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- Before we get into the...
How many of you come up with some good questions?
How many have come up some bad questions?
(audience laughter)
Sometimes the bad questions
that the breakthrough happens.
You see in business,
I think a few of the most dangerous words
you can say in business is this, write this down,
My business is different.
I hear from entrepreneurs all the time.
Oh, yeah I'm in this business
and my business is different
and this whatever, this it doesn't work for me.
Do this for me.
Go ahead.
Yeah, do it like that.
Most entrepreneurs, they have what I call the tunnel vision.
This is how they view the business.
Okay, take it off.
So my goal today is hopefully to take that off
and you can see wow,
I can look at my business from a different perspective.
Because most entrepreneurs operate,
and the business owners,
most people in the same industry,
they operate the same way.
Okay, they look at what everybody else is doing
and they copycat each other.
And they think, wow if that guy is doing it,
it must worked.
Just because other people are doing it
doesn't mean it works.
It's the blind leading the blind.
So if you want to think outside of the box
I should listening some of these questions
when we're doing the hot seat that...
well yeah, ya know that guy's in the internet business,
I'm a mortgage broker,
that doesn't apply to me.
No, no, no, no, no.
What I wanna do is,
I wanna train you how to think
because business is an intellectual sport.
Business is intellectual sport.
So if you think of in terms of
how you think about your business,
how you execute,
that's what produces results.
Intel is very valuable.
And business is war.
Business is war.
Doesn't mean the guys who work the hardest
will make the most amount of money.
That's not always the case.
But the ones with the intelligence,
with the intel, and can think outside of the box,
yep, those people, those entrepreneurs win.
Does that make sense?
So, let's start with off some questions.
Now I do believe there is such a thing as a stupid question.
I do believe that.
But I think you come up with some good ones.
So, yeah ask me anything you want.
I'm all yours.
And just put up your hand so we'll start with the mic.
The mic is not for the speaker, just for the camera.
So it doesn't help.
Just project. - Hello.
- And what's your name?
- [Male Audience Member] It's Toby.
- Toby?
- [Male Audience Member] Yes.
- Everybody say, hi Toby.
- [Audience] Hi Toby.
- Go ahead, ask your question.
- With the problem for rising cost, of inflation,
how do you combat that when you're starting a business?
Especially when it comes to real estate,
salary, employee salary, because it's rising, right?
- Yes. So you're saying with the inflation,
what business are you in Toby?
- I'm thinking of a food business--
- A food business?
- [Toby] A restaurant.
- A restaurant?
- [Toby] Because our family back home in the Philippines,
we own a couple of chains.
- Okay.
- [Toby] I'm making a business plan right now.
- And you're thinking of doing it in Vancouver?
- [Toby] Yes.
- Okay, So you're thinking of opening
a restaurant in Vancouver.
If you don't mind me asking,
what type of restaurant?
- [Toby] It's a Filipino restaurant.
- A Filipino restaurant, okay.
Because of the labor,'
also the cost of everything else,
the food, material, the people.
So what's your concern?
what's your problem?
- [Toby] When I was trying to do a break-even analysis,
it's just that I need to sell
a whole lot more just to break even.
- Okay.
- [Toby] Because of the real estate cost--
- The lease.
- [Toby] Salary, labor and everything.
- So the question is?
- [Toby] How do you combat that or
how do you go around that?
If you have any--
- Okay, I get it.
- [Toby] Advice?
Which is, first of all,
I want to acknowledge you for doing the
break-even analysis because a lot of
entrepreneurs, they just jump into it.
They just open up something without
running through the numbers.
How many have done that, by the way?
Be honest.
Yeah. Andre has done that.
So, which is good.
The challenge is,
once you run through the numbers,
like you said,
you're gotta to have sell a whole lot of food,
to even just to break even.
- [Toby] Yes.
- Then honestly, don't fucking start the business.
Do something else.
- [Toby] Uh huh.
- Like just because maybe you have the
background in a restaurant,
Vancouver is a different market.
And Vancouver, the restaurant industry
is extremely competitive.
Just go to Richmond and walk around.
- [Toby] Mm hmm.
- It's extremely competitive.
There's a whole different market,
you have a huge population,
that's an Asian population as well, right?
If you're selling Filipino food,
you're probably a target to the Filipino community,
I assume, right?
- [Toby] Actually to the Asian community--
- Asian community, anybody right?
- [Toby] And hopefully to the Spanish.
- So in terms of the numbers,
you gotta invest how much money?
What was your number?
Just open up something like that.
- [Toby] Initially, cause I talked to an investor,
she's willing to put down 150.
- Okay.
- [Toby] All in all, it's going to be around 300.
- Three hundred right?
- The kitchen, Just so you know,
the kitchen itself will probably cost
two three hundred grand.
- [Toby] Actually, can you say that again?
- The kitchen itself,
because our friends opened up restaurant.
The kitchen itself is two three hundred grand.
- [Toby] Yes.
- So you put in the money and then now
you gotta think in terms of...
and if everything goes well,
how long would it take you for to recoup that investment?
- [Toby] Five years.
- Five years?
That's everything goes well.
- [Toby] Yeah.
- So there you go.
