Transcription
I just happen to own the trademark for lipstick. The baiffs arrived from customers in excise to take away office furniture. You have to make those difficult decisions if you want to survive. How would you like me to introduce you? People know me by Tuka. I was going to go a bit further than that and say one of the UK's finest entrepreneurs, uh, and the owner of Halls and Curtis, Ghost, and investor. Would you like me to put a number on how many businesses you invested in? I, 30.
Hello and welcome to How to Make a Billion in Nine Steps with Richard Harpin, in which we look at how to build a successful business. I'm Graeme Rodick, and I'm absolutely thrilled to be joined by Richard and also by Tuka, who is one of the leading entrepreneurs in the UK. Tuka, it is absolutely privileged to have you here. Tuka is the owner of Ghost. He's the owner of Horses and Curtis and is also the an investor in more than 30 businesses. Uh, since 2015, I believe you've been a dragon on Dragon's Den. Hello, Richard, Tuka. Hello.
Today we're going to look at three of the steps to building a billion-pound business. We're looking at copy and pivot. We're looking at get an investor and we're looking at get some coachment. So, Richard, I guess the first place to start will be copy and pivot. So, for the audience, could you give a quick summary of what you mean by copy and pivot?
We're, uh, we're taught at school, aren't we, that copying homework is bad, but actually in business, I think it's really good. And have you heard people talk about, uh, oh, uh, I would have launched X business, but somebody'd already done it. And I would say to them, well, that's great. It proves that it works and there's room for two or three businesses in in any market. So I think that's a, a really good thing.
In, um, the book you talk about multiple examples where you and Homeserve copy and pivoted. Is there one of those stories that particularly stands out in your mind?
Yeah, it's got to be around fast fix to Home Serve. So, I'd set up an emergency plumbing business, uh, generating work through Yellow Pages. In fact, I called it A1 FastFix to be at the front of the section for plumbing and heating. Put my life savings into it with a business partner, £50,000. And literally, we saw our money go down the drain in the space of six months. The business model wasn't right. And it took a, uh, a pivot to, um, uh, then copy from somebody else, which is a water company in Sutton in, um, Surrey, and they developed a plumbing insurance model. I remember going down there, looking at their model, interviewing some of the customers, and saying, uh, that's the one we need to copy. It covered the underground water pipe in people's gardens. Uh, we added in plumbing cover and drainage cover, and literally, with the last £10,000 in the business, uh, we proved out the model through direct mail. So, it was not me that invented plumbing insurance cover. It was copied. But then when you've copied, go for it in a big way.
Tuka, I want to quote yourself at you at this point. This, this is a quote from you. It was, all you've got to do is take a product, look at it, and make it better. Change it. Take an off-the-shelf product and adapt it. It's as simple as that. Is that the key to building a business?
If you'd asked me that question 20 years ago, I would have said you could still do it, but we didn't have the internet then. Today, you can go on the internet, you can cross-check all products, services, look at where they come from, what they sell for, how many they sell, and say, "What is it about that product that sells it, and how can I make it better, more sustainable, more adaptable?" So, one of my sayings is, you don't have to be a genius or a scientist, you know, you've just got to be practical. And I think copying, as Richard just said, is not a bad word. It's, um, what's the word? It's, I, I would call it disrupting because I think if you want to be successful, a lot of the big sleeping giants, the big corporations, for them to change something takes years. And if you're starting a new business, that you can be agile, you can change things much quicker. You can copy things much quicker. And you look back now and say, I wish you and I had both been setting up businesses in a digital age because you can put up a Shopify website within 24 hours and test stuff really quickly. Yeah. I remember the days when, you know, um, when mobile first came out on the car and you had to ring up an operator to be put through a big chunky phone. But I think we live in a different age now. I think there are, I wouldn't say easy ways to make money, but I think we're allowed to disrupt, we're allowed to copy, we're allowed to innovate, and using new technology as it comes to the market and adapting that to existing products, that's the future.
And you use the example, Tuka, of the, um, the big chunky car phone. Yeah. And, um, I think a good analogy of, um, of copying and second mover advantage, which I'm a big believer in, is, um, Steve Jobs. He didn't invent the mobile phone, did he? But he, um, he pivoted from the iPod to produce the, uh, the best phone ever. Yeah. It was Motorola and Nokia and Ericsson. It was the Scandinavian companies that really were the front, uh, runners in the mobile world in the early stages.
