Alicia Barlow – How acquisitions can grow your property portfolio

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Julie Wilkinson  00:03

Hi, I’m Judy Wilkinson, and I’m a chartered management accountant. And I’m excited to be launching the build and exit podcast. This podcast is for business owners and entrepreneurs who are looking to expand their business portfolio by acquisition, or at some point in the future, when to exit their business. We’re going to bring real life stories and experiences of people who have grown by acquisition, who have exited their businesses, and other areas of business such as funding and cash flows. So there’ll be lots of opportunity to learn different areas of business and how you can in the end, transition your business from a lifestyle to an asset to look forward to seeing you soon. Hi, and welcome to the build and exit Podcast. I’m really excited. Our next guest is Alicia Barlow. So I know Alicia. Well, she actually works with Wilkinson’s is one of our freelance CFOs. But personally, Alicia used to work in corporate as an accountant and left in 2016, as launched into property, and actually has a portfolio of 12 properties and has recently in 22, started her business acquisition journey. So it’s going to be a really interesting conversation about leaving corporate world moving into property, and then why she’s decided to sort of also do acquisitions alongside property. So I’ll hand over to you, Alicia, if you want to give a bit of a background about yourself.

 

Alicia Barlow  01:21

So thanks, Julian, thanks for having me. I’m excited to be on the podcast. You’re welcome. I think firstly, to start with, so the journey into finance for me started at a young age because I wanted to understand money, and how it how it worked. So my mum worked in corporate governance at the council. So that was kind of where it all started. I left school, did my qualifications, did my levels, and then thought everybody was off to uni, it was like this dumb thing, everyone goes to uni. And I thought it doesn’t really feel like it’s the right setting for me. But University just wasn’t the right place I wanted to earn and learn. And at the time, I was already building a small portfolio of properties with an ex partner of mine, who was an estate agent. So once that happened, I kind of went through and got a job with a small practice in Manchester, where I was thinking, you know, it’s a small pond, big fish scenario, rather than drowning in a big, top four firm. And, and I learned the very basics of bookkeeping, all the way up through to sort of finance level finance director level and qualified there. We also set up a club for businesses, so ambitious businesses, which was really great, you know, we used to do like a BNI, or like Breakfast Club, sort of a thing with them to help them understand how to work on the business rather than in the business. And at this time, I was only about 19. So I’m kind of taking in all this new information and going well, I’d love to do this for myself. So that’s when I started to do just that. And I had an employee position. So I was self employed, I left the practice and I went self employed for a while and industry worked with many different industries, under the practices as well. And then got offered a job to move into a company that was growing from 3 million turnover to 30 million turnover. And I was their head of finance and then recruited into the FD roll quite quickly grew with that business really enjoyed it had a whale of a time gained tonnes of experience, not just from sort of a finance perspective, but from a business perspective as well, because I was kind of their advisor, and I was learning as they grew. And that scale was an incredible learning curve for me, especially at such a young age, because at this time, I was maybe 2324. So it which is why we still

 

Julie Wilkinson  03:47

your expert, which is why we steal your expertise now.

 

Alicia Barlow  03:52

Because you have that broad sort of exposure to how you put together a set of accounts and how important it is to the operation or the commercials or sales. And how that does a symbiotic relationship within the business with finance, you know, a lot of people think we’re just going to be encounters that sit in the corner. But you know, ultimately we should be champion in working with other departments quite regularly. So that was really what I enjoy doing. And whilst I was there, I have my son. So 2015 actually was born. And within three months of having him I was back to work full time, 60 hours a week, there were floats in the company. And I never really saw him and I thought what was the point of having muscle so I had a bit of a change of heart, a massive lifestyle change a huge sort of like epiphany, and said I need to replace my corporate income with income again, which I had done previously with a portfolio we had when I was when I was younger. So I said to my husband, look, this is what I want to do. Do you want to do it together? Can you support me whilst I move myself from carpet to property? thing, and I did a little bit of both. So I was self employed whilst building the property portfolio. In 2019, I went full time into property, decided that was what I wanted to do. So we’re building the portfolio, it’s all going well, and then COVID happened. And I had a lot of ex clients are people who I worked with previously, people who I was employed by ringing me and saying, we’re going to need some help with our forecasts. So people are going to bounce back loans, people will go for, you know, other funding that the government were giving out. And I said, Yeah, I’m happy to help. So it’s kind of started from there. So I’ve kind of been doing both together. And I was approached by a network, a community of property investors who loved to bet partners in property in mid 2020, and asked to host their Manchester community, which I was more than happy to do really enjoy it. And I still do that now. So we have a great property community up in the Northwest in Manchester. So if any of the listeners are around, feel free to get in touch and come along. It’s a very safe community. And we pride ourselves on not being a sales vehicle for property courses, we are just there to share challenges, share successes, and just keep each other motivated in this very difficult time for property investors and developers as well. So that’s, that was kind of where I met my business partner now. And we’re working together, buying more properties together, building that portfolio. But it got to a point where I was last year saying, Look, you know, in terms of cash flow, there are better opportunities out there. And with my background, why don’t we start to look for asset backed businesses, because there are quite a few businesses out there and staple industries, which are stable, not recession proof, but extremely, you know, well protected from from most recession. So we we pick the industries that we thought would work for us, and we have the same values with and we just went out to market and said, This is what we want to do. This is how we want to do it. And it has to have a freehold property. So we’ve started to build our pipeline, and our acquisitions from there. So we’re open to new opportunities all the time, which is great. Yeah. Sounds good. I hope that helps. Taylor has quite a bit of from one. And a no show is