So think about it, if something not goes well,
how much money could you lose?
- [Toby] Quite a lot.
- Yeah.
So if you think in terms of,
why are we in business, by the way?
- [Toby And Audience] To make money.
- So if you know that okay it's a game,
it's like gambling.
It's a game that you bet,
okay I'm gonns put in $250,000,
I think that's how much this is gonna cost.
But chances, it's gonna probably cost
three four hundred thousand dollars.
Just to be in the game.
Forget marketing, forget anything,
running cost, anything like that.
I am in red, four hundred grand before open door.
So if everything goes well,
in five years, I might recoup my money.
And if everything goes well,
maybe in six, seven, 10 years,
I'm making a little bit of profit.
So, if you think in terms from a entrepreneurial,
I'm not saying don't do it,
I'm just saying from a numbers point of view,
follow what I'm trying to do?
So if you think in terms of an opportunity like this,
then if I look at that,
wow, chances of failing is high.
- [Toby] Yeah.
- I'm better off just staying at home and doing nothing,
have the money in my bank,
than starting something like that might lose money for me,
for my family, for my investor.
Versus... does that make sense?
A battle is won before it's ever fought.
From the art of war.
So if you know that's maybe not exactly
ideal what you wanna do,
maybe look in other businesses.
Doesn't have to be because you have a restaurant background
you have to do this.
Maybe, I don't know, I'm just throwing ideas out there,
What other businesses can you do?
Maybe leverage the background that you have?
How can you do something that's maybe a lower cost?
Less risk.
- [Toby] Well it could be,
because we are quite famous back home,
that chain is quite famous for the
chicken barbecue and sauces.
And I was thinking about also probably
importing some of our sauces.
- Sauces?
- [Toby] Yeah.
- Now I like that a lot better.
- [Toby] To here.
- I like that a lot better.
Why, tell me, everybody?
- [Toby] Well it's a lot cheaper first of all.
You don't need that much investment for that.
- Yes.
- [Toby] Yeah.
- For a bottle, how much could you sell it for?
- [Toby] That I don't know yet.
We're just--
- How much are you selling it for back home?
- [Toby] Back home it's,
average is 250 pesos,
which is around seven dollars.
- Seven dollars.
And by the way,
the hot seat is not just me giving you answers.
I want you to learn how to think.
How to what?
- [Audience] How to think.
- So everybody it's thinking, brainstorming,
exercising your brain.
That's what this is for.
I already know this shit.
It's not for me.
This is not for me, it's for you.
So that's good.
So if you're doing the sauce business,
then what is it?
- [Female Audience Member] (speaking softly)
- No it's okay, it's okay.
So then maybe look into that.
What else can you do?
- [Toby] Well I also have a sales background
since I got here in Canada five years ago.
I've been working for software, IT and technology sales.
- Okay, okay, okay.
So are there opportunities within there?
- [Toby] Probably.
- Not so much, write this down.
The number one key to business success, I believe,
is to avoid bad assumptions.
Is to avoid bad assumptions.
All the problems I have in my life
started off as a good idea.
One day came up with an idea,
ah I should do this,
let me put in some money, let me start this business.
Bad assumption, assuming,
Well, you know what?
When I launch this, everybody will love it.
I talk to some of my friends and family
and they say it's a good idea.
Let's do that.
And then I think when I launch it,
within two months, I'll make a hundred grand.
Then it turns out, whatever I assume,
all my friends and family love it,
When I have the product, you go to them,
would you like to buy some?
No.
Right?
So and then when I launch it
I thought I will make a hundred grand in a few months.
Turns out I didn't make a hundred grand.
I didn't even make 10 fucking grand.
Lost money, first month.
Lost money, second month.
Should I still keep doing this?
Lost money the third month.
Shit.
Shoulda done more research.
So the key to business is to avoid bad assumptions.
Assuming whatever you're doing,
oh, it's gonna work a hundred percent.
No, in fact challenge yourself,
ask yourself tough questions.
On my desk, this is very helpful,
On my desk I have three questions I ask myself every day.
Every day.
First question is, what could go wrong?
What could go wrong?
Second question is, what don't I know?
What don't I know?
Last question is, what don't I see?
What could go wrong?
What don't I know?
What don't I see?
So as you go through those questions, for every one of you,
you look at your business
and you ask yourself those questions,
hmm, what could go wrong?
What is the risk?
Versus, what happens if everything goes right?
Which chances are, not gonna happen.
And if you ask yourself these questions,
you would be able to know
what are some the risk involved.
And if everything does go right, is that okay? Yes?
Hello?
- [Audience] Yes.
- Yeah, it's okay.
But if what could go wrong,
now I'm thinking what's the down side?
Can I live with the downside?
What is the upside?
I don't think about the upside.
Like any investments, any deals I do,
I think of what's the downside first.
How much money can I lose?
Am I okay losing that money?
If it's not okay, then I'm not so sure.
Can I live with it?
Not just, wow I'll do this deal
and I'm gonna make all this money.
I don't think about that.
Does that make sense?
Yeah.
Any other questions?
- [Toby] I asked them.
- Okay.
Round of applause for Toby.
(audience clapping)
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