Do you think this whole, this idea actually holds budding entrepreneurs back, that they think they've got to invent something new and, and they're wary of copying?
Look, there are different types of entrepreneurs. There are entrepreneurs who are what I call tech geniuses, you know, and that world is solving a problem with tech, and, and that is a separate type of business that is, uh, a risk. However, very rewarding if you get it right. Um, and there is, there's that, there is products, there's services, um, and, and in a way, if you take one of my businesses, and Curtis, I mean, we've grown that business in suits on the basis of our service. How do you walk into one of our stores and get a suit fitted to fit you like a, like a tailor-made suit, you know, and to give the service to your customer that where they feel that, that they've got a custom-made suit. That's a service. Whereas if you go into other retailers, they'll sell you a suit off the rail. There'll be no customer service and no backup. And that's the difference.
This copy and pivot bit, is it sort of the, where the entrepreneur is at their best, don't you think? The founder and copy pivot, test, learn, prove out the model. And I think what I, um, what I didn't do was stay small until I'd proved out the magic model, Home Serve. Yeah. And grew a loss-making emergency plumbing service, uh, too big before I'd got that magic model.
Well, I think what you've got to be careful of when you want to grow a business is overtrading. You know, you can have an amazing business and you're expanding, but if you run out of cash and you haven't got your working capital sorted, you can go bust. You know, it's, there are successful businesses that go bust because they run out of money.
I'll give you an example. Um, in my archives of, um, brands and businesses. Um, I just happen to own the trademark for lipstick and I've had it for 30 odd years. Never thought of doing anything with it. Now I'm about to disrupt the lipstick market, but on retail. So, we're opening the first store, probably before Christmas, where one store only catering for lipstick products, which will disrupt the big brands, and the brand's called Lipstick. So, we'll have lip balm, lipstick, lip gloss, lip liners, all to do with lipstick, lip care, and they'll be 500 square feet approximately and high margin, and we'll disrupt the market. So, you'll buy one lipstick for £12, two for £15.
And have you copying anybody there?
I'm a great admirer of the, um, Charlotte Tilbury. I am copying everybody. I won't mention any names, but I'm starting not down here, but I'm starting up there with the ingredients and, and, and there, what I'm doing is starting up there. Best ingredients, branding, packaging, shop design. Um, and, and by the way, shop design. You put, you put something to ChatGPT about sort of design you want, and they'll design a shop for you, you know. So, that's a disruptor. So, I intend to disrupt the lipstick market. Um, open the first store this, if it works, we'll open 10 more, 20 more. I've already had approaches for two businesses that for 100 units in the Middle East franchise on it, if it works, you know.
The second one that I'm launching, again, with my 50 years of experience, is I'm going to disrupt the jewelry business, costume jewelry, you know, for little girls, £6. Similar project, 500 square feet. Um, it's called Tashola because my daughter's called Tasha. And again, it's learning what I've learned for 50 years and saying, right, product. It's off the shelf. Doesn't need a lot of designing. It doesn't go out of fashion. It's one size. It's, um, uh, 500 square feet. Rents pretty predictable. Two and a half staff. Margins are 80, 90%. Net margins about 30%. Wow.
I've just had a flashback to, um, I ran a, I've just remembered a high fashion earring business. Y. And that was another pivot. I was selling, um, colorful fishing flies for, um, fly fishermen at the National Game Fair. Along came all the wives and girlfriends and sisters of all these fishermen and said, "Those flies would make really nice earrings." So, off with the end of the hook, on with kidney wires. And, um, I was going to call these earrings danglers. And, um, somebody said, "You can't call them danglers, Richard. That infers something unseemly, inorganic." And I suggest that you call them hookers. I had a hundred pounds marketing budget. This was age 16. Hookers set to hit UK high streets and, uh, big craze. It lasted nine months selling these earrings to, um, teenage girls, and then the business died. So, hopefully, you'll have more luck with your, um, costume jewelry business.
