- We don't care about revenue.
Why do we care?
I want to start a million pound business, why?
No one cares.
So it's profit.
Ah, you wanna make a 100,000 pound profit,
actual money to go in your personal bank account.
Fantastic.
Now what revenue do you need to generate to make the profit?
That's a much better question.
(indie music)
One of the things that I always ask business owners,
the ones that are the most successful,
is they can categorically tell me
what the business looks like when it's finished.
What profit it will make when it's finished,
what revenue will look like,
and what the team looks like,
and what the culture of the business is,
and what your roles will be.
If I asked you, what do you want your children
to have a life at 25,
you don't need to get an Excel spreadsheet to tell me
what your ideal for your children will be when they're 25.
You'll say, yeah, I want them to be happy,
I want them to, you know, I want them to--
Or where would you like to see yourself,
you know, if I asked 16-year-old you,
what would you like to be when you're 40?
I mean, I'll tell you what it is for Partyman.
I want it to be a 15 million pound revenue business
with a two and 1/2 million EBIT down.
I want our teams to be fantastic and have a really good time
in being part of our business, I want us to be
a national brand with brands that families love.
Why?
- We would like it to be-- - Whoa whoa whoa whoa, why?
So it's all revenue-driven but you're only--
So you could have a million pound turnover
but lose 100,000, which lots of businesses
are in that situation.
But you're not gonna be able to sell it
until you categorically say, they're not--
'Cause loads of businesses sell, they're losing money,
but WhatsApp sold to Facebook with no revenue
for billions of pounds.
But they bought into the management team.
The fundamentals of what you need to do is this chart.
So you would say, right, okay we wanna make 100 grand profit
in year one.
If you can't make 100 grand
you might as well go and get a job.
So there's no point in having all the stress
of being a business owner for any less.
And then you might say, right, we want the business
to be a one million pound profitable business in 10 years
'cause that's something that someone wants to buy.
There's a difference between a profitable job
and a profitable business.
So profitable business is a business that works
completely without you, it's an investment.
So the three stages of business
is job, business, investment.
Most people build profitable jobs, like an electrician,
a plumber, they got a profitable job,
it pays their living, bubbly jubbly.
The next stage is a profitable business.
They're starting to put some management in place,
maybe they employ six plumbers,
but they make everything happen.
It's a key man business, they are the business.
Like a restaurant, a famous res--
You know, the best restaurant in Witham
or whatever, wherever you guys live,
there's an owner manager that makes it happen.
That's not an investment.
A lot of people wanna buy a property to rent out
'cause they know in their mind's eye
this is a hands-off investment, I'm gonna put a tenant in,
I don't need to do anything,
I don't need to manage it day to day.
So job, business, investment.
Who wants to buy a job?
No one wants to buy a job!
The next stage is a business.
Well, you can actually buy my business,
but you've gotta turn it into an investment.
So you've gotta think, am I building an investment here
or am I building a profitable job
or am I building a profitable business?
And in the first stage you should have a profitable job.
And then into year two we turn it into a business
and into year three, four, five,
we're working at how we can become a profitable investment.
This is how I work it out.
A chairman or a shareholder up here, CEO over here,
heads of departments over here.
So this could be sales, ops,
marketing, admin, HR,
and then down here you have the technicians
that do the day-to-day in the business,
and then we call this the entrepreneur's pyramid.
It works like this.
80% of the business owners are over here,
15% over here, 5% over here.
This is the profitable job.
This is the profitable business.
And this is an investment.
Basically you wanna be rising up the entrepreneur's pyramid
to say, I have got a business that I just turn up
to a quarterly meeting.
And over a period of time that's where you need to get to.
That's what successful people do,
and they work it out by doing this.
They reverse-engineer the business.
When's the business gonna be finished?
We want to know the date of when it's gonna be finished.
We are going to put a date on it.
At the end of 12 months, what's the profit gonna be?
We want it to be 100,000 profitable business.
We don't care about revenue.
Why do we care?
I wanna build a million pound business, why?
No one cares.
So it's profit.
Ah, you wanna make a 100,000 pound profit,
you actually want money to go in your personal bank account.
Fantastic.
Now what revenue do you need to generate to make the profit?
That's a much better question.
So you might go, well, actually,
we're gonna get 10% of all ticket sales to make--
Yeah, so we need to build a million of revenue
to make the 100,000 profit, brilliant, much better question.
What's our team look like
that's gonna make that revenue happen
to make that profit happen?
So let's describe the team that we need to do that.
Forgetting ourselves.
This is a limited company, not a human being.
So we're gonna need a salesperson, we're gonna need
a marketing person, we're gonna need a book keeper,
and we write it there.
What's the culture of the business gonna be like?
This is the war plan, by the way,
it means the battle is what we're gonna fight
to win that war.
This is the war plan, this is the war plan,
these are the battles that we're gonna fight
to win the war that we've decided.
So then we're gonna have a culture
of how we're gonna fight our war,
how maybe it's gonna be great customer service,
we're gonna be fair, we're gonna do all those things.
We write it down.
Then, crucially, what do you need to do?
