Teddy Velkov

As business owner, Teddy Velkov, reveals, spotting opportunities that others overlook can help a dealmaker achieve rapid growth in any industry.

Immigrant Dealmaker Makes It Big In The UK

Arriving in the UK without any knowledge of English and no business contacts, Bulgarian-born Teddy Velkov might have easily floundered.

But he possessed something that many other business people do not: the ability to spot opportunities. Despite being in his early 20s, he already had experience running businesses.

“Mine is a typical immigrant story,” says Teddy, “I didn’t have any connections. I couldn’t even speak English. I jumped into the deep water straight away.”

He identified a gap in the market and moved in.

“I saw a huge opportunity in the window cleaning industry, especially the domestic,” he recalls. “It was largely an unsophisticated sector, especially domestic window cleaning. There were quite a lot of small ‘mom and pop’ businesses. It was a very fragmented industry.”

Within 18 months of arriving in the UK, Teddy had started his own window cleaning business. To begin with, he went door-to-door to find customers. “I was running it like a lifestyle business up until 2016. Then, I was invited into the M & A field.”

From that point on, Teddy began to acquire other window cleaning companies. “I’ve bought three limited companies since then, as well as a lot of small, self-employed, owner-operator businesses.”

Having discovered the possibilities that mergers and acquisitions have to offer, Teddy began to use his networking skills to scope out target companies.

“I was going to lots of events. In the cleaning industry, I met several people, and told them all that I wanted to buy businesses. Everybody was
like, ‘Oh, this is Teddy. He is buying businesses.’ So it wasn’t ‘Teddy who owns a cleaning business’ but ‘Teddy who is buying businesses in the
cleaning sector’.”
Word spread among business owners rather quickly.

“One day, I got a call from a lady saying that she’s heard that I buy businesses. She was selling a commercial cleaning contract.”

During their conversation, Teddy asked the owner how much she wanted for the contract. “She replied, ‘I don’t want anything. I just want someone with a reputable, established company to take it over.’”

The owner wanted to move into the beauty industry, and was fed up with the cleaning contract. It was taking too much time, effort, and
energy.

“I said to her, ‘If that’s the case, how about we take over the contract, and pay you a few instalments?’ “The owner responded, ‘No, I don’t want any money. I just want you to take it literally off my shoulders.’”

Teddy bought her company’s assets, which included the cleaning contract. “That’s how I started to do door to facility management, as this particular business owned a contract for the complete maintenance of a 12-storey block of flats.”

Soon after taking over the contract, Teddy discovered that the building’s landlords owned other premises, including offices and a warehouse space. Sensing an opportunity, Teddy approached them with an offer.

“I met the owners, and I said, ‘Guys, at the moment, we maintain this residential block of flats for you. Our cleaning company could organise cleaning in your other businesses as well.’”

His timing was perfect. The owners responded by saying that they were unhappy with their current cleaning contractor, and offered the work to him. Before long, Teddy had taken over the cleaning and maintenance of all their properties, and added £250,000 to his turnover.

It meant that in just five months, he had tripled the value of the cleaning contract he’d taken over and doubled his business turnover. “That was my first acquisition.”

The deal may have been small, but for Teddy, it was life changing. Until then, he’d assumed that he would need external funding to expand or acquire other businesses.

“I was ecstatic. I had doubled my business in just a few months. And the speed with which it happened was amazing.”

Naturally, he began to look for other opportunities, particularly those in South London. At the time, Teddy’s cleaning contracts were all based in West London. His company was managing between 50 and 150 properties in each area of West London.

“I wanted to enter South London, but it was tough to start a business from scratch over there. I had salespeople going door-to-door to find
customers, but building a new round in a new area would take ages.

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“I approached one of my main competitors in South London. The business had three partners, and they were interested in selling, but they were asking far too much. I explained why I felt they were asking far too much, and they agreed, but still said that it was what they wanted.”

So Teddy and the partners agreed to leave things as they were. But things changed. With the outbreak of the COVID-19 pandemic, Teddy heard back from one of the partners. “He said, ‘Do you still want the business? My partners aren’t at all interested in the business, and I have a quite serious health issue.’”

Warily, Teddy asked how much the partners wanted. “He said, ‘Because my other partners aren’t interested, and I’m quite ill, you can take the business, and can pay me whatever you decide.’”

“I literally took over the business for free. In the next month, I carried out due diligence.” He discovered that the business had 250 clients in South London, based in places like Clapham and Battersea.

After due diligence, Teddy agreed to buy the business with an initial payment and deferred payments spread over four months. He used the
new company to pay both the initial and deferred fees.

“It helped that the sellers were highly motivated to sell,” he says. “They said, ‘If you don’t get the business now, we won’t run it. We’ll lose it.’ They
didn’t have time to look for other buyers.”

Teddy’s experience and knowledge of the cleaning industry helped him progress the deal quickly. It also gave him an edge over other would-be purchasers. He could see the potential of what he was buying.

He knew that he could offer the company’s existing clients additional services to increase their customer value.

I know how to increase revenue quickly. I include different services, which increases my customer value. Let’s say the average customer value starts at £20. We increase that to £100 or £150, as we offer them other services. We are talking about returning customers here.”

At the moment, he has over 2,300 regular customers, and offers them five or six different services. “I know how to increase the revenue fairly
quickly. I would say that with each of the businesses I’ve bought, I’ve doubled or tripled the revenue within a few months,” he says.

The early goal to exit the business after three to five years has changed.

“When I started, I set a goal that in three to five years, the business would become the largest window cleaning company in London, and I’ve
achieved that. I also planned to exit the business at some point in these three to five years.

“Funnily enough, just before the pandemic, I thought, ‘Okay, I’ve achieved my goal, and now is the time to exit.’ I was looking for ways to exit
the business. And that was when I came across Jonathon on LinkedIn and YouTube.”

What he discovered made him rethink his plans.

“I thought, ‘Right now is not a great time to sell because of the pandemic, even though it’s been one of our best years.’”

Instead, he decided to look for more businesses to acquire. He widened his search from cleaning service companies to include businesses that
offered other services such as facility management. This was to ensure that he could boost the value of his company through acquisitions and expansions while still being on the lookout for prospective buyers.

Before the pandemic, he obtained government funding to grow the business, some of which he reserved for acquisitions. “It means that I can act very quickly, and move on with good deals.”

Speed, after all, is attractive to owners who want to sell their businesses, particularly those who are highly motivated. Such sellers will often accept a lot less for their companies if it means a faster exit.

“We just did a deal in Kent for an enormous cleaning company. The sellers said that they wanted to move really quickly. They’d had three
potential buyers who lost out on the deal, as they couldn’t raise the funds in time. We were able to do the deal because we could move fairly
quickly.”

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