Costume jewelry, um, is proven. Can I fit the question on copy and pivot slightly? You've both been involved in established businesses. How do you stop someone copying and pivoting you and disrupting you?
A lot of the American water utilities copied the, the Home Serve model from the UK. And people said, "Did that really upset you?" Said, "No, actually, quite the reverse because they never did it quite as well as us, and we'd let them grow their home services business, and when it got to a certain size, we'd go and make them an offer." So, they were growing our future acquisitions, and then we could show that we could, um, run it better, better customer service, and we probably bought about 50, uh, home assistance policy businesses. Every one of those worked. We got a good return. We wouldn't have been able to do that if they hadn't copied our model. Yeah.
But, but, but I also think competition is good because it keeps you on your toes. Um, and, and we, we are, we are in a society, if you think about it, look at supplements. My, my dear, I have a good friend who is the number one supplement company in the UK, and they're under pressure. A lot of small startups are going into supplements, and there's a lot of competition, and, and unless that they realize how, how can they move forward, how can they, um, uh, generate new, new ideas, new products, new innovation, and, and that's what it does. Competition just keeps you on your toes.
And where's the balance then between we want to see a few companies to prove that there is a market there versus the, the market saturated and there's not an opportunity?
Do you think there's always an opportunity? Because within a saturated market, there is the market leader, and, and if you look at what the market leader is doing, uh, and it could be that their product has been around longer, they're well known. It could be that their product's superior, whatever. But whatever it is, you cannot go and try and build a brand. What you've got to say to yourself is, how can I disrupt that market? Or, I guess, go and buy those small supplement companies. Yes. A buy and build type model.
Well, I think the problem today is, I think some of the valuation is just crazy on some of these smaller businesses. Um, but I think a lot of businesses that started up after COVID, where was, which was the, um, the mothers, the daughters, the sisters, the grandmas, all started these businesses. The guys are all in a position now where it's not sustainable anymore because they started it with being an online business, doing business online. It's become much more expensive, and they're all setting up. And now is a good time if you decide that you want to grow a certain sector, um, then I think you can buy lots of small businesses. Um, you know, one of my businesses, Matchick Monkey, which is a baby business. We've had two approaches in the last two weeks from people who are only growing companies within the baby world.
The second thing we wanted to talk about is investment and getting an investor. What's interesting about this step to building a billion-pound business is how it's not just about getting investment, it's about getting it at the right time and getting it with the right personal investor. What are your thoughts, Richard?
I did it all wrong. So, don't, uh, nobody that's listening, um, follow me because, uh, I look for an investor when we'd run out of money. So, we're growing this emergency plumbing business. Uh, the £50,000 of life savings had run out, and the baiffs arrived from customs, customers, and excise to take away our office furniture, and realized that, um, got to find a way through. Borrowed money from friends and family and did get through that. But, um, uh, we then went out to every water company in the country to say, we've got this great plumbing business in Newcastle. Do you want to invest? They all said no. With one small exception, a little water company north of Birmingham, South Staffs, and they said, "Oh, we've been looking at a plumbing service. We'll put in half a million pounds, but we want 52% of the business." Wow. And did we have a choice? No. We grabbed the half a million pounds, but, um, uh, then used that to eventually find the right business model. But, um, you need to be, uh, raising money at the right time, where you've got a position of strength, and not when you've, uh, got the wrong business model or, um, run out of money.
And I think too many entrepreneurs will go out and raise money. And the more money they raise, the more risk they'll take, the bigger the business will become. But if they haven't proved the model, then ideally, just use your own money. Keep it really, really small. And I think when you've proved the model, you know it's going to work, and then you want to go big, you want to hire some great people in to help you to, um, grow the business, that's the time to get an investor. And then the key is who, because then it's not just about the money, it's finding the right cultural fit, who can help you. Ideally, that's somebody that's done it before, but, uh, it's got to be the right cultural fit, somebody that you could be working with for four or five years. And if, if they're not a good match, then don't take the money.
