turns out, we’d actually done over 100 things, including ideas, suggestions, and improvements in a short period.

“The existing team has just been fantastic. I’ve been able to work alongside them, grow and develop them, promote them into different roles, and give them salary increments along the way.

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“We’ve added other people, such that the team has doubled in size at least. “I do help and get involved, but what I say to people is, ‘I own a funeral directors, but I’m not a funeral director’. I haven’t gotten years of knowledge and experience. My long-term game plan is not to become a funeral director, but to own several companies offering funeral services.”

Of course, James and his team had to deal with the effects of the COVID-19 pandemic and subsequent lockdowns. And much like the case with several UK businesses, the impact was massive.

Although the number of deaths in the UK during lockdowns was higher than average, government restrictions meant that funeral services were pared-down in an attempt to prevent attendees from catching and spreading the virus.

“The limousines, flowers, and all other things that go alongside the business weren’t happening at
all,” recalls James, “So, we still had to incur costs, but we didn’t have money coming from that side of things.”

Once the lockdown restrictions were lifted, the company offered its full range of services again.

James also found ways to expand the business, including loaning the company’s limousines to funeral companies based nearby. “Our limousines are lovely vehicles, but when we’re not using them, they’re not earning us any money, and they’re not helping other people. I got a list of all the other independent contractors in our area. I made calls to them and just said, ‘Hi there, we’re offering our limousines should you ever need a second or third one.’ I made sure our rates were competitive.”

His offer went down so well that the owner of another company has approached him to see if James is interested in taking over his business.

This vendor is also reaching his retirement age and has started planning his exit strategy.

“The owner doesn’t want to sell the business to a large corporate.” As far as adding funeral companies to his portfolio is concerned, James has big plans. “My goal is to become the largest independent funeral director in Kent, and then we’ll reach further out. We don’t want businesses that are on each other’s doorsteps, but those that are strategically planned out.”

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