 

Julie Wilkinson  07:19

good. Everybody likes the story. Because I think, I mean, obviously, there’s quite a new podcast. But we know the whole point of this podcast is to talk about people’s acquisition and sort of investment. And in the end, I suppose exit strategy. So there’s going to be lots of different guests talking about it. So your acquisition that close? So you did one last year, didn’t you? Was it in 22? And it was a bakery?

 

Alicia Barlow  07:42

Was it a baker? So

 

Julie Wilkinson  07:43

talk us through a bit about like, what did you how did you find the journey of the acquisition?

 

Alicia Barlow  07:50

It was quick, it was a six week acquisition. So we were start to finish in six weeks. And this opportunity came across my desk, because they’re the owners, I’d had a sale fall through. And they just wanted to get out. They were ready. I mean, I think they were two days away from completion when the first buyer pulled the plug. And we came in with an offer that we felt was reflective of the current sort of economic climate, and also for the building, which the asset, which is where the business operates from, we managed to secure that at 45% discount from asking which we thought was a pretty good deal. But they equally had what they wanted, and what was most important to them, which was the freedom to remove themselves from the business. So we agreed a three month handover period. And from that point, we’re now I’d say from maybe two weeks ago, completely handed over and the businesses running very well. And we’re moving towards scaling that and getting the marketing up to date and bringing it into the 21st century. So yeah, it’s super exciting. And the food’s delicious. So yeah.

 

Julie Wilkinson  08:57

Oh, yeah. Do you eat a lot of I try not to eat. It was so how did how did you transition that so quick? So in the three months, then, so you’re not working in the business? No, no, no, you’ve managed to sort of buy this sort of, yeah. self generating business. And so how did that happen over work? And how have you managed to achieve it?

 

Alicia Barlow  09:21

Okay, so it was quite simple for us because they already had some good processes and systems in place from an Accounts perspective and sales perspective, especially with the tail within the shop. So there are two elements to this. So it generates income from the retail shop, and it also generates income from wholesale customers, which are restaurants, schools and other businesses. Now for us, we already had a key team in place. And it the one of the challenges for us was to identify if there was any risk of losing any of those key players now, to reduce that I went to meet them all before completion, explained what the plans were for the business asked if they had any concerns after they had any ideas about growth for the business. As. And the great thing for us as buyers was they were screaming out for some leadership. And that’s what we were looking to do. So the Baker’s that were in the bakery, there’s there’s two key bakers, and we employed a third. One of the lads who’s been there since he was 16, we promoted him to a bakery manager to give him more autonomy and accountability for his role and for the bakery, because he knows it better than I do. And we employed a retail manager who now looks after the staff, the rotors and the sharp side of things. So that was how that handover dealt was dealt with. So within sort of the first two weeks, we already had our key team in place. And then it was a case of me visiting once a week just to do the handle for make sure the processes were in place, support them in putting the processes in place and getting them written up. And just effectively going through what I had, which was an action tracker. So I made an action tracker of risk and opportunity and just said, this is the stuff that needs to happen. These are the people that are responsible fall for it, ultimately, but I kind of supported them through that process. And by doing that weekly, we got to a point now where I’ll be visiting once a month, and reviewing the numbers, reviewing the sales, reviewing the accounts, which are all dealt with off site, and then going from there with the team. So really, we’ve just left them to run the run the business as they see fit. Because that’s that’s what they’ve done for the last 1520 years between them. So, you know, we’re all we’d like to import his new ideas, new marketing strategies and increase the sales. Yeah, no, it’s

 

Julie Wilkinson  11:34

interesting, because I know on my acquisition, I did a similar thing, the one I’ve just closed, I went to the staff. And I think if you bring people into the journey, and I had exactly the same conversations, and we’ve made changes literally within the first couple of weeks, and they’re just they seem to be loving it. So they love people love the autonomy and the and so change can be scary, but I don’t think it is if you bring people in in the right position. Yeah, so it’s interesting about because I did that on my acquisition. I think if you bring people on the journey with you, they are happier. Because I know we’ve made quite a lot of quick changes just in me, I only closed mine two weeks ago. And we’ve already made loads of changes and upsell opportunities and things like that. So I think it’s great when you bring the team in, in terms of so you obviously you’ve got in this new staff and promoted Do you feel then that the price you pay fairly represented the additional costs that you had to put in to the business? Is that something you thought about when you when you bought the business?