Going back to how to build a billion-pound business, in my, in my view, um, I, I always said this, if you play with pennies, you make pennies. You play with pounds, you make pounds. You play with hundreds of pounds, you make. So, I think if you want to make a billion, ask yourself or look at all the billionaires and say, how have they made their money? What industries have really made their money? We know that tech has played a very big part in the last 10, 15 years. We know property has played a big part, transport, whether it's ship owners, um, whether it's, uh, techn, we said technology, whether it's big conglomerates in pharmaceuticals, new inventions, you know. So, so, so if you want to be in what I call the unicorn billion, you've got to decide which industry and say, will that industry allow me to be a billionaire? If you're going to be a market store holder, you're not going to be a billionaire. And if you, if you get there, then it's pretty rare, isn't it, to own 100% of the shares? So, worth giving something away in order to get there? But to get there, you need to. So, first of all, you need to really think and say, is my first venture just a stepping stone in my business career? If that's the case, you know, and you're in your late teens, early 20s, and, and you sort of say, right, I'm going to start this business. I don't want to give too much equity away. Family and friends is my first choice, of course, proven the concept, um, showing that there's a demand, showing that you can do it better, showing that you're disrupting, all those things, then I think, you know, investors will come to you, and you can dictate. The problem is when you've got a great idea and you've got no money and you've got no threat, and you start giving away large chunks of your equity, you end up having a small proportion of a business that you probably lose interest eventually, and then investors won't want to be there. Yeah. Because then you're working for somebody else, and that defeats the objective. And I would, I would never want a founder, a founder to be, if they're running the business, to to have more than me, because then what's the point? Equal to me? Yes, I'll accept that because I'm, I'm not a passive investor. I, I always invest in where I can add value. But, but you don't want to end up with a 15%, 20% stake in a business, a small business, especially, um, when you're starting up. 20% of a billion-pound business is great. So, I think, I think planning your journey at the very beginning is very vital, and I think that's where one needs a bit of advice, one needs a little bit of help, um, and I think we're, we're going to get to mentorship a bit later, but, but that's what, that's what it needs.
Billion-pound businesses are rare. Richard is a very rare component. He talks like everyone's going to do it. Not so easy. You know what you've done. You know, is a quarter point 01 of the people in the UK who've done it on their own with 50,000? I think there are 56 of us that are still involved in businesses that built them from scratch to more than a billion in value. So, 56 in the whole UK? In the UK. So, that tells you something, you know, that tells you something. It's a rare breed, right? And I think the fact is that, and again, I'm not hope I'm out of line, but probably Richard saw that the business he was in had growth potential, not only in the UK, in the States, and worldwide, and took advantage of it. That's what it's about. You've got to have a, a product or a service or something that is transportable.
And other businesses that, uh, entrepreneurs that are running sort of mid-size businesses, how do they, what's your advice on how they go about getting investment?
Look, investment is a, is a funny thing. First of all, you've got to say to yourself, why do you want investment? In some cases, tweaking your customer, your terms, your suppliers can give you investment without even going for it. And I've got one of my small, in businesses. And they said, "Oh, we need another £100 grand investment." It's not a lot of money in investment terms, say. And I said, "What do you want it for?" "Oh, we need to buy this. We need to buy that. We need to buy." Easy. Who are your suppliers? Guys, you're giving the guys 30 days. Give them 90 days. Okay. So, overnight, I changed their terms, their suppliers. Did he need investment? Great. So, that's saying, um, challenge whether you need investment. Y, tweak your model. Find a way where your suppliers will fund your business or somebody else, or you can get your cash in quicker. Yep. And you're not giving away equity. Yep.
Then you've got the banks. So, the banks are are like, uh, what I call porn brokers. They don't give any, I mean, this country is terrible. The banks don't give small businesses a chance to survive. And, and I, any one of my businesses that I'm involved in, if they tell me that they put their house on as a guarantee, I say, take it off right away. Never put your house on the line. I did it at a young age. I lost my house. And never give a personal guarantee. Lesson number two.
So, going back to investment, if you believe that you've got a proven concept, you can show that the growth is coming. And I don't mean textbook growth where you say, "Oh, take a spreadsheet. Let's add 20%, add 20%." You know, you've seen many of those before. So, be wary of taking too much debt, or better to take some equity and get somebody that can help us as well. But also, we talk about, uh, equity, you want smart equity. You want somebody that can add value to your business.
