Leanne Dawson – How she obtained funding for over 50 acquisitions in 2022

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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 with Judy will concern. I’m the founder of orcas and accounting solutions, and we specialise in accounting and consultancy, helping businesses with acquisitions and exit strategy planning. So today we have Leanne Dawson, I’m really excited to have her as a guest. Thanks for coming Liang. Liang has almost two decades of experience working in financial services. So one of the things we’re going to be looking at today is brokerage and funding, especially for the acquisition route, and Leanne actually had her own business set up her first business in 2009, which she successfully sold, and now owns a brokerage commercial finance company and helped over 50 people in 2020 to access successful funding. So thanks for coming Leanne’s over to you, if you’d like to tell us a little bit about your background. And yeah, tell us a little bit about yourself.


Leanne Dawson  01:32

Okay, always love these things. Yeah, so I, as Julie said, so I’ve been in finance now for just shorter, 20 years, I don’t know where they’ve actually gone, started off in retail banking. So sort of did you know when you walk into a branch, do you see some of the cashiers. So that was that was my sort of starting point. And then move on quickly into financial advisor. By the time I was 21, I was a qualified financial adviser. So that was really good and interesting. So carried on doing that I did it a little bit in Spain. And basically, sort of recession hits, I think we’ll all remember sort of 2008 and the recession. So let me tell you, it’s not a great time to be a financial advisor, especially when you’re overseas doing it as well at that point. So when I came back, I had sort of a reassess of like a career focus, really, in terms of what I enjoyed and what I didn’t like, and children at that time as well. So I went back to university because I wanted to know more about business, I’d always had like, an understanding an inclination, desire to learn anything about business, and some family owners, family members, or they had their own businesses as well. My dad did. So it was sort of just understanding, the desire to do that. But also, I think any business owner, does that risk level because you no longer paid, I don’t know, salary, there’s no anything else. So there’s, there’s that sort of jumping point of being able to do it. So when I went to God University, and it feels so long ago now. And that’s when I set up the business, Julie, so because I had children at the time, you obviously have a mortgage to pay, I wanted to go study and I was making the decision to do that. But at the same time, I had bills to pay and whatever else. So I went to a franchise exhibition actually, for inspiration, because I had like, I think it was like a year into my degree. And I was fine. I knew everything about business and was ready to run one. Where do you need a little bit more than that? So when tonight to look at gross profit margin, so it’s all about it was more about not desire of what business or what your long term business in terms of what could give me the funding and lifestyle, I needed to fund my degree in something that I could do. So I ended up having a teeth whitening business, which can completely difference what I do now. And I’m not into beauty at all, as well. But I am very meticulous with what I do. And it was a business now, I’d say that I learned more from that than any form of education, or any training I’d done at the bank previously. Because what I didn’t envisage is when you set up a business is you’ve got all the sales and marketing function. You’ve got all the back office, all the literature, everything you’ve got to put in place to make it a success. So with that, and I also I also think there’s a bit of luck as well. So I entered at a time that which was the peak time for that sector, it was really good. So the price point was really high. And there wasn’t as much competition because it was just that that edge before there’s a lot of competition. So I do attribute a lot of it to look as well. And then also a niche. So rather than just having so I can go mobile and do sort of beauty services. I ended up going into stores and I ended up with four stores in the end. And then I also end up with a special agent in Asian weddings as well. So we had a big growth on that. So I carried on that allowed me to pay my bills. Steady. Full Time for my business degree, and basically find my degree. So I left I left my degree with with it paid off, through through through that business that was set up. And then I joined, I still have this inclination that I wanted to draw in and grow from a corporate ladder to rather than like, I thought that was the way of success as well. So I joined RBS, and in commercial banking, and it was sort of a step back. So I’d been a financial advisor before owning my business before and then I started at the bottom run later, because I didn’t know anything about asset based lending. So you have to, and I’m always wanting to that you learn from the bottom and work your way up, which I think you should do. So God, it would be 11 years ago now. So when I was doing that I carried on with running my own business as well. And that lasted probably about 18 months. And then I had people running it for me at that time. Was this busy? Yeah. So we were still running the shops, was doing really well, still doing the weddings. But what I was doing was working in the day, then spending the evenings and over, like early hours working doing that as well. So I got an offer. So again, I didn’t know what I was doing. I got an offer to sort of, to sell it. So we had the negotiations had a look through. And yeah, it was the it was the right time, I also I was following the sector as well, in the regular, the legislation was changing, and there was it was becoming more difficult. There was also the barriers to entry are really low. So the price point had changed. So if I give you an inclination, so when I started doing it, it was for in Japan the session, at the end, people was doing it for 80 pounds. So this was the business you eventually sold. Was this it was the teeth whitening business, the business you sold in 2012. So,