 

Alicia Barlow  12:28

Yeah, absolutely. And Allah as always, with any acquisition, there are costs that you don’t know about, especially when you’re buying within six weeks. But we felt like the discount really reflected what we could do with the business and what was achievable and what was cost effective to do. Now, obviously, when I would say someone buying a business this year, it’s very difficult for someone coming into a business in 2023, when the costs were 22, and 21, can be affected by COVID. and neat. And that needs to be reflected in the numbers that you do. But equally, you know that just this year alone, I mean, we’ve seen the budget yesterday, there’s going to be a lot of changes for businesses, and that includes corporation tax rates are increasing quite significantly, National Insurance is increasing quite significantly for employers, national minimum wage, also maybe a nine to 10% increase. And these aren’t insignificant figures. So because of what of my background, I was aware of this unable to calculate that in. But I know there’s gonna be probably a lot of business owners out there, or new acquisitions that are happening right now based on numbers from maybe six months ago. Because these things don’t always happen overnight. That was quite an unusual and very quick acquisition. If these acquisitions take anything between 12 to 18 months, that picture can change completely. So it would be my recommendation for anyone to reevaluate the numbers on a quarterly basis. And definitely before completion, at they’ll ascertain whether the business is still valuable, financially viable, but equally for the future as well. So yeah, that was something that we’d already planned planned in. But like saying, there’s no there’s there’s other things in the bakery that have gone wrong, like some bits of equipment have died. And you go, Oh, no, I didn’t expect that. But we did have a decent contingency in place to cover. So yeah, we’re okay.

 

Julie Wilkinson  14:20

And the forecast is definitely we know, because we do a lot of it with all customers of the acquisitions. I mean, we’re probably doing about five every month. And I know that people struggle, they don’t sometimes think they don’t know how to build the right forecasting, if they’re not sort of financial backgrounds, because they see the numbers and don’t always know how to plan the future. And also the risks. So it’s interesting that I love the acquisition process and helping people buy businesses is brilliant. So so you’ve got your properties, you’ve got your bakery. And are you you’ve got more acquisitions in the pipeline.

 

Alicia Barlow  14:57

Yeah, so the pipeline is full with the care homes as well. So, we’re excited to do that. And we’re looking potentially at doing maybe three or four, in the next two years, there’s two incumbents in at the moment that we’re looking to achieve. And then there is another one that we’re looking to view next week, which will fit nicely within the group. Now care is an industry that we’re all quite passionate about, we feel our values lend nicely to. And effectively, it’s just a large home for for the, you know, the, the older generation, it’s very much like property buy to let HMO, which is house of multiple occupancy, you know, rather than professionals are students, we’ve got retired, vulnerable adults in there. So for me, it lent nicely to what we were already doing. We enjoy the fact that there is legislation in place there is a standard body that you need to report to that, for me, gives you comfort, as a business owner, that you are, you have support, but you’re also accountable for what you’re doing. There are a lot of industries out there that are just gung ho and can do whatever the fans say. And that, for me, wasn’t really something we were interested in. So it’s nice to have that barrier to entry, where we can say we’re compliant. And we’ve got the right you know, things in place to tick the tick all the boxes and make it a really great business, especially for the residents at the care home. So yeah, so that’s, that’s really exciting. That’s, that’s on the radar for the next six to 12 months. Yeah. Yeah.

 

Julie Wilkinson  16:29

So so one thing I always ask, especially people in property and acquisitions, and entrepreneurial mindsets, what’s your so you’ve got these properties and these acquisitions? Do you have sort of like a longer term exit strategy in mind and what you want to achieve later down the line?