What, what is smart equity? What makes a good investor?
Well, a good investor is somebody who, who can open doors for you, who can give you advice, who, who may be able to help you with your financing even further. Um, who, who, who could, uh, guide you, who has an interest that the business grows. Um, and you want somebody who's, who you could call upon at any time. You don't want a passive investor who just lends you the money and goes, I'm not a passive investor.
And I guess that's been your key to success in the, um, Dragon's Den investments that you've made over the last 10 years?
Look, Dragon's Den investments, you take a long-term view, unfortunately. Um, but the good thing about Dragon's Den, I, so when I first went on Dragon's Den, I didn't know about gluten-free. I didn't know about snacks. I didn't know about, um, uh, organic. You know, this was all, those things were all new to me. Yep. Dragon's Den for me has been education. Been the best schooling that I've ever had to learn about the variety of businesses that I would never have got involved with previously.
And what's been your biggest learning as an investor on the Den?
You're only investing your entrepreneur. Even if it's a lousy idea. Sometimes it's the person, and the product or service is number two. Number two. Sometimes you get a great business with a lousy entrepreneur, and you say, "Can't work with this guy." Sometimes you get a great entrepreneur who is just, he's got it wrong, and you say, "Don't worry, there's this you can do, that you can do," and that's back to step number one, isn't it? Back to copy and pivot, that if they've got the wrong model, they'll keep going, they'll find a way through. You keep on changing. I always say this, you never give up. You never give up because at the end of the day, life is a journey. You keep on tweaking that journey until you get it right. You know, especially if you're young. I mean, I'm 71. I don't feel 71, but I'd give it all away to be 21 again, that's for sure.
This brings us nicely onto the third point, which is getting some coachments, coaching, and mentoring. I just listened to you both speak then, it's very apparent that you're looking for founders, entrepreneurs who are, who are curious, who, who want to learn. Um, so Richard, coaching and mentoring, why do you think it's so important?
I wish I'd had a coach or mentor earlier. And I think the, uh, the first mentor I, I got was a guy called Nigel Morris, a Brit, co-founder of Capital One, uh, big in America before it came to the UK. And this was back in 2010. Homeserve was, uh, doing okay in America, but we'd been there seven years. We're still only making $10 million profit. And I thought, I really need some help. And so I thought, Nigel Morris is a Brit that's, uh, made it successful in America. Um, so I emailed him and I wrote to him and, uh, pestered him. No response. Uh, one evening, I think it was 11:00 UK time, 6:00 p.m. East Coast, Washington DC time, I'd got his, um, office number, called him, and lo and behold, he answered the phone, and, um, uh, he said, "Persistence pays. I do remember you now. Next time you're over in the US, I'll give you an hour of my time." I said, "It just so happens, Nigel, I'm there tomorrow." And of course, I wasn't. I got on the next flight out of Heathrow, sitting in his office at 2:00 p.m. the following afternoon. He gave me three hours of his time. And a great mentor will ask some really, really searching questions, and he said, um, uh, "So, where are you based over here?" Said, "No, we're in Miami because the claims handler and insurer of our products was Matt Frey. They were Latin American. They were based there. I'm a Yorkman. I'm a bit tight with my money." So, I rent an office in their, uh, call center. And he shook his head violently and said, "Uh, to be a serious business, you need to be Boston, New York, Washington DC, and, uh, not Miami." And he was right. We hired a load of people that either wanted to go at the beach at 4 p.m. or smoke dope, and you need to, um, you need to hire serious Americans. And he asked one other question, which is, um, "So, who have you got running your business over here?" So, a fantastic guy, Jonathan King, he ran the UK, did an amazing job. He's doing a good job over here. He's a local, and, um, shook his head again and said, "Americans buy from Americans. You've got to have an American chief exec if you want to be taken seriously in America." So, we listened. I hired a guy called, um, Tom Rousen, after we've moved from Miami to Norwalk, Connecticut, an hour north of New York. Uh, Tom is still with the business today, 15 years later, and Home Serve North America has gone from $10 million profit to $250 million annual profit. So, uh, the answer is, get a mentor or coach early on. Don't leave it as long as me, and then make sure you listen to their advice.
