Transcription
I was 15 years old when I first started a business. I had no choice but to start a company. It's the best thing I ever did. In 35 years, I've gathered so much knowledge on how to build a business. Just recently, a year ago, I launched a business called Help Bank, and today, based on last money in, it's already worth 30 million. And I'm going to give you all the knowledge I've gained over the last 35 years in this video right now for free. All you need to do is listen for 5 minutes. And if you can't do that, I've got some news for you: you're probably not going to make it.
Now, I'm going to go through everything you need to know on how to start a business, from where to start it, which is more important than you realize and so many people don't talk about it. How you're going to actually get the idea formed in your head and into a business model that can work. How to sell that business to everybody, including potentially a buyer later. How to raise money. I've covered this in previous videos. I'm going to try and go a little bit deeper today. And finally, and probably most important, is the boring stuff: the legals, the trademark, how to make sure you pitch, do you need an NDA, all the things you don't know you don't know. I'm going to go through in this video. So let's get started.
Right, a question most people don't ask themselves when they're thinking of starting a business: Where should you start it? Now, one of the reasons people don't ask where is because maybe you've got no money and you're like, "Well, I've got no choice but to start it from my mom's spare room." Fair enough. Sometimes, where you start is literally what you've got. So I'm going to put that down. And I have started many businesses from many shitty locations. For now, I want you to feel comfortable to start it anywhere. You know, the most important thing is you start. And it doesn't have to be the perfect business from day one. Just start something. It doesn't matter what it is. A window cleaning business, a car cleaning business. It doesn't matter. Of course, if you've got an idea in mind, we're going to get into how to make that business work. But I just want you to start. And where only matters if you can move somewhere else.
Because number two on the list that I don't think people realize when it comes to starting a business is where you start it. It can literally make the difference between it succeeding and failing. So, for example, Mark Zuckerberg moved to San Francisco to make Facebook work. If he hadn't done that, it probably wouldn't have worked. Why? Because San Francisco is where all the money, venture capitalist-wise, is. It still is today, as it was when Mark Zuckerberg was building Facebook. It's the place to go to raise money. Now, not every business needs to raise money. But if you're not in the right environment to make your business thrive, it probably won't.
Now, number three, where I actually think Hong Kong is a really interesting market. Again, it depends on what you're trying to do. But if your business is manufacturing, or you're thinking in any way that you want to get into the Asian market, in my opinion, and I spent a couple of decades there, Hong Kong is a great place to go. There's some additional benefits to thinking about where. For example, in Hong Kong, there's no double taxation system. If you make profit in Hong Kong, it's flat 15%. If you then pay yourself that money as a director of the company, you then don't have to pay any additional tax once you've paid the initial company tax. Whereas in markets like the UK, there is a double taxation system, which makes it a lot bloody harder to make money. If you're looking to make a product, you can have an office in Hong Kong from a legal structural point of view. But honestly, I think Shenzhen is a market that nearly nobody in Europe or America seems to know much about. But that's where 90% of the world's patents are. 90%. It's where it gets made. No one's told you this stuff. And I want you to understand that if you want to move there and you've got no money, you could. You know, there's things such as accelerators in markets like Shenzhen. They'll literally pay for you to fly there, stay there, and build your business there because they're looking for the next big thing. You don't need money to go set up in any of the markets I'm talking about. When I moved to Hong Kong, I slept on a friend's couch and I borrowed the money to start my company. San Francisco, I went there with no money. I literally had a friend who was air hostess, she got me a cheap ticket. I went there and pitched my business when I had nothing. So I know when I tell you these "where" locations, you're thinking, "Well, I haven't got the money." Break that fake mindset, that limiting belief system.
Number five on the list of places you should think about. I sometimes think when you're building a business, people aren't thinking enough about lifestyle. Personally, my next company, I'll probably live in LA to make it happen. In fact, I'm working right now to create a TV show that means I will be able to shoot it in LA and live in LA for a little bit of time. I think all of these markets, if you're smart, would be part of your business. So, for example, manufacturing in Shenzhen, your legal structure probably in Hong Kong, your fundraising arm of your business probably in San Francisco. And in this day and age, with all the ability we have to do nearly everything online, there's no reason why you can't be operating in all these markets. I will also say, a lot of people tell me, "It's so expensive to live in London or live in San Francisco or even live in Hong Kong." And yes, these are expensive places to live. But you can live there cheaply. And they're expensive for a reason because it's where the people with money, both clients to spend and people to invest, live. You want to surround yourself by the very things that are going to help you be successful. You've probably all heard, "You're literally a reflection of the six people you hang out with." In my opinion, you're also a reflection of the place that you live in. If you're in a place that doesn't encourage innovation, the people around you don't think that innovation is exciting, to do something cool is interesting, then you won't do it. You'll get some shitty job in a bank and you'll die there.