Who do you need to become or what do you need to do
to have this stuff?
What do you need to do and what do you need to become
to have all of this stuff?
And you write it down.
Now when the business is finished,
we start playing fantasy football.
What does the team look like to make the million profit,
the 10 million of turnover that you're gonna need?
And we write it all and we start thinking about it
ahead of time.
So over here you got a book keeper,
but over here, that book keeper is not gonna be part
of the same team, we're gonna need a finance director.
We're not gonna need an operations person.
We're gonna need a managing director at this point.
And so we blank it all out
and we reverse-engineer the business.
So that when I can ask you those questions
you can turn around and say to me,
well I wanna do this, this and this.
Then you can work on you, you know?
And until you do that, don't spend any more money on it.
But you don't know what you want to do.
Build a brand, no one cares.
Your current challenge is you don't know what--
This is more important.
(women talking over each other)
So what you're doing is you've got loads of battles
you wanna fight, you haven't got a war plan.
Which is most people in life.
Forgetting business, most people walk through their life
fighting battles without a war plan.
Most people go to university to kill time.
But then there's the smart people
that say I want to be a doctor.
So when they go through their studies
and have all that stressful time, they got a war plan.
The end, the finish, is I'm going to be a doctor.
You can't exactly describe exactly what you want.
- Yeah, we do, we have to. - You can't, I've asked you,
you can't.
You said you want-- - Open the doors--
- You don't even know what profit you wanna make, do you?
What does your team look like?
You've got some sensible battle plans,
but you haven't got a war plan.
All the battle plans are correct, by the way.
It's just you have a--
Basically you're building a house
without a set of architect plans
and that's how you gotta think.
You sorta know what the house looks like,
you want it to be nice, you want it to be comfortable,
but you haven't got a set of architect plans.
You've just got the plans that you think you need
'cause someone said it.
- But it's kind of after,
and so the business side of things--
- But a startup entrepreneur should never do tech
just to kick it off.
I don't wanna spend hundreds of thousands of pounds
on tech and it's never perfect.
You shouldn't be doing tech as your first business.
It's stupid.
You are not Microsoft.
You would never get me, even at my level,
investing into a technology-based business
'cause I haven't got pockets deep enough.
I've just spend 200,000 pounds on our software stuff
and they're saying you need another 50 grand
to finish it off.
You're gonna try and create something that works like Excel
and Microsoft Word and you ain't Bill Gates.
You haven't got pockets deep enough, you're not Jeff Bezos.
Amazon didn't make money for 12 years!
And you're trying to achieve that.
So I would say, right, let's build an audience,
let's call it HobbiHub, let's build a brand,
build an audience, how can we generate revenue
in the next couple of weeks?
And then from the revenue that you generate,
you invest that in your tech.
I built Teddy Tastic, which, you know I make teddy bears,
we've made over a million teddy bears.
We built a 1/2 a million pound business in year one
without a website, no tech.
- [Jennifer] How did you do that?
- I knocked on doors.
I said, would you like to buy these?
I made 500 calls and two people said yes.
So I contacted people that I thought were most--
I use a flip chart for everything.
I would write down 10 people that would be my customers
guaranteed if I could get in front of them.
So I wrote down Drayton Manor Theme Park,
I wrote down Butlin's, I wrote down
and then I direct mail messaged them,
so I sent teddy bears in the post to them,
and we built that business and now I went to--
I got in the car, went to people.
But I knew that they would--
Tech is really hard to sell.
Most entrepreneurs come from,
and it's one of my jokes, ain't it?
I've built an app, and I think, oh my god, shoot me now.
(laughs) You know, I'm--
I just can't stand it because what people are doing
is they're trying to say, right, yeah,
we'll compete with Just Eat.
Just Eat, you know, what, 50 million pounds
worth of venture capital money?
But you haven't got--
Your need to build an app that's real,
you need like four full-time developers.
It'll never stop.
I always talk about steps to make.
If you look at my career,
I wanted to own visitor attractions,
so the stage one at 15 was I'm gonna become a magician
and do kids' parties and I will learn
how to interact with customers and have instant revenue.
By the time I was 17, I bought a house.
By the time I was 18, I bought another house
from all the revenue that I was making,
then I remortgaged them all when I was 21
and opened our first family entertainment center.
You've got to build business that cashflow day one.
So like a coffee shop, you open a coffee shop,
you invest in the coffee shop, you are going to make
at least 10 pounds by selling four coffees on day one.
This needs to be branded and out there and compete
with some big people on day one.
It's not possible.
Well I think you should keep it there.
I mean, I would be doing, like I told you,
like 8 Out of 10 Mums,
I would create a HobbiHub Facebook group
and talk about stuff, build an audience.
So like 8 Out of 10 Mums is the biggest Facebook group
in Essex for moms, in my opinion,
and Sam does that all for free,
but she's built a powerful audience.
But she's got an audience
and if she wanted to monetize that,
if she'd come to me and said I wanna start
an 8 Out of 10 Mums app, I'd be thinking, right,
you got 300,000 big audience,
that's a different conversation.
You haven't got an audience.