You've also talked about the value of experience and your own experiences. Yes.
So, look, I, I, I could write a book, you know, at the age of 27, 28, I was chairman of two public companies. Didn't know anything about public, but, but one of them was, let's just say it was fraudulent. Luckily enough, um, in those days, I appointed Coopers and Lybrand, now PWC. Yeah. Who, um, did, did a check on them when, when I acquired, when I acquired 30, 29% of the business, at the time it was valued at £15 million. This was in 1980. When they did the report, they were minus 20. Everything was overvalued. There's a big story behind it. Um, I'm still with PWC after 40 odd years, still with a bank that I was always banking with, lawyers, bank, 50 years. And, you know, I'm somebody, if, very consistent with somebody, if, if somebody looks after me, I look after them.
So, you were getting that advice from some of your advisors, like the bank, and I think what happened, I didn't do my due diligence properly. That's one of the key things that when you're acquiring a business or when you're doing anything today, due diligence. That due diligence today is much easier. ChatGPT, Companies House. There's loads of ways you can do it today. In those days, it wasn't. So, and, and, and I, I was very young, very ambitious, went with my gut feeling more than any, anything else. But I learned the hard way, you know. I, I learned, I, I learned that you can fail and come back, and was lucky to have my family around me at that point. Um, and, and I still got family partners in the business. I'm not, you know, it's fine. We've got, in, in our main businesses, we've got no outside shareholders. Um, and in, in a way, uh, I'm comfortable with that. But you look back and say, if you'd had a mentor or coach that you could have avoided some of those questions. I had a mentor, how it was too late. Um, my mentor was a senior partner at Coopers and Lybrand, David Caddy. He was my mentor at the beginning, and he's retired now, of course. And I remember we, we, we went to look at this building near Shoreditch with a fortune today, and we looked at the warehouse. It was a retail business called Bamber Stores, and we said, well, net asset £16 million, let's say 10. We said, we just write this off, write that off, very conservatively. We didn't know that the building was, he had a friend who was a valuer at double the price. He had a, all the stock was double. I mean, it was just a disaster. Um, and in those days, you couldn't sue an auditor. It wasn't like today. Um, but I paid a very hefty price. I've got no regrets. Um, learned a lot.
When do you, um, when should you change your mentor, or do you keep them forever, or, uh, look, you, you pick up new mentors along the way?
You know, I remember I, um, while I was looking at Bamber Stores, I was also very friendly with Ralph Harpin. You know, Ralph Harpin started Burton Group. Quite a character. He was very shrewd, and he, uh, he, he was going to come and be the chairman of that group until he found out what was going on. Um, and he went out, he died recently, unfortunately, Ralph. Then after Ralph, there was in the same group, was David Her, um, who was an American, and he, he insisted at the time that every supplier to the brand, to their brands, had to be on the internet. It was very new. Yeah. And after, of course, my dear friend, mentor, friendship, very dear friend, is Stuart Rose, and Stuart and I still friends today, mentor, we still mentor each other, if that makes sense. Um, and we go back 40 years, 35 years, and I have a go back. Um, and I've got a lot of people like that that you pick up along the way, and they become mentors, friends, advisors, and even today, if I invest in something and I have somebody who's involved, I will go to them and ask their help. And it's almost just back to that sort of circle of helpers. Um, sort of a peer group. And I look back and think, um, it was a bit lonely as the, um, uh, chief exec and founder of Home Serve. And I look back to my Proctor and Gamble short career in marketing. I remember 13 of us, new to Newcastle, all graduates, and we got a readymade peer group, and we used to sort of each worked on a different brand. I was on Fairy Liquid. That's why my hands are still so soft. And, um, we would learn on the job during the day. We'd go out socializing in the evening, but inevitably, we'd talk about business. And it was sort of a readymade peer group.
Do you think peer groups are important?
I think, um, socializing, peer groups, um, contacts, um, going to events, going to your business events, going to exhibitions. The more people you meet, the more you suck information. And then you can then target the people you, you want to spend time with. You know, it's, it's a merry-go-round. Everybody wants to do the same thing. Everybody wants to learn from somebody else. Yeah.