Julie Wilkinson  06:54

so how what method of sale did that go through?


Leanne Dawson  06:59

Well, I didn’t think anything, we just went to this list. So because I got offered to it was someone who works for me. So it’s more like an MBO type of thing. Really, if it had been a much larger business. So they put an offer in. It was it was more than reasonable and to be fair as well. She was also she was running the day to day now. Okay,


Julie Wilkinson  07:20

the manager of the business bought it. Yeah. Okay. Yeah. Brilliant. Yes.


Leanne Dawson  07:25

So that’s this is involved sorted out the SBA. And it was all simple. To be honest, I didn’t think anything of it, which is something a stage of my life that did learn loads from it. And I was at the next stage then of going into asset based lending. Now, I love working with businesses were business owners. That was where I’d say the last 11 years of absolutely, I’ve just enjoyed all of it. I really am. I’m naturally really nosy, which I think helps. So that when you get when you go and speak to someone, I really do love to listen about what they’re doing. So where they’ve come from, where they want to go, and how can we help them? So yeah, the last 11 years worked through different posts, high street banks, independent channel, but I always knew that I wanted to set up a commercial finance brokerage. Brilliant. So that was sort of it. It was it was yeah, it’s getting ready for this. And I’d say that a lot of female business owners, one we struggled to take on debt. And second, we also Yeah, one of the things is imposter syndrome. And you always think you need to know so if someone needs to know an answer, idly, I need to know that I know 120% of that answer to give it to them. So I probably spent too long prepping and getting ready to do it. So I probably could have, I could have set up Mills, commercial finance a couple of years ago, easily, really easily. But there was that thing of leading full time salary. And I went over to a company called newable as well to set up a brokerage for them. That was on an exit basis. I was only ever in there to grow the business and exit. I was never seen him. But what he did was sort of give me the finger of like that stepping


Julie Wilkinson  09:08

stone in your learning. Yeah. So in the brokerage company down and so you did these 50 deals in 2022. So, you know, this station makes a lot of acquisitions and exit strategy planning. So if someone is coming to you as a brokerage company and looking to do an acquisition and wants funding, what is the typical thing that you’re asking them to give you?


Leanne Dawson  09:30

So, basically, I need to know about them as individuals. So obviously, the financial information is one star is one part of it, but I need to know about them. So I need to know about why the acquisition, what’s the background is the background in that sector? If it’s not, why are they acquiring that business? And then there’s also having a look in terms of why why they acquire and is it because the building is just it’s an MBO and basically the opportunities that take over and it’s probably just going to be that that one business, and that’s going to be their lifestyle, or is it sort of looking more like MBTI type strategies or a buy and build strategy. So I have a look at them in to understand them and understand their goals about what they want. So that’s sort of that’s the first stage really, of going through there. Then the second stage is then obviously, the number. So generally, what happens is, they’ll have gone to market and they’ll have they’ll have found a business they like to acquire. So the loss of the lock their advisors while they’re working with them. And at that point, they’ll add the i n, because send over to me as well. So we’ll have a look. And what they’ll do, they’ll produce the IRM, last three year accounts, we’ll have a look at the asset schedule as well, to have a look what’s there. And then the first point, they won’t have the forecast or anything, because this will be a very early stage. So they’ll give me the details. And then they’ll sort of say right from this, what do you think we can raise to then go ahead to heads of terms as we work with them more like a relationship sort of thing? Of how we can help?


