- Hey guys, James Sinclair here to help grow your business,
and in this video,
I'm gonna be talking about how we built a,
two businesses,
in the coronavirus pandemic.
But the business that I really wanna talk about
is business number one.
Which is a farm shop drive-thru.
You might be thinking,
"What's a farm shop drive-thru, James?"
Well, the best way to describe it
is if you think of a McDonald's drive-thru
and you think of a farm shop,
you sandwich the two together and that's what you've got.
And in the first 15 days worth of trade,
we've done 15,000 pounds worth of sales,
which I think is pretty good for a start up.
And better than that,
it's actually made some money
which is contributing to our business.
Now, if you don't know me,
our businesses usually we do about a million pounds
worth of sales every single month,
so 12 million pounds worth of sales and right now it's gone
We're doing about 150,000 pounds worth of revenue a month
which is just from our day nurseries.
And we've huge overheads,
we have a payroll of about half a million pounds and yes,
I know the furlough scheme is helping
and sometimes hopefully we're gonna get
through some of these CBILS loans.
Those of you that don't know, the CBILS loan
is the Coronavirus Business Interruption Loan Scheme.
But the entrepreneur in me knew that I knew to do something.
I knew that I needed to come out of this.
I'm writing a new book called "The Dream Team",
I've been doing a podcast every single day which is called
"The James Sinclair Business Broadcast".
I'm gonna put a link in the video description
of how you can go and check out my daily podcast,
where a lot of the time, I'm coaching entrepreneurs,
we're recording it,
making it into great content to help you grow your business.
But I've thought I'd give you a breakdown of exactly
how this business is done.
How we've got our initial flurry of customers.
We're getting about 100 customers every single day.
I'll tell you about the average customer value
that we're doing, daily sales,
the highs, the lows, it's all coming.
So I think I am gonna start off with the numbers
to give you some real context of this.
And I've put them up on this board here.
We've got sales of 15,000 pounds.
We've spent 8,000 pounds on stock,
and we've got a stock value of 2,500 pounds.
So we're always sitting on about
2 and 1/2 grand's worth of stock.
So you really need to add that back into your profit,
because that's cash that you own
and you're gonna turn into cash.
So, 15,000 pounds worth of sales, we've spent 8,000 pounds.
Most of this stuff is not vatable,
so I haven't allowed for that in this because
it's takeaway, there's not much VAT in it
because there is no many,
well, VAT is gonna come into it in a big way soon,
when we start doing more product ranges
but at the moment, we've only got about 150 product lines.
15k worth of sales, we've spent 8k
obviously that leaves you with 2.5k, with 7 pounds,
but we've got 2.5 grand's worth of stock
so the contribution to the business in this first
two weeks of trading is 9,500 pounds.
Which, quite frankly, I think is quite impressive
for a start-up business in a pandemic.
But let me go through some of the other things,
what have we capExed?
You know, what did we use to set the shop up?
Well, do you know what we did?
We got some tables that we had around the farm.
For those of you who don't know, I own the farm park
and this has been built next door to the farm park,
in a disused barn that we hardly ever used.
I'll overlay some videos and shots of me,
so you right now so you understand what the farm park is.
So, what about the capEx?
Well, so, 2,700 pounds on a freezer,
but we have freezers in our kitchens and our restaurants.
We've unplugged all them, shoved that in there,
but we did need a display chiller, so we got that involved.
And we've also spent 250 pounds on some baskets
but I think there's about another 20k of capEx to go.
And with that 20,000 pounds,
what do I think that's gonna do
as a revenue profit generator for us a business?
Well I'll tell you.
I think that we're gonna have a business that does
a million pounds worth of revenue a year.
At the moment, the business is just a
click-and-collect business.
You can't actually physically go into our shop.
And people have been spending,
just literally on our website,
circa 1,000 pounds a day.
So I'm gonna times that by 365.
The mathematicians in you, that is?
365,000 pounds.
But I also rang and spoke to some other farm shops,
because I think it's really useful,
when you're setting up a business,
go and speak to other people in the sector you're in
and ask them what they're doing.
They take 20% of their sales online
and 80% physically in store.
