Make Your First Million: Ditch the 9-5 and Start the Business of Your Dreams

195 Pages·2007·0.61 MB·English

by  Martin Webb

MAKE YOUR FIRST
MILLION
MARTIN WEBB

MAKE YOUR FIRST
MILLION
MARTIN WEBB
Copyright © Martin Webb 2007
First published 2007
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ISBN 978-1-84112-761-3
Library of Congress Cataloging-in-Publication Data
Webb, Martin.
Make your fi rst million / by Martin Webb.
p. cm.
“First published in 2007 by Capstone Publishing Ltd. (a Wiley Company) ... Chichester, West
Sussex, England”--T.p. verso.
Includes bibliographical references and index.
ISBN 978-1-84112-761-3 (pbk. : alk. paper)
1. New business enterprises--Planning. 2. Entrepreneurship. 3. Profi t. I. Title.
HD62.5.W42 2007
332.024’01--dc22
2007001276
Anniversary Logo Design: Richard J. Pacifi co
Set in Chianti by Sparks, Oxford – www.sparks.co.uk
Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall
This book is printed on acid-free paper responsibly manufactured from sustainable forestry
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CONTENTS
Prologue: The false start iv
PART 1
1 Introduction 1
2 Starting again 25
3 Putting the idea into practice 41
4 The opening days 59
5 Building on success 77
6 Branching out and preparing to exit 99
7 And in conclusion 121
PART 2
Appendix: The Entrepreneur’s Toolkit 127
Item 1 The general business model and working capital 130
Item 2 Risk assessment 132
Item 3 Getting the start-up money 137
Item 4 Drawing up the fi rst rough fi nancial plan 144
Item 5 The decision to lease premises or buy them 151
Item 6 Drawing up a detailed business plan 156
Item 7 The formal documentation of staff appraisal 172
Index 174
iii
P R O L O G U E
THE FALSE START
Between the years 1993 and 2001, Simon Kirby and I started a busi-
ness that ran mainly, but not wholly, pubs and clubs. We built up a
series of 30 pubs – some of them branded – and sold them in 2001
for a sum of money that we could only have dreamt about in 1992.
This book is about how we did it – including the bits we got right and
the bits we got wrong. By reading our story you can learn from our
lack of business nous and avoid some of the pain and heartache that
we experienced on the road to entrepreneurial success. The fact that
we survived the many ups and downs is a testament to our achieve-
ment and gives you the opportunity to learn from the fruits of our
labour – from our triumphs and our setbacks.
It all started with a fairly spectacular failure, a massive blow to our
self-esteem as well as our wallets. But we sat down and worked out
what we had done so catastrophically badly and this prologue passes
on some of what we learned. It also passes on the change in attitude
that the failure brought about – it’s not an exaggeration to say that
it scarred us for life and strengthened our resolve never to make the
same mistakes again.
In 1990 I was twenty-six. I liked bars and loved music and I thought
I would like to own a bar of my own. That seemed the obvious way to
create exactly the kind of place I enjoyed going into.
What experience did I bring to bear on the venture? Very little
really. I had earned some pin money as a DJ in nightclubs, but apart
v
MARTIN WEBB • MAKE YOUR FIRST MILLION
from that I had the theoretical knowledge you get from doing a busi-
ness degree and less than a year’s experience as a trainee with the
multinational computer company IBM.
I had no experience of running a business, but plenty of experi-
ence of drinking and partying. This meant that I had one big asset – I
knew the kind of people I wanted the bar to appeal to and I knew
what they liked. Simon and I also had enthusiasm, energy and the
confi dence of youth – vital if you’re going to get the world to come
along with you and choose your bar to drink in rather than someone
else’s. Did we have the talents of the entrepreneur at that time? I’m
not sure, to be honest, and it’s a very interesting question that I’ll
come back to at various stages in the book.
We raised the cash to get started from a combination of savings,
bank loans and maxing out our credit cards. This gave us the £60,000
we needed to buy the lease of an existing bar – the Helsinki – fi t it out
the way we wanted it to look, buy stock and get into business.
Neither of us had ever refurbished a property in any way so we
did what most people would do in the circumstances and hired a
building company as the experts to strip out the old and put in the
new. We agreed a specifi cation with them and a price for a complete
refi t. They took responsibility for everything; after all, we thought,
they must have done this kind of job many, many times. This was, to
say the least of it, naïve. More than that, it defi ed common sense as
well as good business practice.
Think of it this way. If you undertake a building project you need
expertise, skilled tradespeople and decent materials. Now, the fi rst
time you undertake such a project you may well need to buy in some
expertise and employ some skilled tradespeople. But do you need to
pay people to strip the old paper off the walls? And what about the
materials – is there something smart you can do in that department?
After all, if you put the whole project out to a third party, they buy
vi
MAKE YOUR FIRST MILLION (cid:129) THE FALSE START
in materials at a discount and sell them on to you, at least at the full
retail price and possibly a bit more. Then they add in another amount
for contingencies – the things that they cannot predict as they plan
the project – and they’ll like as not still charge you that sum even if
there are no extra costs. In fact, contractors rarely use the contingency
money because when they encounter the unexpected they pass on
the extra costs up front – to you! Now, our contract even included all
the furnishings – right down to the tables and the chairs. We got the
project done, but we paid through the nose for it and spent much
more money that we needed to.
SUGGESTION BOX
Incidentally, if you buy the materials yourself you can probably get a discount
too. Try it – ring up your local builders’ merchant and tell them you’re about
to do up your house and that you’ll need about £30,000 worth of materials.
They’ll almost certainly offer you a discount. They may not offer you credit
terms, because they only do that when they are sure that they will be paid
more or less on time; but it’s worth going for that too, you never know. In any
case it’s a good exercise for fi nding out if you’ve got the boldness to speak to
anyone who can help you learn what to do to get your business going.
So, our expensive refi t completed, we opened the doors with a
triumphant fl ourish and the party animals of Brighton came fl ood-
ing in. Within a few weeks we had a packed venue and the cash
was rolling into the tills. To say we were cavalier in our approach to
spending money is an understatement – we made the Beckhams look
like penny-pinchers. Everything was top quality and no expense was
spared. There were lots of customers; so we needed plenty of expen-
sive doormen. People didn’t want to wait a moment for a drink – well
I didn’t at least – so we had loads of staff. We had the top DJs, regular
parties both for the customers and also for the staff after work. Best of
all, while we knew what all this was costing, we didn’t know whether
vii