Julie Wilkinson  11:06

Brilliant. So what do you find is a common? Do you find that people that are coming to you are prepared? Or do you think a lot of people don’t really understand sort of the funding process in general, what’s your view on him?


Leanne Dawson  11:23

I’m very rarely prepared. Especially especially if it’s if it’s the first acquisition, if it’s the first acquisition, very rarely prepared, once we’ve done two or three of them, and then also built the team around them. Because that’s what’s important as well. Have they got the right CFR advocate, Joe, if it’s their accountant, doing the work for them, as well, advising them Abigal got the right legal team, they won’t have that when they first draw that that first acquisition early stage, they probably just some of it’s opportunistic. Yeah, it’s someone that they’ve worked for. I used to work for years ago when they know the sector, and they’ve come back in and they’ve got this opportunity. So there’s an education piece, because generally, I also need to understand the deal structure. And that’s where it sort of falls down, because a lot of the time early stage, they won’t know it, and with some of them will get involved with this so early that they’ve never done it before. And they don’t even know that deferred consideration is an option. So they believe that, okay, it’s valued at a million pounds. I’ve got to give them a million pounds on day one, they don’t know the options are available to structure the deal.


Julie Wilkinson  12:38

Yeah. But from our conversations closely we spoken to for. I mean, that’s one of the things that you do, isn’t it, I suppose, maybe over and above some other finance brokers is you actually help them with the strategy of the of the funding? So do you help people talk? Do you talk through those sorts of deals, structures and things as part of the financing?


Leanne Dawson  12:59

Yes, yeah. It’s not, it’s not my place to structure them, it’s my place to give them the advice on what, what options are available. And then part of what I do is, it’s like Julie’s it’s relationship building with other professionals where we’ve got our own prep professionalism. I focus on funding, I do not prepare accounts, you know, I do not prepare forecasts or do any modelling. That is Joey’s, outsourced to someone else that is having that right team, what I do is show them what’s available in the market. And the same with like, a lot, the advisors I work with, they’re great at that. But they they can’t possibly know every single lender in the market, because they’re busy looking after the clients. So it’s, I feel really sorry, like for a lot of owners does so much out there, it’s impossible for one person to sort of do all of it. And when you do try and do all of it, that’s where you fall down as well.


Julie Wilkinson  13:51

Yeah. So if you’re gonna give advice to someone looking to do their first acquisition, what do you think would be the key thing they need in place before they tried to get the funding?


Leanne Dawson  14:01

They need to understand that the deal works so that they need to understand and have Maven accounts to have a look at they’re not good at the numbers to understand what that business look like. Because on accounts, it may look like like it’s profitable. It doesn’t mean it’s making money, it cashflow is a very different thing. Yeah, so I’d say sort of focus on that. A lot of the inquires we’re getting in at the moment, Julie are 100% debt raise. And I think that most finance brokers if they watch this, they’ll have had probably 10 applications each week across the desk 100% debt raise for acquisitions. Some deals just don’t work. And if you’ve not got any skin in the game, as they say it, then you can’t expect certain lenders to do it. So if it’s going to be a cash flow loan, then needs to have something in it. The 100% debt raise tends to be on your sort of your ABL asset based lending type of deals that you can do in structure. So if it’s that deal, what they need to have, look at is made sure they’ve got the asset shedule with them as well. So even if the balance sheet up the balance sheet, we can ask more questions to understand what they need. But I’d say just understanding why they’re doing it and make sure they’ve got information and try not to get too good. I’m trying to like, keep it down because a lot get pressured as well to sort of it’s got to happen, even if I don’t get to heads of terms. But you know, in this set time period, the sales not going to happen as other parties. A lot of the time there’s not other parties out there either at the same stage you are, everyone’s doing the due diligence, and that’s the most important part.