Number six on the list, I'm going to say places like Dubai, Bali, Thailand. All of these have their different variations of benefits depending on why you might move there. Dubai right now is 0% tax. It's pretty interesting in the web3 space if you're looking to get into that world of blockchain. Bali, lifestyle. It is again, on a nomad visa, zero tax for a short period of time. But outside of the technicalities, it is actually a beautiful place to live and work and great lifestyle businesses are coming out of that part of the world. And then finally, Thailand. I think for manufacturing, it's one of the most underrated locations in the world. Having spent lots of time in China itself, China is pretty hardcore. Whereas Thailand is fun, and you can do some pretty interesting things on the manufacturing side there. So all of these markets, frankly, the whole world is open to you. What I want you not to do is get stuck in the location you were born. War, not going out there in the world and realizing there are so many different ways to build a business. Should start with where should you live? As crazy as it sounds, no one's ever told you that before because I know it to be true. I moved to Hong Kong when I was 23 years old, and I honestly think I wouldn't be a multimillionaire today if I hadn't. That market helped me get rich. And you've got to give yourself the best chance of being rich by being in the right location where the money lives. Where the most expensive places in the world are often where the money is. And the people that buy your products, you need them to have money. The people that are going to invest in your businesses, you need them to have money. The people that are going to work for you, invest with you, you need them to have money. So go where the opportunity is. And I think lifestyle is also something to be completely built into what you do because there is no work-life balance.
Next up, how to formulate an idea into a business model that works. Ideal model. This is actually really complicated to explain, and every time I've ever tried to do this, I don't think I've done it well. So let me know today if you get it. The reason it's difficult is because whoever's watching this right now, you're probably falling into one of two or three categories. You either have an idea and you want me to help you figure out how to execute it, or you don't have an idea and you want my help to figure out an idea that you can execute, or you have an idea and you need me to show you that it's an idea so you can do something good. So how do I tick all three boxes and help you if you fall into any of those categories? I think the first thing I'll say to you is, and this might help you decide if your idea is good or not and avoid me giving you judgment, would be to ask yourself this simple question. In the education system, when you're being educated about life, you're asked this question. You're asked, "What will you do when you grow up?" But the real question that really opens up your mind, the one that doesn't trap you like that question into a job, into a job role, is: What problem do you want to solve when you grow up? So the question I have for you is, what problem does your business idea solve? And I put this under the category of problem-solving equals money. If you can figure out a way to solve problems for people, it equals money.
But more important than that, and this is number two on my ideation of a business, is purpose. Too many people are building businesses today, and they come to me with this pitch. They'll say, "This business, Simon, fills a market gap. It will make us both rich." When they're asking me to invest in their businesses, this is what they say. It is the wrong pitch. It's the wrong way to think about it. If it's filling a market gap, that's an additional bonus. And I'm actually going to put that on the list. It's not about the gap, it's about what's going to drive you to drive through that gap because most people, when they're building a business, they don't have a purpose, and that's why they give up. I've said this before, and I'll say it again: nurses get up every day and go to work in England for 150 years until recently because the government's so... until recently, they've never gone on strike. Why? Because if they don't go to work, someone dies. If they don't go to work, someone's in pain. You need to have that today. If you get up and feel like, "Well, if I do nothing today, it doesn't matter," then you will do nothing. Because humans are inherently lazy. You need a reason. That's why people who open up shops go to work and open up shops. If you give the keys to someone in a business, most of the people have a key to a shop, turn up because you need that sense of responsibility, that accountability. And so the problem you're going to solve is the question you need to tell yourself is the right question, not the one you've been taught since you started school about what you're going to do when you grow up. That doesn't matter. And then ideally, that problem has a purpose. In an ideal world, that matters to you. And then yes, if it happens to fill a market gap, then great.
I started an agency called Fluid when I was 23 years old. It filled no gap. There were already hundreds of people in Asia doing exactly what I was doing. But no one cared about helping people and their businesses work more than I did. Because I was 15 years old when I started a business and I had no help. This video I'm making for you didn't exist. So I knew that there was a gap in the world where people needed help, and I wanted to build an agency. Yes, I charged people back then. I don't charge people now. I charged people back then to help them with their businesses, and I took the profit, and I used to invest that money in helping new companies start. So from the very beginning of starting a company, I had a competitive edge. And there I was in 1997, when Hong Kong was being handed back to the Chinese by the British, when everybody left Hong Kong thinking it was then going to turn into a communist state. I was there helping people start businesses in Hong Kong, get into China, helping China businesses get into Europe and America. And I knew that if I helped people, helped the 15-year-old me, I would get up every day and care about it. And that's what happened. That's how I got rich. Because I had a problem worth solving. There was not enough people doing quality marketing back in those days in 1997. A lot of talented people left as well, which helped me. I had a purpose of helping that 15-year-old me, which happened to be 35-year-old business owners. And then I had a market gap. In the end, I created one. Why? Because in 1997, when I started my first business in Hong Kong, I was thinking about digital. I was thinking about how to help people start digital businesses. Now, that .com came and went, but I pushed through that pain at that time because I knew digital is the future. Just as I know, by the way, that today blockchain is the future. That's another video for another day.