And what, what's holding people back? Because I would say that a lot of entrepreneurs that I meet haven't got a mentor. And, um, why do you think? And what can we do to persuade them that, uh, it's really important, and we both should have done it earlier?
Do you know, I mentor quite a few people on the weekends. I meet a lot of people just for an hour, help them. It's, um, it's what I give back, you know. We all, when you get to our age, and I'm, I'm older than you, Richard, so you give back, and that's what I give back. I like to give back. What I'm disappointed in myself is I haven't got enough time, you know. I'd like to create something that I can give back. Um, now, one of the ideas I was thinking to do my own podcast where I would, in, where entrepreneurs can interview me for advice, straight in, definitely took a time or whatever to call it, you know, um, where an entrepreneur comes on for half an hour to an hour and say, "This is my business. This, this is this is my, this is where I'm having problems. Can you advise me?" Yep. Couldn't we get the message out there that, uh, lots of business people at the latter stage of their career should give more time back?
I think so. And actually, uh, the magic model, I think, is coachment. And, uh, if I was brutally honest, I would say that, uh, a couple of years ago, I didn't know the difference between a coach and a mentor until I, um, uh, I went and trained as a business coach at INSEAD for 12 days in 2023, and worked out that the, I guess the business coach is a bit like the X-ray machine, putting your hand in to see whether you've, um, got a broken bone or a sprain. And then the mentor is the experience, and that's the doctoral consultant that is, uh, uh, analyzing the facts and then giving that advice.
Look, in a way, I've always imagined, um, you throw semi-corner for people, and you, you have a competition where 50 people or 30 people are allowed, you have a panel of entrepreneurs. They're allowed to come up and ask questions to the entrepreneurs about their business, you know, and other people will be fascinated by the fact that, yeah, my problem is marketing, uh, but I haven't got the money, and what do I do? My business, or my business is doing this, my, how do I? It's things that you and I would sometimes take 30 seconds to solve, but it might save somebody's business.
What's the most common bit of advice you find yourself giving people who you're mentoring?
Um, look, I think, I think a lot of the time it's, uh, they're, they're up against a wall. They, marketing seems to play a big part today. Unfortunately, you know, the likes of your Meta, your Instagrams, your Facebooks just make it, and even even Amazon, make it impossible for people to make any money. Um, and I think that there's other ways you, there's a, you got TikTok now where don't charge as much, um, on mark. So, most people who've got products, it's, it's marketing. Most people who are in business, it's all about marketing. Place it takes too much of, um, a company's budget away, in, in my view. Yeah.
What are the other ways to do it without paying all that money on SEM to Google? Yeah.
Well, there's, um, somebody sent me a book today, I forget his name, called, I forget his name, but seven ways, uh, to improve your marketing spend. And, and it just tells you all emails, uh, influencers, referrals, you know, all, all those things are free, you know. Um, but then you, you've got people, you know, who have come to a crossroads in their business and say, "I've got to take the next leap. How do I do that? How do I fund it?" You know, do, do I go for a bank loan, or do I go for investors? You know, what sort of investor do I go for? Um, or, um, "We were doing fantastic until we're now dropped off a cliff. However, our bids are still high. What do we got to do?" Cut the overhead. You know, there's all these little things, and sometimes people keep on kicking the can down the road without taking difficult decisions. Difficult decisions have got to be made. Sometimes that involves family, sometimes that involves friends, sometimes that involves colleagues, unfortunately, but you have to make those difficult decisions if you want to survive.
I think a lot of people will give away their, um, time and do a bit of coaching or mentoring if the, um, the asker is persistent enough there. Yeah. I've got people who message me like, "Oh, okay, by, fine," you know, um, but, but also, I think, um, one of the things I remember, and you probably, um, Harvey, we, he went to Harvey Jones, who did Troubleshoot. I thought that was an amazing program. Now, that to me was a, I was so John Harvey Jones was so John Harvey Jones. Now, that to me was a, I would love to do that, you know, go into a business I don't know and look at the fundamentals and see what I would do. I'm not saying I'd get it right, but he was the sort of coach or mentor, wasn't he? Remember he went to Morgan Cars, y, and they said, "Oh, we've got, uh, demand that, uh, exceeds supply. We've got this little factory, we can't produce enough of them." He said, "Well, stick your price up." Yep. And suddenly they were losing money, and they became profitable just from that one, one bit of advice, that golden nugget. But that, that, that's the sort of thing that I think, um, you know, probably when, when I get to a stage where I take a step back, I, I, I do offer for, for free. I wouldn't charge for my services. Um, I, I, I'd be willing to go into businesses that I believe in, that that are on that difficult period, that need some guidance. Um, and some of it is just basic, basic, basic knowledge decisions, which management are just afraid to make those difficult decisions.