Julie Wilkinson  15:38

Yeah, it’s interesting, you say, Isn’t it about the 100%? Loan because it’s like trying to go and get a mortgage or get 100% mortgage? It just wouldn’t happen? What’s your take on? So obviously, we see a lot of acquisition through Wilkinsons. And I think there’s a lot of these courses out there these days advertising, no money down deals, you know, you can do it. And I think a lot of it. Have you ever seen that in the market? I mean, what’s your view on these types of propositions to people?


Leanne Dawson  16:07

Yeah, I’ll try and keep this clean and once swear. The courses, and it’s the new fad, everyone is selling a course honestly, if you have not found one good one yet. And I think we’ll all know there’s a there’s a very prolific person on LinkedIn that actually shows some of these courses and get rich courses and, and shows them for what they are. You have to know your stuff. It’s not that easy. Do you know anyone who’s selling you a dream of our year is fine, you know, go in there, we’ll sort the virus out for you. You can have a business. You’ve got people coming? Well, they’re not homeowner, they’re not from the sector. They don’t, they’ve got no value add. And they wouldn’t know how to run the business. Yet they go on one of these courses, and then all of a sudden, if they feel that they can rule the world, and that’s good. You know, I can use Yeah, sounds really good. But yeah, there’s also realism. I can’t say it a nicer way really without sort of going into swearing. No,


Julie Wilkinson  17:15

I have exactly the same feeling. Because what I find a lot with these people advertising these no money down deals, what I want to know is they’re not with them nine months down the line when they’re struggling with the cash flow, which is the types of things we see after the deal goes live, and they start struggling with the cash so So then just break out? So in terms of different types of financing, and sort of a simple term, if you can, what do you think are the different types of financing for different types of business that you would like potentially recommend or help people with?


Leanne Dawson  17:47

Yeah, so so so my business is a cashflow specialist, that’s easiest way to say it. So I help us to trade in businesses, training businesses with cash flow. So when we look at the products then So that ends up coming in a multitude of products, you may want to invoice finance for your working capital. So that reputation was frowned upon. It works great in growing businesses, because it allows you to grow and you can take on tenders and contracts, knowing that you’ve got the finance in place to maintain them as long as you keep a cap on the headroom. Asset finance. So I’ve seen more of that, since the beginning of this year. So refinance. So what we’re doing is we’re refinancing the assets and putting them over five or six years, putting cash back into the business and then lowering their outgoings. So we’ve seen a lot of that. Bridging and revolving credit facilities, I’ve been very popular. So I think we are revolving credit facilities we were doing about for each month. Now what they are is basically because the banks have pulled the overdrafts which they did years ago. And then you haven’t got many options of funding. So it allows you is basically an overdraft but secure, that’s easiest way of saying it so they’ve got any tangible security. And what we can do is we can we can put like a pot of money that’s there that can be dipped in and out of when they need it. So then it’s not like a loan. So they’re not having to service it each month. So they haven’t got that that figure that they’ve got to find every month. If you’ve got any seasonality. We obviously do a lot of unsecured loans and secured loans. And we’re still one of the brokerages as well that is still doing the recovery loan scheme. Now, most of the ones that I speak to aren’t actually doing many and it’s not been a success. There’s it’s not as easy to write and I always say that I say to my clients, why do you want it? Because there’s there’s only certain benefits of it now. It’s mainly because the interest rates capped at 14.9. Whereas your loans at the moment some of them have increased to exponential rates, and you can get money over six years. So We are doing those, as well. So we did the advice, they’re more advisory because you have to do a full application, analysing the accounts and a business plan to port forward for them. But we’re still doing those as well. Basically anything secured anything puts cash back in.