Number four on your ideation and business model is, think to yourself, what would I do for free? What would I do every day for free? Me, right now, sitting in this studio, I'm helping you for free learn marketing, learn business. I would do this all day long. Why would I accumulate all this knowledge and not give it to humanity to help millions of people who can't make ends meet today, make ends meet? And I think that's what drives me. You've got to understand, and this is the word I'm going to use to help you get this: community. Businesses of the future, they're going to do really well if they have a community. That's the competitive advantage. Every new idea going forward will have to beat the big incumbent brands, even people like Google. I say, "Disruptor for Google." How well, if I tell you that by switching to my search engine, you can help the homeless, you can solve some of the world's biggest problems, and all that money won't go to a couple of rich shareholders, you'd probably switch to my search engine, as long as my search engine does as good a job as Google, right? Because people who run communities with a purpose, solving a problem, will win and create a market gap. They'll create what I call blue ocean strategy, a new market, not the red ocean where everybody else is. Blue ocean, a whole new place where you can go that no one else is occupying. And if you get these idea items in line, you can make a fortune.
Now, there's one final thing I'll talk to you about business modeling because I promised you an idea and then I promised you to make money. And I think the best way to demonstrate this is by giving you a billion-dollar idea to wake up your mind and help you realize how this actually all fits together and maybe rethink your existing idea, or your existing idea, help it make it happen, or finally give you an idea. So here's an idea for free. And if it's not a billion-dollar idea, unsubscribe from this channel and never come back here again. All right, here we go. How do you incorporate all of this into something new? What would I do? Have you guys heard of property agents like Savills and Knight Frank and all these guys that sell property? Right, it's a pretty soulless business, property business. And here's what I would do if I was starting a property agency today, which I don't particularly want to do, but this is what I would do, incorporating everything I've just taught you. I would make it that that property agent, every time we sell a property, start a new brand that competes with these guys that actually sell property. But every time we sell property, all the profit from that property sale, which can be huge numbers in America, it's huge numbers in Europe, it's huge numbers in Asia, it's huge numbers, commission payments to people that sell property, I would give all the profit to fund the homeless, to help homeless charities get the funding they need to help the homeless. So now you've turned a property business with no soul into a purpose-driven business. Now, the most important thing in a property industry business like that is supply. The most important thing for agents is they get the listing. I bought a house recently. I don't want to buy a house, but I did because I got a family and I was forced to do it. But I bought a house, and when I bought that house, I only cared about the house I liked. I didn't care who was listing it at the time. So it's not about the agent and their brand like they think it is. It's actually about having the listing. And if I can give the listing to an agent that's going to use the profit from that sale to help the homeless, I will give it to that agent. So you win the supply. And if you win the supply, then you win the client to buy the property, and you get the commission. Of course, you need to sell the property. But that's an example of what I just laid out there. And basically, every business model needs to follow this basic structure: community, purpose, goal-oriented. It's got to matter to you. And then you create a market gap, and money follows a purpose and a problem that you've solved for people.
Next up, the road to monetization. Now, this is also a complicated subject, which I love. Spent so long learning, and I'm excited about sharing with you. But it's not going to be easy. Here we go. Road to making money. Number one on the list: get your costs down. You know, too many people have built up debt. They've been sold by clever marketing companies stuff you don't need. If you've got a brand new car, sell it. Get a three-year-old car. Better still, walk. Get your costs down. The system doesn't want you to get your costs down, but it's actually really simple. The lower your costs, the more freedom you have. Every time you buy that car, think about it. If it's costing you £500 a month, how many hours do you have to give up of your life each month for that shitty car? Don't do it. Get your costs down. And I don't care what business it is. Again, I built Help Bank from scratch. It's now worth millions. I did it by getting my costs down. I have a house, but I have no mortgage. I have a car, but I have no car loan. Even my car, which is a Tesla, is on a solar panel charging system. Every time I buy something, I think, "Okay, is it an investment in getting my costs down?" If it is, I buy it. If it isn't, I don't. The same principle applies when starting your business. So, for example, you might say, "I need to hire someone to help me do the app." Well, do what I did. Bring someone in as a partner. Make them an equity owner in the company. Get your costs down. Now, some people say, "Well, developers won't do it unless you pay them money." Well, your idea isn't exciting them enough. It doesn't have what I just told you: community or purpose. You don't have the people that care about that purpose in the company. You've not spoken to the right people. Every single thing that makes a business work starts when you start the business. If you get it wrong at the beginning, it's like a foundation of the house. It will all crash. It's actually really good to test whether people care about the purpose they're about to step into. If you just hire someone and pay them money, they'll come and work for you. But if you tell them they have to invest in the business or they have to be an equity shareholder in the business to actually be a part of it, you'll find out whether they really care about your purpose or not. And then you have a team, an army that actually cares about what you care about, not just a bunch of people paid because you did that, gave them what they needed. That's it. Again, I have applied these principles. These aren't things I'm telling you to do and not doing myself. I've built a $3 million company in a year, and I've done it before and again and again. I can do it because I know the things I'm teaching you now.