So I'm just sort of roughly doing this here,
I'm thinking well if I'm doing nearly 400 grand in store
online sorry, I can do at least,
at least 600,000 pounds if people come into our shop
and actually saw our products.
And so that's what we're doing,
and also, noticing that we have 200,000 people visit
our farm park.
And yes, you've guessed it, once this pandemic's over,
I'm gonna route all the people that go
through the farm park to exit through our farm shop.
And they'll be able to go into the farm shop
as a standalone thing as well.
So I'm looking forward to seeing how
we can really get this business going.
So once this is all over, I could be in a position
where we've got another revenue stream that we're
just bolting onto the existing business that generates
another million pounds worth of sales.
What about the margins?
Let's talk about that.
Well the margins are not what I'm used to.
But here's some things,
I've got some notes here on my board
that I thought we would talk about.
We haven't got the existing overhead costs,
so usually, if you went and set up a farm shop,
you would have new rent, new electricity, new rates.
I'm already covering all that stuff,
it's on our existing site.
So that means that we can be
a bit more keener with our margins.
I mean, let me, we should tell you,
when we run one of our restaurants at our site,
if something costs us you know 1 pound,
we'll sell it for 5 pounds.
a pound for the costs, a pound for the staff,
a pound for the overhead, a pound for the VAT man,
and a pound for profit.
That's how I usually price my stuff,
and I create what I call a red, amber, green
Excel spreadsheet, where I put all my costs
and add all this stuff in,
so that I know that we're doing what I call
"the times 5 ratio".
But you can't times 5 for when you're running a farm shop,
people will never buy from you.
If you bought in a product for 1 pound
and tried selling it for a five, and they'll go
"See you mate, I'm off to Tesco's and Sainsbury's!".
So we've had to come up with a solution,
where we've had to accept that
we've got to lower our margins.
So you're making between 30-40% gross profit,
and it's nearer to 30% but you've got some products
where you can make more on.
So the margins are lower, and we've had to make sure
that we're doing weekly stock takes
and I think we're gonna update that in to daily stock takes,
because when you're holding this much stock,
we've gone for an alcohol license as well.
Well, we learning this all on the fly.
And people are saying,
"oh, can I put a bottle of wine on there?".
"No,"
but luckily the local authority have given us permission
to do that so within two weeks we'll be selling booze.
And we've found a local baker,
so we gonna be doing local fresh bread as well.
So we're really upping the game on our product range
as well which is all going to increase
the average customer value.
And let's talk about average customer value
while we're here.
When it comes to business, there's two real key ingredients
for building a successful business.
Number 1 is the love, want and need,
where people love what you do,
want what you do and need what you do.
Well, like food, they love food,
they want food, they need food.
I don't know, maybe an iPhone,
they love an iPhone, they want an iPhone,
they need an iPhone.
That's a great place to be.
And this is with this farm shop.
They love food, they want food, they need food.
Most businesses are love and want
like the thing I've got next door,
which is a visitor attraction.
People love days out,
they want days out,
but they don't need days out.
So in a pandemic no one's buying.
But this business is a startup in a pandemic
and people are buying.
So I'm really pleased about that, but what's really good.
The other element of this,
if you can get a business's love, want and need
take this one is, it's talking about average customer value,
average lifetime value and average transactional value.
And because we're using this platform called Shopify,
which is quite widely available,
we can see the returning customers,
how much they're spending on average
and their lifetime value and transactional value.
And they predict what their lifetime value is going to be.
So some people in the first two weeks
have already at the top end
spent 200, 250 pounds with us.
People are returning and they're transacting
once or twice a week.
So am working out what the transactional value
could be 52 times a year.
The life time value,
if we keep this going for 30 years,
it's going to be huge.
People could be worth 20 to 30,
to maybe 50,000 pounds of lifetime value
with our day out business next door
the farm visitor attraction.
People come once or twice a year.
So the dynamics of business is so much better
because people transact more
the lifetime value is better,
the average customer value is better.
So we can reduce our margin,
knowing that people are gonna transact with us more
rather than a leisure attraction business.
Here's some of the other things that I've also learned
that we need to do in this business loss leaders.
You're buying in milk and bread and supermarkets
practically sell bread and milk for what they buy in for.
So we've had to follow suit.
