I recently had the opportunity to interview Jeremy Harbour, a global leader in the field of small business Mergers and Acquisitions. He is the founder of Harbour Club USA, which helps entrepreneurs buy and sell businesses.
What brought you to this specific career path? What happened, exactly?
“Igot involved in business from a very young age and had varying levels of success and failure. Then about twenty-five years ago I started a telecommunications company, which attracted a few buyers. During the sale of that first company, I realized I was the same as the buyer in that they didn’t actually have any money and neither did I. If we were the same, I might as well become the buyer instead of the seller.
I went ahead and bought a company with no cash upfront, and nearly overnight it grew by a year’s worth of sales. It was a massive success, and it lead me to buy a number of other companies. Within eighteen months, I had acquired a group of twelve different companies.
I decided to pivot away from being an owner-operator and into buying and selling companies. I’ve since bought and sold over one hundred companies. It’s been quite an adventure in the Merger and Acquisition world.”
Can you share a story in which you needed to rely on grit to succeed? Tell us a story about a time when things were hard when you first started out on your entrepreneurial journey.
“The important thing to remember is that things are hard all the time, and not just at the start of your journey. If you’re not having hard times, you’re probably not pushing yourself hard enough. You should always be aiming for something that is just beyond your reach because it helps you learn and grow.
In the early days of business, the consequences of failing after pushing myself toward something just out of my reach were a bit different then now. Back then a business failure meant not being able to fill up the car with petrol or eating cheap noodles for dinner every night.
Now the consequences don’t lead to quite as significant lifestyle changes, but the failures never go away. There will always be certain parts of the journey as an entrepreneur where you have to put your head down and push through, but that is half the fun of entrepreneurship.”
Where did you find the courage to keep going, especially when things were hardest?
“I’ve had a few businesses go bankrupt, and one was very early on. I was eighteen years old. Having a business fail teaches you humility, which is very important for an entrepreneur because we can sometimes get a little too full of self-importance.
When a venture does fail, though, it’s nice to realize that running a business is like walking a tight rope that is only six inches off the ground. Sometimes it feels like your tightrope is a thousand feet in the air, and if you fall it is going to be a huge disaster.
But the reality is, nothing really changes that much. Your business venture might fail, but you still wake up in the morning and everything is going to be okay. This is a really valuable lesson because you know when you fall off the tightrope, you can get up again and try even harder.
Business is about recalibrating your appetite for risk. I was once speaking with a group of retiring members of the armed forces about entrepreneurship.
Someone spoke up and said, ‘It all sounds a bit risky for me.’
My response was, ‘You spent your entire career being shot at and you think what I do is risky?’
In business, it’s perception of risk, more than actual risk, that really scares people. Once you identify the actual risks, work to cover those risks before even thinking about any gains you might make. That’s how you handle risk and have the courage to keep going.”
How are things going today? How did your grit lead you to eventual success?
“Things are going fantastically at the moment. We’re growing our business tremendously, and we’re taking our ideas public. I wouldn’t necessarily classify it as success. It’s just the part of the journey I’m on now. We’re always working, and we’re always learning.
Each time you learn a lesson through success or failure, you have to take that lesson and adapt. Apply your new knowledge, and you’ll make the most out of each new experience.”
Can you share a story about the funniest mistake you made when you were first starting out with things? What kind of lesson did you learn from this experience?
“When I was only fourteen I saw an advertisement for a gambling machine for sale for £150 pounds, which seemed like a great deal to me. So I went to a local pub and asked the owner how much he paid for his gambling machine. He was paying a weekly fee of £15. I said I had a machine for sale for £300 and explained how it was a really great deal. He seemed excited and agreed it would be well worth it to buy the machine.
So I persuaded my dad to drive me two hours to London to pick up this machine. £150 was all the money I had in the world, but I managed to come up with it. I bought the machine and took it to the pub owner, but the guy said he couldn’t take it. He had a contract with his existing supplier.
I realized when I first asked the guy about buying the machine he was just humoring me, a fourteen-year-old kid. He never expected me to actually show up with this gambling machine.
So then I had this machine, and it was the genesis of a new business idea. I searched for other local pubs and found seven of them who wanted to order a machine from me. Well, I only had the one machine, but I told them all I could get them one.
I found a supplier who could get me six more machines, but I had to negotiate back and forth for a few days to get the best deal. When I walked in the door of the supplier to pick up the machines, he couldn’t believe I was just a kid.
He was impressed at my ambition. He also explained what I was doing was illegal because I didn’t have a license for it. Luckily, he did have a license, and he took me under his wing. We went into business together buying and selling gambling machines.