Now, I know getting your costs down isn't easy. Maybe you've got an expensive partner. Get rid of them. Maybe you've got an expensive dog. Me too. At the end of the day, there are some things you just can't get rid of. I totally understand. But the bottom line is, joking aside, please work on getting your costs down. Do not buy what you don't need. I sometimes say that I was lucky that I got kicked out of home at 15 years old because I lived on the street. It taught me how low cost-wise you can live. And of course, I can't sign up some BT internet thing and some Netflix. All of this stuff does drag you down. But I know what I'm saying to you is not easy. That's the point. If you do the hard thing now, your life will get easier over time. If you do the easy thing now, your life will get harder over time. Yes, live with your parents if you can. I would if I could have done. Go do what I did. I lived in my office, and my office was on barter. Get your costs down in every regard. I've got the money today to fully fund what I'm building, and I still act poor. My team, who are all listening now, will tell you I spend every single day talking about how to manage our costs, even though we could spend a lot of money. I've got the money in the bank to do it. I still don't do it. I still don't do it because I know how dangerous it is to think you've got a lot of money. You waste a lot of money and you don't hustle. I know that's become a negative word, but it shouldn't. I think it's healthy to hustle when you're young. If you don't have kids, yes, live on a sofa. If you don't have kids, yes, travel where the opportunity is. At the end of the day, if you're at that stage in life where you don't have huge responsibilities for others, it's the time to get your costs down. And even if you are married and you've got kids, the kids will do what you do, not what you say. So make sure you're doing something you love because they will see you doing something you don't love, spending lots of money to try and make up for it, and they'll copy you later.
The second step on the road to making money from your idea: You don't have to make the money from your idea. So when I first started Fluid, one of the things that was really fascinating for me in that business was I initially worked for someone for free. Now, a lot of people tell you, "Don't do free work because people don't value it." This wasn't true in my case. In fact, this particular client ended up being my client for 16 years, recommending me probably to hundreds of people. And for 16 years after I did the free bit of work for them, they gave me business every month. So I'm not saying you should do anything for free. But what I am saying is, have this mindset: your idea initially doesn't need to make money. Make no money. Now, bear with me for a second as I try to explain this. I told you this isn't easy to explain. When you're building a business, most people have, let's say, a service, and you think, "I know, I'll charge for that service and I'll make money." But what if you give that service away? I'll give you an example of something I did recently to help someone. Someone in America wanted to start a hairdresser's, and they didn't know how much to charge. So I said to them, "Charge nothing. And at the end of the haircut, just put a bowl out and say to people, 'Pay what you think it's worth.'" They earned more money than they ever thought was possible by doing it that way. Sometimes, if you think about offering a service for free, there is an argument that some people don't value it. But there's also an argument that people you want as clients will value it. So sometimes it's an interesting moral code test.
Now, I mentioned just a moment ago that my first big client at Fluid, I helped them for free. But beyond that, and this is where it gets really interesting. If you're starting a business, let's call it a big tech business. Let's use maybe Airbnb as an example. So you're going to build Airbnb, right? You know what they did at first? They first of all gave their spare room to a couple of tech bros to help them build the platform. So they gave accommodation for free, in an ironic twist, to help the people they needed to stay somewhere in San Francisco have somewhere to stay so they could then help them build Airbnb. Then what did they do? And this is all because they had no money, which is brilliant about having no money when you start a business. Then they said, "Right, who are the people that are going to use Airbnb when it's built?" People at conventions, people at that time who were going to the Obama rallies and the McCain political rallies. So what did they decide to do? They went and packaged up cereal boxes called Obama O's and McCain Snacks, and they sold these cereal boxes to people at the conferences for a laugh, for some profit. And then they used that profit and that insight into the people they were selling to, because they were eventually going to be their clients. They used that money to build Airbnb. Now, eventually, and I'm going to come to it in a minute, they did have to raise money. And how to raise money, I've talked about this before, but I'm going to go into it again. At the end of the day, sometimes your actual idea, let's call it Airbnb, isn't where you start monetization. So if you have a big ambitious business, believe it or not, I don't care what it is, you could probably clean some cars and make some money. You can clean some windows and make some money. You can clean people's swimming pools and make some money. Maybe the people whose swimming pools you're cleaning are actually the people who could invest in your business, and you found a way into your investors by cleaning their swimming pool. I know it sounds crazy, but this is literally how you rewire your brain to realize no matter what, you're going to make this business work. And maybe just learn this concept that you don't have to make money from your idea from day one. Think how you can make money elsewhere. Service businesses are brilliant for this because service businesses, you can charge, for example, copywriting, and charge 50% in advance. I know AI is going to take that job eventually, but right now, there's a lot of things that you can do to get your business up and out there. There's a lot of ways you can get people into your business without there being huge costs. And making no money from your idea is a pretty interesting concept that I want to teach you.
