- Hey gang.
If you'd like to build a
profitable business.
in this video,
I'm gonna come up with my best ideas
of how you can sort of success
and I understand that most businesses
just don't make it.
In fact, 5% of businesses only may get a 10 years old.
50% of business gone within the first two years.
80% of businesses are gone within five years.
What are the traits
and personalities of the top 5%
that actually make it?
Most people in businesses are struggling.
In this video,
we're gonna discuss all.
If you love business stuff,
you love entrepreneurship
and you're passionate about growing your business.
Why don't you do me a little favor
and hit the subscribe button on
this here.
YouTube channel.
Join the rest of the crowd that
are getting great knowledge
to grow their business.
Oh, I know some of you are gonna watch this video
and disagree with some of my points.
Maybe you'll agree.
Let me know in the comments below,
as we flutter through this video.
I want to talk to you about this book here.
It's called "The Experience Business."
A handsome fellow called James Sinclair.
That's right.
Me, wrote it.
And on page three of this book,
I talk about the best traits
of a profitable business.
It's just fact guys that some businesses,
are far more successful than others.
Far more profitable than others.
They last a lot longer than others.
Because they have the traits
and personalities of great businesses.
Pastry of "The Experience Business."
These are the questions that I ask
when I'm starting a business.
Can I scale the business?
Is the business capital intensive?
I just find that businesses are continually
capital-intensive have one or two important things
that are bad and good about them.
They're really capital intensive
and less means, less people operating in the space.
But it also means that you could run out of cash
and the business goes.
For example, a theme park.
It's very, very, capital-intensive.
Always needs new rides
and blah, blah, blah.
And sometimes people can't fund it.
That's why lots of them go bust.
In this country, piers.
Piers are another classic one of these.
You can't often go buy a pleasure pier.
And when you do get them,
they constantly make cash
or trying to avoid capital-intensive businesses.
If you do buy one,
know that not many people can compete with you.
And that might give you a slight edge.
You know, I'm saying one thing
and disagreeing with it on the other hand.
That's lot of things about businesses.
Is there a chance for high price,
profitable tags sales?
What do I mean by that?
Well, some businesses you just can't charge
a lot of stuff for your services.
You look at a dentist,
you can be bad at dentist
five to 6,000 pounds.
That's a high price, profitable tax out.
You want to look for businesses that
have the opportunity where you can charge
decent amounts of cash.
Some businesses you just can't.
For example, ice cubes.
You just cannot charge 6,000 pounds for an ice cube.
You get the point.
Next one.
Is there a chance of residual income?
It is my experience.
Any business that I've been involved in,
where you've got regular customers that
buy from you again and again,
by residually, like renting a house out,
people pay their month rently.
Insurance, people renew every single year.
Regular consumable products in your business.
Toothpaste, people buy their toothpaste
or an old food stuff.
They keep on buying food stuff.
Netflix, another residual income based business.
If you're a business that starts
from zero each month,
I.e, selling a car.
For example, you always have to find
the next person to buy a car.
I'm not saying that
that business doesn't work.
I'm just telling you that the businesses,
that the personalities that I'm describing now
are always the ones that just seem to last a lot longer.
So residual income is one of
the stress busters of business,
and always look for that.
Is it a "me too" business
or one with a high barrier to entry?
It is my belief that "me too" businesses
are always ones that don't last too long.
What's a "me too" business?
Well, I start selling cupcakes.
My best mate says,
"Oh, I can start a cupcake business."
"All I need some flour and sugar and an oven."
And then, white Presto.
I'm in competition with you.
So I always try
and avoid those "me too" businesses
and try be a bit more high barrier to entry.
The higher barrier to entry you are,
the less that people will compete with you.
The great example I give on this is,
I want to open a six bedroom bed
and breakfast hotel.
Most people could do that in their lifetime
by remortgaging, borrowing some money off
of friends and family.
A little bank loan
and hey Presto.
They've got their six bedroom hotel.
If I turned around and said,
"I've opened a 500 bedroom hotel
with a lazy river, indoor tennis courts,
function suites, et cetera, et cetera."
Most people think that's not attainable
and therefore don't try and compete with you.
So I always try and look for a bit
more high barrier to entry.
I always find that gives you a bit more
chance of staying in the game longer.
Is there margin in the business?
This is the key factor of a successful business.
If you haven't got margin in your business,
you then competing on price.
Try and find businesses where
there's chunky amounts of margin
so you can give great customer service,
reinvest into the business,
do marketing,
think with about lifetime value
rather than just for today.
I mean, the classic one is Apple.
I mean that costs them what 200 quid to make an iPhone.
And they sell the thing for 1200 quid.
(bell chimes)
Chunky amounts of margin.
That means their store is always on point.
The customer service is fantastic.
They can invest in the customer,
invest in their people,
invest in their product
and continually do R and D.
Companies that continually do R and D,
which is innovation if you like.
Research and development, innovation.
If you are able to continue to do that,
you're always growing your business
and always moving your business forward.
Which means that your competition
is always trying to catch you up.
Here's the thing gang about business.
You're always going for a process of innovation.
If you don't innovate the business,
your business will evaporate.
Margin allows you to
continually innovate the business.
Because if you've got a low margin,
you're always looking at the profit.
Nice.
How can we save a bit of money there?
If you're in a position where you've got
chunky amounts of margin,
then you can really invest in the business
and make sure you're a market leader.
Will people want to buy it when you're finished?
It's just a complete and utter fact.
Look, if you can build a business,
someone wants to buy when you're finished with it.
For example, Dana.
She is a 500 bedroom hotel.
There's always gonna be people
that want to pay for those higher barrier
to entry businesses with good margin,
good residual income,
and a great management team at the top.
So I always think who's going to be my buyer
when I'm finished with this business.
And you're always looking for OPM buyers,
people that are buying with other people's money.
That's private equity money, pension funds,
venture capitalists, those sort of people.
Big people that want to buy businesses.
How much capital will I need
to scale the business up?
Is this thing gonna be a continual drain
on my capital resource?
Is there a need for the business?
My God!
It's gonna be so much easier,
if you can build a business,
where there's actual need for it,
where people love it,
want it and need it.
And after the initial setup,
would it be easy to find the management?
If you can build a great management team,
then you're in a place of building a business
that someone wants to buy.
Because it's actually the management team that you build,
is the most valuable asset in a business.
Because the management team deliver,
the profitability of the business.
Now there's a couple of other things
that I think are really important to mention.
A hungry audience.
If you can find a business where there is a hungry audience
for the thing that you want to buy,
and there's a big population.
I always say chimney pots is one of the things
that makes business easier.
If you've got an abundance of millions of people
in a place that wants to buy what you want to buy
and they're hungry to buy it.
You're always gonna be in a place of really
being in a better position to be successful in business.
Hopefully you liked this video.
Let me know what you think in the comments below.
And don't forget to check out my podcast.
The podcast that,
where I coach people to grow their business.
You can apply it to be on the podcast in my website,
jamessinclair.net.
And also on that website,
you can get this book for free.
'The Experienced Business."
All you need to do is
pay the posts and packaging.
Again that at jamessinclair.net.
I'll put a link in the video description
and I'll see you soon.
Maybe you want to join my Entrepreneurs University
and try that free 14 days.
Go down the website,
jamessinclair.net as well.
Basically everything leads to the website.
jamessinclair.net.
Watch this video on business management
to grow your business
and subscribe to the channel by clicking here.
See you soon.
Bye-bye.
(upbeat music)