- [Jennifer] No, we haven't yet.
- This is a difficult business, it's not--
So I put businesses into two categories.
Easy difficult, and difficult difficult.
I always want to do easy difficult, not difficult difficult.
To get this going you'd need a venture capitalist,
someone that has got deep pockets.
So for me, an easy difficult
would be setting up a successful coffee shop.
If you started at 40,000 pounds worth of capital
and you opened a coffee shop,
you would now have instant cashflow.
This is not-- (mumbles)
- And I always look for instant cashflow businesses.
So from the day I open the door, it might not be profitable,
but there is some money coming in from day one.
So if it was my business,
I would continue to build a directory,
I wouldn't worry about everyone taking the work
but I would build an audience
so that you can be a marketeer for these companies
and then they would pay you a fee to go on there
to get customers.
You gotta make content.
You gotta be--
- [Jennifer] We obviously did that.
We've got the Instagram, we got video, we got Facebook.
How do we grow that?
- See what I'm doing.
Just probably what you're gonna do in the mom's podcast,
the Hobbidihob podcast.
What was it called?
Sorry, HobbiHub, HobbiHub Podcast
has gotta be three times a week.
You've got to make five videos a week.
You've gotta put 25 bits of content a day, preferably 100,
and then you will build an audience
and then you will have something
that literally will make you a snowball of money
after three years of consistently doing it.
You gotta write books, you've got to--
(scoffs)
(laughs)
Basically what we do.
Speaking on stages, making videos.
All the lot that have gone on Love Island,
just copy what they do.
Watch them go on Love Island, beforehand they've made
50 Instagram stories a day, they're posting on Facebook,
they do 25 tweets a day, nothing will happen for six months,
nothing will happen for a year, but then eventually,
you'll start building an audience.
Then once you've got an audience, you monetize the audience.
So you think about Disney, they're a media company
that has an operating company on the side.
So we'll make Snow White, we'll make Toy Story,
but then people will wanna come on our cruise lines
to buy our toys and go to our theme parks.
You're an operating company right now
without an audience, so you have to buy the audience
or create the audience.
Buying an audience is very expensive but works.
So now building an audience is free but a ton of work.
Look, I've done three books, I've wrote articles,
I've done, before I sat with you I've done a LinkedIn Live,
a Facebook Live, I have a meeting, I've done a podcast,
and we're going to do another video up in London tonight.
We made two videos set Monday night, Thursday night,
7:00 on YouTube every night.
I've only got 3,700 subscribers but it grows every month.
Partyman, you know this,
we've got Partyman TV, a YouTube channel.
New video comes out every--
We're on TikTok and bippidi bop and all of that stuff.
Basically you gotta think yourself, you're a TV channel.
So you're on TV.
You literally, all of this, I don't wanna be on camera,
you've gotta get over it.
We're here today at this yoga class,
you make a video about that yoga class.
You're a media company.
So I always say-- - Another idea.
- You've gotta think that you're running four companies
in unison, this is what I teach.
Company number one is the company you are today.
What is the company you are today
that's gonna cashflow the business?
So that is an audience-building business
that charges people to go and you write articles about them
and you may be, you do competitions with your audience
and people pay to be in those competitions.
Company number two is this app thing,
'cause that's the company you really wanna be.
So company number one is the company you are today,
company number two is the company you really want to be
the business when it's finished.
So this one, this company here,
is the company you are today.
This company is the company you really wanna be.
This company can be the company you really wanna be
'cause doing these revenues rather than these revenues.
Company number three is a media company
that pushes an audience to these companies.
And company number four is a property investment company.
So when you invest companies one and two's profits
into a property investment company,
so you buy houses, flats, commercial property,
that's what I do, and that's where you get paid
from property, not from your business.
And then so if something happens, you're always secure.
You need to be sitting around talking about
how can we make five grand this week?
Basically entrepreneurs, usually the reason
they're successful is 'cause they're hungry.
They have to.
I know you might have partners that have got jobs
that bring in some money so there's not a need
to put food on the table.
There's no need to do it.
So what usually happens is once that limited time
gets closer to, right, this is the end,
there's a hive of activity and people solve the problem.
It's human beings, it's what they always--
That's why deadlines, like kids,
you gotta get your homework in by Friday,
probably do it Friday morning.
Human beings have this problem.
Whereas entrepreneurs they usually, they're just weirdos,
we are a weird bunch that, you know,
most people, and I think this is right,
they work to live and I live to work.
Most people get more redundant.
They get 60 grand, they take six months easy livin'.
And then they go, all right, but I gotta get a job now.
Whereas I'd be like, well I got 60 grand,
I'll get a job tomorrow
and then I'll invest the 60 grand into property
and have extra revenue for the rest of my life.
The situation is you won't, until you know
what you want to build,
there is no point in moving any forward.
Not battle plans.
The battle plans are so important
once you know what the war plan is.
And what you'll do is get stressed out
because you'll win each battle
and it's like, next battle, next battle, and you're like,
why are we fighting all these battles?
The war plan is so important
because it makes the battles less stressful.
I would start with what profit do you want to make?