Next, what I would do, and I touched on this a little bit a minute ago, but one of the things I discovered is when hiring people, sometimes the best thing you can do is get them to invest in the business with you. So Callum, who helps me with these videos, he invested in Help Bank. He's become a very rich man because he's done that. But he invested in it when it wasn't worth anything. Because at the end of the day, I knew he was talented, and I knew I could have paid him full whack. But I wanted to see if he cared about the purpose as much as I do. See if he actually wants to fix the education system and help people break free from modern-day slavery of not doing what they love. Does he really care about that? And you know what? He put all his life savings into the business, and he put all of his time into the business. Now, he does get a small salary, but I'm telling you right now, he could earn a lot more than he does when he was first started working with me. And I want you to understand this step that you can take: the people that come into your company can invest in it, and that can be your road to making money in your business. Because if they invest, it gives you a runway, right? So get your team to invest. I now have 12 people helping me full-time with this content and Help Bank. 12 people. All of them, in some way, have invested to show they care about the purpose and the problem, to show that they actually are committed to the process. But also for me to give them something back: equity in the business. The only thing I think that actually has any value. Because a salary is a drug. It's not value. It's not real value. It just pays the bills. It's not scalable to sell time. The only way to scale is buy time, not sell time. And in my opinion, the best way to do that is own equity where you work. So it's a transaction between the two of us to validate the partnership as well.
Number four. Now, a bit later in the video, I'm going to get into talking about, like I said earlier, the boring stuff like NDAs and legal contracts and structure. This is important stuff. I'm going to get into it at the end, but I know a lot of you will get bored of it, so I put it at the end. But I think that this point is, in a way, touching on that. When you're trying to make a company work, what you've got to understand is it's not a one-person army that makes a company work, right? What you've got to think about, look at your competitors and think to yourself, "Can I work with them?" I know it sounds crazy. It's counterintuitive to everything you've probably been taught, but it's absolutely true that nearly all of the businesses I've made work, at some point, I end up partnering with my competitor. So at Fluid, my competitor was Ogilvy and Leo Burnett. Ogilvy actually asked me to take what they had as a conflict client off their hands. In other words, they had a client they couldn't handle, and they passed it to me. And the only reason they passed it to me was because I made a relationship with the CEO. I became friends with them. I didn't see them as competitors. I saw them as comrades. Everybody else saw them as competitors. It's a mistake to think that way, especially if they're solving a big problem that you care about too.
Now, Elon Musk, when he saw he was doing X, way before it was called Twitter, and he started a business that was exactly the same as PayPal, but he looked at what Reed Hoffman and Peter Thiel and the PayPal Mafia were doing at PayPal, and he joined them. He closed down his company and he joined them because one plus one equals eleven. I've said this in other videos, and I know you might have heard this before from me, but it's just such a fundamental thing that no business school teaches, that no entrepreneurs seem to share. It's so crucial to my success, and I want you to know it's important to yours too. If you want to make a business work, you're going to be shocked to find out that your competitors are probably the company to unlock it. When I sold Fluid to Price Waterhouse Cooper, the opening negotiation with me was, "They're going to do what Fluid's going to do. So either buy us or they compete with us." Now, that was a scary intro to a potential partnership, right? But the truth is, it's better for them to partner with us because they remove a competitor from the market. And it's better for us to partner with them because one, I personally made a lot of money out of it, which is one definitely good reason to partner up. But the other reason is they had global offices at that time. I only had three offices. They have 50. So they can expand it in a way that we can't. But we have the case studies and the history. It would take them years to get up to the same standard that we were at in that particular sector. Right, they're a world-class company. In case they're listening, they're a world-class company in their field. But in the creative industry, which I was in, they were just a baby. So to buy us, they save time. So I want you to see this, and I want you to understand that if you learn this 1+1=11 mythology, you can get successful quicker, and you can make money quicker. Because I can spend a decade promoting Fluid to get the client that Ogilvy gave me in one phone call, in one simple, kind gesture. If Olav recommended my company, I got all the halo effect of that company's respect as a brand, right?
So that takes me on to point five, which actually is similar to point four, but there's a nuance I want to make sure I get across to you. Your road to making money, obviously, you need clients. But I don't think people think enough about getting partner clients. So I have opened up offices for my businesses based on my client wanting us to be in that market. So you might think you have to go and open up an office and set it all up and then pitch to get clients. The truth is, you can expand with a client. I don't think people think about this enough. If your client is your partner, if you're doing a good job for your clients, whoever they are, they will fund your expansion. Now, this can be a community that funds your expansion, or this can be an individual brand or partner. But people don't know this. I just literally interviewed someone that done four years business school, and they don't know this concept. Partnering up with your client. To most people, it sounds dangerous. And there is one pitfall to it. If, for example, you're a software development agency and you work with banks, and you get one client as your investor or your partner, the other banks might be pissed off, right? So you have got to be careful. But that being said, you can have sector-specific partnerships that mean, yes, the bank can have six months exclusive if they invest in you. That's perfectly normal. I have had arrangements with partners in the past where they are my exclusive partner for six months because they invested in me to open up in another market. That's what you can leverage, right? Why not? They're going to fund your opening of an office. Why not be exclusive to them for six months? It's not a big deal. Just put those restrictions in.