So some of your key stuff,
you've gotta bring people in with really good lost leaders
so that people think you're really good value for money.
And we're learning more and more about this.
And I can't wait to make so much more content
to all the stuff that I'm learning
in this business is very different from my day nursery,
soft play, et cetera, et cetera,
so that I can help you grow your business.
One of the other things is the brand development.
I'm just gonna show you here.
Here is the original logo
that we use because you know,
I said, "look, we need to open up.
"We need to get some traits."
We just put this shoddy logo together
and it doesn't really feel wholesome and nourishing,
but we just needed to get it up.
And this is, I'm just going to put,
this is what the original website looks like,
but here's, what's coming ladies and gents.
This is the new brand that we've created,
which is much more wholesome,
much more in keeping with what a farm shop should be.
And as that brand develops,
we're going to get ready for some way better marketing.
The first website that we used was a freebie Shopify theme,
but I knew it wasn't converting people
as much as we should be.
It was getting about 3% conversion on the website.
But knowing that we was an established brand,
I thought God, we should be getting more than that.
You know, literally thousands of people are shopping
and having a look checking us out.
I mean, and that's what we've done
'cause we've got a good audience on Facebook.
We've got a good email database.
We just,
we really have it that let people know.
So they came in and checked us out,
but not enough people were converting.
So we've now set up a paid for version of Shopify,
the gold version.
And I think that is going
to increase our average customer value,
get more people to buy.
And here's some of my wilder great ideas that I've gone.
I wanna make this business a membership business.
Whenever you can make people feel like members,
when they buy from you.
It's fantastic.
Costco, it makes you feel like a member,
American express it makes you feel like a member
and therefore it drives loyalty.
And I wanna do the same thing.
So for 699 a month,
people can be a member of the farm shop,
but then also get 5% of everything they buy in store online
or in physical person.
And we're gonna open this up as a physical shop
next week,
where actually people can come in and shop.
Cause you understand the magnitude of this.
This wasn't even a business two weeks ago,
we've set it up online as a digital service.
And then people are actually gonna come in
and shop in our business.
I'm gonna put some shots of what it looks like now.
So you can understand that we literally done
this from scratch.
We haven't spent tens of thousands of pounds
on shopfitting.
We're just going for it guys.
That's proper entrepreneurial-ism
and I am absolutely over the moon about it.
And for the 699,
they'll be able to come in get 5% off.
But we're also going to send them digital recipe cards
every month and put them in a closed Facebook group.
So they're part of a community,
note when people go to Costco,
"I go to Costco I'm member at Costco."
They love telling you I wanna create
that same thing so that it creates loyalty.
5% off, digital recipe cards,
you're in a closed Facebook group,
special offers for members.
And if you live locally,
we will deliver to you for free.
And we're gonna get a funky van
that look really stands out.
I'm so excited about this business.
So new website,
better conversions,
better products as well.
We're now going to Spitalfields market.
If you've not heard of Spitalfield market,
this is in central London.
It's one of the biggest fruit
and veggie markets in the country.
Sorry, it's in Europe,
but definitely in the country.
So we're getting the best possible produce that we can get
at grubby hands-on into our customers.
Better bakers, better bread, flipping fantastic.
I'm so excited about it.
And I just thought, I'd give you an update to say,
look guys, there is opportunity out there right now.
Things can be done.
Now you may not wanna go and open your own farm shop,
but I just wanted to give you some encouragement
that we've managed to set something up from scratch.
I think it's gonna be a million pound revenue business.
I'll let you know in a year from today.
Just how well we done but to get customers from scratch.
I suppose the message is here, right?
The same amount of money exists in the world gang
money hasn't disappeared it just goes in different pockets.
So you've gotta find out where the money's going
and make sure your energy flows behind it.
And I'm big proud, I'm just give a
(honking)
sound to my fantastic team that have made
this happen and watch next week's video,
where I'm gonna show you how I've led this in isolation,
'cause my Mrs is pregnant.
We're six weeks away from the baby number two,
so I haven't been able to get involved.
I've been leading this digitally.
So check that out in that video,
click this video here,
'cause it's gonna help grow your business
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Thanks for watching.
I'm Jameson Sinclair.
To grow your business that's where you come just here.
See ya.
Bye.