Julie Wilkinson  20:16

Yeah, no, it’s really good. Yeah, you don’t have a lot of deals, obviously. So 2022 was a good year here. So in terms of your other business, and because I know you’ve got quite a bit in the future, I mean, you’re launching into a few new businesses r&d yourself. So what to give us a bit of a background about, I just love a bit of entrepreneurial spirit, I think it’s good for business owners, just to see how other people are doing things, and you know, what’s enticing to them, and how they’re moving into it. So tell us a little bit about these other ventures you go into?


Leanne Dawson  20:48

Yeah, so I don’t tend to advertise these on LinkedIn, I tend to just keep it to the finance brokerage for this. So but, ya know, so I have my own strategy. So that’s why I think that I can work with people who are looking to acquire businesses, because, you know, it’s, it’s something that we’re looking at getting involved in myself. So yeah, so this, basically trade in businesses, so we’re looking at a portfolio of trading businesses, that will be built over a three to five year, exit for sale. So we’re working on now in terms of the sectors of what we’ll go into. And there’s a number of them that are already trading, so they should be live over the next couple of months. And then what I’ll do is going as a director and shareholder of those, I’ve also got the cleaning business as well, which are parts one sides have been little bit busy. So what that does, it’s hard domestic cleaning, what we’ve not been able to get it scaled, and this is a thing, it’s we’ve got successes, and we’ve got failures. So this is one of them that I’d say it’s been taking a bit of time off. And it’s been moving from domestic to commercial, and that it’s been a struggle. And it shouldn’t be because there’s loads of commercial work. But the problem is, is staffing, I can’t get, I can’t get the number of staff and I need to make sure I don’t let down the contracts. And I can’t make sure they’re gonna turn up. You can try recruitment advisors. So we’re looking at different things. So there’s that as well, which hopefully, will push that should scale over the next 18 months. But the heartache focus. And the final one is again, going back into beauty as well. So into clinics, so invest in like Botox clinics as well on the training side. So yes, I have, I have a few things that I’m involved in. And it’s always it’s taken the right opportunities. Julie, it’s always it’s always the same watch, right? A lot of the time we’ve been going in with someone, if it’s something more long term strategy, I’ve learned as a consultant first to understand the business and see what value I can add. If I can’t add any value, there’s no point in me being in there. Yeah. So but again, on those, it’s the right team, I got the trading businesses, I’ll oversee them, I won’t be in running them day to day, you have to have the right leadership team in situ, to run them, otherwise they don’t work. So if you haven’t got that, and you haven’t got time to be in there all the time, which obviously, you don’t have, you can quite easily get it wrong. So it’s making sure that you’ve you’re always assessing the levels of risk on each and each opportunity. Oh, my


Julie Wilkinson  23:20

God, you have literally just reset my LinkedIn posts today. I’ll bet you’d be stalking me today. I would love to have to go and I were looking at you religiously those words are just like replicated what I put on LinkedIn today, that is just hilarious. So you’re obviously well read up a few different companies and doing your own thing. I mean, so I think for women in business specifically, especially in the acquisition, I mean, I know I’m in the acquisition industry, and I would probably say 98%. Well, 95%, I’d say now of people we work with is probably still men. So I think is interesting. And that’s why I like having female guests as well. I think it’s really inspirational, especially for women. But I suppose you’re doing all these things. What is your own personal angle? Do you how are you happy to share? Have You Got someone in mind?