Now, I'm going to talk about some legal stuff in a minute because you are going to need to know that stuff to make all of this work. But the final thing I'm going to say on the road to making money: the road to making money requires you to say no. Too many people, especially when they're building a business, will accept every client that comes. What you need to do is learn to say no, but in a polite way. There's a couple of ways to say no, and be sure that you should be saying no. First is, set very clear payment terms. Most businesses fail because of cash flow problems, not because of sales problems. Make sure that you get decent terms. Now, initially, when you're hearing this, if you're a new business, you might be like, "Well, that client dictates the payment terms." No, you dictate the payment terms. Be wrong. I'd rather you stay small with a proper cash flow business that isn't going to get into trouble than grow too big and have a cash flow problem that brings you down. Grow slow. If you go up too quick, you come down quick, right? Build a cash flow business where you can trust the person's going to pay you. Do tight credit terms, for example, no more than 15 days, and a 50% deposit on signing of any agreement. But also saying no in everything I've mentioned here: no to the wrong staff, no to the wrong partners, no to the wrong clients. Saying no is one of the most important skills you can learn in business. Because when you're building something, and you're watching this video because you want to build something, or you're trying to build something, we all will say yes to try and make it work. The hardest thing is to say no. Learn to say no. Make sure you shut out the people that could eventually destroy your business. I have a really good friend who's built an incredible business. He got the wrong investor in. He's an investor that no one else likes. And now, later investors, the big boys, will not get involved in this company because he brought the wrong investors on board. And it annoys me because I should have told him, like I'm telling you, don't get the wrong people involved in your business. Say no, especially at the beginning. It's the foundation of your business. If you say yes to the wrong person, it will all get up.
Next up, a subject I like: selling a company and raising money. Now, I have tried to talk about raising money before, and I have been criticized for not giving enough detail. It is a freaking complicated subject. I'm going to try and help you get the basics and go as deep as I can without losing you. So, ironically, raising money and selling a company are really interlaced. Okay, so selling and raising, I'm going to put these two things into two separate categories for you, but they're linked. So I wanted to put them together. Right, to sell a company, what's the number one rule? To sell a company, the number one rule is: do not want to sell your company. To sell a company, if you build a business you love, then you'll negotiate better. I didn't want to sell Fluid to Price Waterhouse Cooper. I didn't need to sell Fluid to Price Waterhouse Cooper. I was in the negotiating position I wanted to be in. I wasn't even running it when they came and offered to buy it, which is even better. So I'm not having to run it. I'm getting paid from that business every month, and I was leveraging it for the investments I was making in other businesses. So why would I sell it? So don't want to sell it. Now, I know it's a hard mindset, but if you start off a business based on the things I've just told you earlier, you shouldn't want to sell it anyway. And that's when you'll get offered the most amount of money for it. Don't want to sell it. But I am going to teach you how to sell it, but I want you to get in the right frame of mind. Right, don't want to sell it.
Equally, number one on raising money: if you want to raise money, don't ask people for money. Don't ask for money. The golden rule is: don't ask for money, ask for advice. If you ask for money, you'll get advice. If you ask for advice, you'll get money. Most people want to feel valued. I don't care where they are in the food chain. When it comes to raising money, you need to make people feel valued. Now, ideally, and this is number two on raising, do due diligence on people. Again, like I said earlier about saying no, make sure you're asking the right people to get involved in your business. Make sure you've made that list of questions I told you earlier, and you're asking people the questions you need to ask them to make sure they're the right person for you. When it comes to raising money, the biggest mistake people make is getting the wrong investors on board. Do your due diligence. It's human psychology. If you ask people for money, their default is to deflect from that and give you advice. It's just human instinct. But equally, if you ask someone for advice, and you listen, and they like you, they feel listened to, like you're able to learn, which is an important reason people invest in business. It's the reason I invest in businesses. I invest in someone who I think will adapt and learn, right? Don't want to work with people who are stubborn. Don't want to work with people who won't absorb my knowledge. What's the point of me having all this business knowledge and just giving you money if I don't feel like I bring my business knowledge to the table? I've got no competitive advantage, right? So you need to make the person feel like the investor feel like they're bringing their competitive advantage to the table with you, right? You need to really think this clearly through. And so many people don't. They dive straight in there with, they watch Dragon's Den way too many times. They're like, "How about 50,000 pounds for 10% of the business?" I mean, Dragon's Den is such a bad way of learning business. I know a lot of people learn business from shows like Shark Tank. Dragon's Den is such a bad way to learn because it's the last thing you should ever talk about. In fact, you want them to ask, "Well, look, I love your business. I think I can add value. How much do you want?" You don't even want to say it. The best pitches I've ever seen in business are people just telling you what they're doing and what their plan is and how I can add value to them. That's it. There's no talk of money, right? Because the three steps to any sale is: I like you and you like me. I need you, you need me. And then the third step, once those two things are established, I like you and you like me, I need you and you need me, then the first step always happens. The deal terms always get worked out. But people don't spend enough time on this. They're too busy just asking for money. Don't be dumb.