 

Alicia Barlow  16:49

Yeah, absolutely. It’s, it’s funny, actually, because a lot of people think about retirement as you can put your feet up on a beach, and you just cut yourself off from the world. And for me, that’s not what I’m looking to achieve the exit for me is very much I still want to be involved, I’d love to still be a consultant in some capacity to businesses that I like to work with, because I like to help people. You know, when you own a business, it’s not all black and white, in terms of yes, you can just go and put your feet up on a beach, yes, I do feel that I would still have some involvement in the businesses. And I would like to have that involvement as well, especially from a strategic and sort of a scaling perspective, that that, for me, is what interests me and excites me gets me out of bed in the morning. So it’s difficult to say exit in terms of retirement, because I don’t really think I ever would, I’d always want to be in sort of in the industries in property, helping people especially as part of partners in property, just being within a community where you can just go and it’s just basically going having a chat with your mates. That’s, that’s what it is. So for me, I think I’d always have a you know, a finger in the pie. But I would do and, and I think that’s important for the kids as well, because I don’t, for my kids, it’s more of a legacy thing as well, I want to be able to leave them something that they can take on and enjoy. But I don’t want to have that that entitled mindset for me, they need to be able to come into the business and work in the business and understand the business and if they can’t understand it, then they can’t be a part of it. You know, I don’t want them just coming in buying a brand new Ferrari and then driving off into the sunset and ruining all the hard work that we that we’ve put into it. But for me, it’s more the long term exit strategy is more about building an income which I can live off and I have the freedom to choose as and when I do what I do within the businesses are are anything really so yeah, it’s having that ability to if I want to have six months off, I can have six months off and I can afford to and I’ve got the right teams in place that can allow me to do that. But I know that I’m not the kind of person that probably would end up having six months off I probably have about three weeks and then be bored and want to come back so yeah, it’s difficult to kind of really nail that answer Julie but that’s that’s how it would look for me at the moment that’s that’s what and obviously that all being well and my health being well and you know, my family’s health being well that that that would obviously need to play a big part but yeah, that’s ideally the goal for now.

 

Julie Wilkinson  19:29

And you know, it quite locked down so because we talk a lot about exit strategy will concerns and sometimes when you say the word exit, people think oh my god, that means a full sail. It means I don’t work anymore, but actually, it’s not really what you mean. It’s turning people’s mind that exit can be anything from just saying, I only want to work four days a week, not five days to actually saying you know, I want to fully sell sell the business because even if you know there’s different ways to sell it, even if you did like a management buyout, you could be maybe keep some retain ownership of ownership anyway, still get some disposable income. And I think what sensible about what you’re doing is you’re getting an income stream you could live off. So if unfortunately mother nature did take its cause and you had to do something, that’s probably the bit that some people don’t think about is even if you don’t want to do it, sometimes you might be forced to do it. And if you’re in this sounds like you’ve got a bit of a setup that if that happened, you could probably cope. But actually, you would want to carry on if you can. Yeah, absolutely. So yeah. Oh, and also, you’re not allowed to go anywhere, because you’re too busy with us. So

 

Alicia Barlow  20:35

I don’t like working with you too late. Yeah. So.

 

Julie Wilkinson  20:38

And yeah, we’re talking about asset that business. And we’ll bring up our little our event that we’ve got in our workshop now. First one official workshop. So I think there’s going to be 20 people we’ve got on that now. wasn’t waiting.

 

Alicia Barlow  20:55

We’ve got an all booked up apple in Manchester on Saturday, the 25th. Yeah, yeah. Next Saturday.

 

Julie Wilkinson  21:03

So probably by the time this podcast will be exciting. Yeah, it will be. And by the time this workshop, by the time this podcast launches, I’m sure that workshop that most will probably be over. But it’s interesting to mention it because a lot of people have been interested I’ve know especially with our backgrounds in the acquisitions and exit strategy planning. So they’ll definitely be more to come so. So if people are looking then for, like, you know, what a commonly asked about workshop or whatever, maybe can look to see if they might have a business that they want to sell, like, where can they find you? Oh, okay,

 

Alicia Barlow  21:36

so you can find me on LinkedIn. I will see about follow our Facebook, let’s see rose bolo on Instagram, and it’s property solutions, Bolton, and you’ll be able to find me on there. We’ve also got a website as well, which is Rose, Alexander property.com. And there’s, there’s a link on there where you can contact me through a farm if you want to. So yeah, there’s plenty of places that can get ahold of me.

 

Julie Wilkinson  22:01

So Well, thanks so much for sharing your journey. I think it’s really interesting in you know, obviously, we have men and women on the podcast because interesting to see different people’s journeys, but I think women in business as well, it’s quite it can be quite inspirational for other women who may be thinking about doing this type of journey and taking that plunge to get out there. So thanks so much for sharing your journey with us today. Julian, thanks. So all right, and I’m looking forward to the podcast launching soon. So once again, thank you so much for taking the time to listen to our podcast. I hope you found it useful. If you did, there’s anyone else in your network that might benefit from our podcast and please share it with them even just click the link and send it to them or send it in a Facebook group or other social media channel. Don’t forget to subscribe, so other podcasts that come to you directly as of when we launch them, so I’m really looking forward to seeing you next time. We’ve got some really exciting things coming up. And we’ll see you again soon.