Leanne Dawson  24:04

Yeah, I’ve got loads of kids just feed them now kidding. No, the end goal, the end goal is is basically to be financially capable. So the children are getting older, which I’m getting older. So yeah, so each one of them has a different end goal. So the commercial finance brokerage is ideal. So we’ll grow it and we’ll grow it to a point where it would be sellable. If it’s five years, but we won’t sell, it’s not there to sell, it’s there to continue and to carry on growing. The investment side on the businesses, they’re all exit every one of them, some of them will group on a larger exit. So then we’ll try and get it to a certain multiple of EBIT da now. Some of the other ones, they’re more like, just getting involved have a lifestyle where I might end up as a non exec or ultimately, yeah, the key is to work I’m incredibly, very hard over the next five years, and then be able to then wind it back in. So the businesses will run will have having to a certain point, but then they won’t need me in them as much. So then I can spend some time travelling. I don’t know, I don’t know yet, because it’s still it’s still there. But I’ll have more free time. Probably the only free time since I was about 20 years old. So it’s all here now just to be financially cute.


Julie Wilkinson  25:30

Yeah, no. Sounds like Ryan. So it’s, you know, and these opportunities, then I’d be interested in like, how did they come about? Do you actively go out and seek them? Or have people asked you?


Leanne Dawson  25:43

I’ve, I’ve not gone out and source any of them. And you have already? Yeah, free reputation. So usually, they might have been advised to speak to me from their accountant or the business consultant. Or it may be a lot of it tends to be where I’ve worked with business previously. So then they’ll talk to someone else. And then, yeah, it snowballs from there. But I’ve not. Yeah, that’s what I mean, a lot of it is hard work has gone in over a long time to get to jump to the knowledge. I do know a little bit. I’m quite dizzy sometimes. But do know a little bit. So there’s that. But then it’s look, it’s look as well, I think so it’s, it’s Yeah, I do feel like I’ve been I’ve worked really hard. And so whether some people say that creates luck as well. But I do think, you know, I have been lucky as well to, to bump into the right people meet the right people going out and stuff like that to then build a reputation.


Julie Wilkinson  26:44

Yeah, well, you know, selling a business work in brokerage, and now we’re doing all these investments, you’ve definitely going to be a go to person. So I’m glad that I’ve sold you on the podcast first, to be honest. So my new channel so well, thanks so much for coming on. So what is next for you then over the next sort of 12 months? What’s your focus?


Leanne Dawson  27:08

The focus is to basically the finance brokerage needs to be the main focus. So investments, they’ll be sorted to the next couple of months, there’ll be done, the focus is streamlining. So my processes still aren’t where they need to be. And bring it up. I’ve got people that work for me, I’ve got some more people that like to hire in June, but I can’t hire them until my it’s not all in here, as my coach says, and it’s written down in processes and structure to allow that. So that’s my focus for this year is to make it feel more like a business on the finance brokerage. Rather than most people who know me or just usually like, It’s me just running around. So, so it’s structure. And that’s my number one. The we’re very lucky the inquiries come in. We’re very lucky our introduces levels. So we don’t have to worry about work, if that makes sense. Our concern is handling them at the best quality we can and not letting people down. So that’s where we need some of our Yeah, our CRM system sorting and some of our documentation, sorting out so it’s an easier process. So the revenue will come in anyway. It’s now really time to focus on the back of the underneath of that, that yeah, building up the business before it all comes tumbling down.


Julie Wilkinson  28:28

Yeah, yeah, I’ve been there too. That’s what we’re focused on in our business at the minute now we’ve just closed our acquisition last week, you will be getting all the systems and everything set up. So So if people need to contact you then about brokerage or you know, talking about acquisition in general, where can they find you? What’s the best place for them to find you.


Leanne Dawson  28:49

So the easiest place to find me is on LinkedIn, Lian Dawson, you’ll find the form of extremely long LinkedIn posts, as I keep pinging told. And my email address is Leon at Mel’s commercial finance dot code at UK.


Julie Wilkinson  29:05

Brilliant. Well, thanks so much for joining us, Leanne. And then you Well, I am looking forward to the viewer seeing our second build an excellent podcast as we’re just launching over the next couple of weeks. So thanks so much. And yeah, we’ve got lots coming up on our channel soon. So subscribers keep subscribing to see more of this type of podcasts. 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, either 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 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.