Now, when it comes to selling a business, one thing I did when I first started Fluid is I wrote down all the companies I want to work with. But I also wrote down all the companies I think one day I could merge with, I could buy, I could collaborate with. And I also made sure that those companies were on my mailing list, were involved in my marketing, so saw what I did. In fact, for one particular company who I was targeting, I did an ad campaign around their office. I took a billboard around their office because I knew one day they'd want to work with us. And when they walked outside and saw our billboard, they'd be like, "Wow, that company is serious." I just did one billboard outside their office. They didn't know that. They thought I did a billboard campaign all across the city. Point is, get in front of the people you want to sell to. Make sure they notice you. Make sure the people that you're trying to sell to notice you, right? And it might, I mean, in Fluid's case, 16 years from the time I started it to the time I sold it. I didn't want to sell it even then. But the point is, everybody who could buy me, everybody that I could buy, they knew me. I targeted them, just as I did my clients. Again, selling and raising are linked. So I'm now going to jump back to raising because there's links to this. These people that could buy your company, that could be a partner with you, they're also potentially your investors. Over the years, of all the companies I've built, a lot of the clients I've been working with offered to invest. Equally, a lot of my competitors offered to buy. So if you look at history, it'll always tell you the future. You look at the history of Tesla. A lot of car companies actually invested in Tesla. Some famous people sat on the board and then went away and did their own thing.
own electric car companies, right? So there's all sorts of reasons why people do this. And I'm going to go into the legal stuff you need to do later to protect you from that sort of issue.
But the point I'm trying to make here is on the raise side. Also, connect in every way you can to companies that could invest in you, could acquire you. Some of the best businesses raise money from people who will eventually buy them. I mean, Microsoft has just invested in OpenAI. That's the beginning of a purchase, right? And there's also, you know, from OpenAI's point of view, a partner and a client. So I'm teaching you here is being done in the real world at billion-dollar level scales. It's obvious stuff to me. I just want to make sure you know it because I don't know if it's obvious to you.
Number three on the sales side. When it comes to selling a business, one of the most undersold ways of selling a business is a management buyout. I have actually done this a few times. I've let my team buy the company. I actually think this is a really exciting way of also building a company. It's one more option for the people that are working with you to own where they work, which I think is crucial in life. So think about your team and think about bringing in people that can eventually potentially buy your business.
So in my previous companies, I brought in very high-profile people who worked in the business, but I knew they had the capability of raising the money to go and buy the whole business, and that's what they've done. And I want you to know this concept. And again, team also links to raising money. On if you have the right team, most of the time raising money comes down to who's in your company. Most people who are successful in raising money is because they already knew the people they raised money from before, or people in their company knew people that raised money from from before. So hiring the 13,000 people that got laid off at Airbnb, there'll be people in there that are probably in the early days of Airbnb there for the fundraise, and I guarantee you that the investment firms know them. That's much better than the cold email from you. So finding team members to help you raise money is a really powerful thing that not many people think about. Hiring the right people so you can raise the money is something I've just done at Help Bank. I just brought someone on board who I know because they now part of our team adds further credibility to what I'm doing, will probably make it easier if we need to raise money later. I'm not sure if we will to need to, but the point is it's a very useful tool to have people on board who can help you do that if you need it.
Number four on the list when selling a company is maybe look to buy the company that could buy you. Small fish eats big fish, I guess, is a strategy. Um, and I've seen this play out in interesting ways. Now, there's a slight danger to it. Do not approach a company to buy them unless you're serious about potentially buying them because you'll hurt your brand. It's morally wrong. But I think that, um, and I've seen it play. I've invested in a lot of businesses, and the 78 companies I've invested in, four of them actually got an exit by doing this. They looked at a company they were going to buy, and that company ended up buying them. But I also think it's a great way to grow a business if you can buy a company that's bigger than you, that maybe doesn't have the same energy as you, doesn't have the same mission as you anymore. They lost their way, they've lost their so it can be quite interesting to buy a company in this way. But I'm assuming you're a small fish buying a big fish. Of course, if you're a big fish, they do that all day long. Google survived today, the big companies like Amazon survived today because they keep eating up the companies that could eat them. These little companies could eat them. They know what happened in the past. You know, Google at Yellow Pages, Netflix at Blockbusters. At one point, they were the small fish, and they were the big fish, and now they know they better eat up the small fish to stop them becoming the big fish that eats them. But it is interesting to think about, you know, small fish buys big fish.