So at the age of fourteen, I learned get orders in writing and investigate the legality of the business you’re embarking on before you begin.”
What do you think makes your company stand out? Could you share a story about that?
“We have a unique proposition in how we use agglomeration to propel businesses forward. We enable small businesses to access capital markets, which gives the small business owners more options than they’ve ever had.
We deal with a massive untapped part of the market. Fifty percent of all businesses are small to medium sized, but it is a very unloved sector. Often they can’t get venture capital or private equity money because they’re too small.
It keeps a lot of people with amazing potential from achieving great things. Seriously smart people with tremendous talent run most of these businesses, but the infrastructure for support is just not there. Agglomeration is the solution to that problem.”
Which tips would you recommend to colleagues in your industry to help them not only see similar levels of success, but avoid “burnout,” as well?
“We need more of the entrepreneur spirit. Entrepreneurs have a completely different way of looking at value creation as well as a different time horizon than the traditional corporate finance community. We need to attract more entrepreneurs to get into what was traditionally the role of corporate finance and investment banking.
We need to get more of that entrepreneur spirit in the finance space because the short-term greed of the traditional banking model does not fit well with long-term value creation. Unfortunately, the industry at the moment is too focused on short-term goals, which doesn’t really help anybody. The entrepreneur spirit has longer-term perspective.
Long-term goals let entrepreneurs get through burnout. People who are too focused on fast progress and quick gains are more likely to burn out because you don’t always see results immediately. The entrepreneur spirit is about looking beyond the immediate situation.”
None of us are able to achieve success without some kind of help along the way. Is there a specific person who helped you get to where you’re at today — somebody for whom you’re extremely grateful?
“My parents are the ones who really showed me the options I have. Growing up a lot of people have this idea that you either work in public service or you get a job.
My parents were always self-employed. They modeled this third option for me, which was that you can wake up every day and do whatever the hell you want. Seeing my parents live that life was the biggest inspiration for me.”
How have you used your success to bring goodness to the world?
“There are so many problems in the world that need to be fixed, but you can’t take the whole weight of the world on your own shoulders. My goal is to empower creative entrepreneurs to solve those problems. Entrepreneurs are ‘change agents’ in society.
When an entrepreneur achieves first generation wealth, they often use that wealth to solve some of the problems that affected them before they were wealthy. When creative people have real cash, they are able to get to the bottom of some serious issues.
I enable entrepreneurs to achieve change in two ways. The first is teaching them to grow their businesses quickly through mergers and acquisitions. The second is helping small and medium sized companies go public through agglomeration. Both of these things can have a huge impact on global inequality.”
What are five things you wish someone had told you before you started doing what you do today? The more detailed you can be, the more our leaders can learn from you.
“The first bit of information I wish I’d known from the start is that you don’t make money running a business; you make money when you sell. Don’t wait until you’re done with everything else to sell a business. These transactions can go wrong, so the sooner you can learn how to manage them, the better.
Second, never deal with morons. It’s basic life advice. If you meet someone and get a feeling that this person has no respect for anything, don’t ignore that feeling. Don’t give in to the temptation to make some money off of them because it will never work out. Your first impression is usually correct.
The next bit of advice is to not surround yourself with advisors. It’s very common in this industry to have an advisory team around you. In fact, a lot of people have recommended doing just that, but in my experience, it is a bad idea.
It’s best to trust your instincts. Go meet business owners one-on-one; you don’t need a whole team. Advisory teams often end up being the anchor to the boat you are trying to sail. They only slow you down.
Another important thing to know early on, is that personal wealth comes after smart investing, not before. Too many people make a bit of money and want to buy a nice car, a boat, or a summerhouse, but the secret to wealth is to spend your first dollars investing in things that create income. Once your cash is generating wealth for you, then you can buy the fun stuff.
The final thing to remember is that things take time. Entrepreneurs are naturally impatient, but you can achieve bigger goals with a long-term perspective. So many people only think about the short-term, but if you are patient, you end up taking money from the impatient people.”
Undoubtedly, you are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be?
“I believe I’ve already started a movement with democratizing wealth through helping business owners achieve great success. Global inequality creates all sorts of serious problems. The majority of money never finds its way into the hands of ordinary people.
Through helping business owners, we are unlocking that capital and creating ways for ordinary people to gain access to wealth. If we could completely democratize wealth, it would lead to a huge improvement in quality of life world wide, as well as an increase in philanthropic activity.”
Lastly, how can our readers best connect with you?