Now, you perhaps see why selling a company and raising money for a company are interlinked. Of course, your cap table, the shareholders in your business, will also affect whether or not someone buys you or not. I've seen it play out time and time again where a company will not buy a company, well, you can't even list your company because you've got the wrong shareholders in the early days that haven't done their accounts right, for example, or aren't following ethics that match with your client's needs and expectations. So make sure you follow your ethics. Make sure you're very clear on what your moral code is, and don't let anybody into your business that isn't right, either on the buy side or on the investor side.
Okay, next up is legal and accounts. Now, I think it's important in business to, especially if you're giving advice, to know what you're good at and know what you're not good at. I would say that legal accounts, something I've been involved in for 35 years, is not something I'm brilliant at. So what I've asked is the best accountant I know, the best legal advisor I know, the best trademark lawyer I know, to actually put a document together down below in the comments, giving you all the information you need to know. Please don't be lazy, go read that stuff, understand the fundamental importance of this stuff. But I'm going to give you a couple of quick pointers before you have to go and read that stuff.
Right, the first thing I'll say for things like NDAs. NDAs is a non-disclosure agreement. You're going to need things like this to protect you from bad players, people that might steal your idea. That's one type of NDA, or people that might go and share your private information about your business. If you pitched it to them, they could steal it. I'm going to say something to you now that's kind of counterintuitive to the documents that you're going to read down below, and this is more like experience on top of legal. My lawyer is my lawyer because he said something that I believe is so true. He said, "Paper will always accept ink." What that means is, if someone wants to rip you off, they will. If people want to steal your idea, they will. How do you make sure, for example, that someone doesn't steal your idea? Execute the idea. Go fast. Build. Do everything I've just told you to do. An NDA sometimes can cause offense to some people. I don't sign NDAs myself because you either trust me or you don't. You've done your due diligence on me, as I told you earlier in this video, or you haven't. You know what I'm like, or you don't know what I'm like. You don't let me in if I'm not the right person. You say, "No, you're not doing due diligence if you're thinking about doing an NDA." And at the end of the day, all of this legal paperwork, there is an element of take it with a pinch of salt. Do it to dot the eyes and cross the tees. You should do it. Listen to the people I've lined up that have a lot of experience who put the documents down below together for you for free.
Point I'm trying to make here is an NDA is one example, and you're going to need structure to protect you, but use your common sense. Be careful. And if you're going to share an idea with someone, go for it. Make sure you're ready to execute it so they can't catch you up, even if they copy it. That's the best sort of defense you ever going to have is executing better than them.
Number two, accounts. Please get this stuff right. Register your company properly. Make sure you follow all the rules each year. I know the system wants to trip people up when it comes to business, but please, please, please follow it. Do the paperwork correctly because if you don't do shareholders' agreements correctly, if you don't do accounts correctly, then you won't get investors later. You won't be able to sell your company easier later. Just do it properly. Get into a habit. Accounts is just a habit, right? I can talk to the emotional side of accounts, the physical side of accounts, the document down below, but the emotional side is every single day, take 10 minutes out to collect your receipts and do things properly. Do not muck around with this stuff. Get it right. Take it seriously.
Now, maybe you're an accountant hearing me say this and you're like, "Yes, don't worry, something I'm taking it seriously." But I bet a lot of people that are watching this content on YouTube don't take it seriously enough. I made the mistake of not taking it seriously in the olden days, back before the war, and I'm telling you right now that that stuff messed me up. So get it right. And the document down below are put together with the best in class to help you do it. Focus on your accounts.
Number three, I'm going to say this to you, this final thing. If you speak to a lawyer, they're going to tell you to paint in this and do that and do this, do all these things to protect you, and you should definitely think about all of these things. There's only there's only really one thing that I genuinely believe you need to make sure you do from all this legal stuff, and that's get your trademark. Now, I don't own a trademark company, and my trademark lawyer gets more work from me than anybody else in the whole of the UK. His last words to me, "I am his number one client because I know that is a critical point of failure for your business." If you don't do it right, you may have come up with a name sitting around a table and you love it, you might think it's the best name in the world. Someone else owns it. You are go trademark your company. It doesn't cost a lot of money. If you don't use a trademark lawyer, it costs about £300 to go register it on a trademark registration in the UK. In the US, it's similar. It's all open. The government systems are run by government, so they're useless. But when it comes to those sorts of things, they actually do it quite well. Most countries go online, trademark your company name, ideal in every market you're operating in. But to keep costs down, at least in the market where you're accepting the money, get your trademark. Do not risk this. This is the one thing in legal I don't muck around with. If I start a business, I own the trademark, then I can launch, and no one can take your business from you. But if you don't get the trademark, someone else has it, they can do something called passing off. Your business will have to shut down. You'll have to pass all previous profit and income to that brand owner. Do not muck around with this stuff. Get it right.
Documents are down below. Good luck, folks. I'm going to go eat some chicken now. I'm bloody hungry. I hope you enjoyed this video.