Is this conversation an example of one of the ways that the UK is different to the US? Is the US better at this? Are US entrepreneurs better at asking for help than UK entrepreneurs?
I'd say they definitely are. They're more bullish, more likely to, um, be persistent in tracking down the person they want advice from and getting it. And I think us Brits are a bit sort of reluctant to do that. There's more money in America to invest. There's a lot of money in the States, and the Americans will take a risk. And you, you've got all different funds and, uh, angels and rich entrepreneurs, and they're all willing to invest in the next unicorn or, or whatever you want to call it. I mean, if you look at Shark Tank alone, I mean, uh, the numbers are much bigger over there because the country's much bigger, but they're willing to invest, and, and you can see the growth that they can do, uh, in America. America's a massive country. You get it right there. If you said to me, where would I start a business today? Unfortunately, I wouldn't, I wouldn't say the UK. I'd say the US has got much more potential. Unfortunately, uh, you might prove a point here, but you've got to go into the States if you really, really want to make a billion. You won't make a billion in, in a small idea in the UK unless you take, unless something like, where it's tech, or something very unique, you're disrupting the world. You're not disrupting the UK.
And then, um, British businesses going into America, it's a, a minefield, isn't it? A lot of them fail. And so that means you need to get an American coach or mentor. Localize, localize your business. Do not think that you can transport your business as it is in the UK. You've got to go there. You, you've got to look at your competition. You've got to say, why are they successful? Why can't I do it? Um, they may have had a huge investment. They may be burning money. You don't know. But you've got to go, you've got to spend time on the ground. And then eventually, as Richard had already said, find yourself a local guy who could run that business for you, who knows the market, who knows the climate, and knows how to handle people.
And how much of your investment, Tuka, is about, um, providing advice, the coaching, mentoring, compared to providing the cash?
All of it. I don't have any. I do have some businesses where the entrepreneur is so good, I've got two or three of those where I ring them up, say, "Chris, how are you doing?" "Fine, Chris. If you need me, I'm here." Or he'll ring me up and say, "I'm going to so and so, but I want you in that meeting." Say, "Fine, I'll come with you." You know, um, because me going to that meeting has kudos, or, or as respectability. And that's when they know how to use me. You know, for instance, um, one, one of our guys was trying to get a buyer at some retailer, and I said to her, "Tell her I'm in the building tomorrow, like one of your, in the building tomorrow. I'd like to see her." She said, "I'd love to see you." Go. Okay, done. We work as you said, we're there the next day. So, it's playing that game. It's not a game, actually. It's persistency. And in a way, I think that some of the big retailers, they have got schemes where smaller brands can come on. Um, but, but at the end of the day, if we're talking about building a billion-pound business, then it comes back down to you know, you've got to, you've got to say, I need to be in an industry or a business that's got a billion-pound potential.
I, I wanted to give you both the last chance to have a final word if you wanted to add anything on top of what we've spoken about.
Look, entrepreneurship in my view is a passion. You either got it or you haven't got it. You know, there are no free lunches in this world. You know, nobody gives you anything for free. You have to have the passion inside of you. You have to have that willpower, and you have to work hard, and, and if you don't work hard, you don't get what you want. But sometimes it's not as complicated as you think. It's a question of stepping backwards, looking at the industry you want to be in, looking at the winners, and ask yourself, why are they winners? Can I do it better? Can I give a better service? Can I disrupt it? All those things. So, it's never too late to start, whatever the age. And I look back with frustration thinking, um, I wish I'd known about some of these steps that somebody could have told me about early in my entrepreneurial career, and if I had, maybe I could have got there twice as quickly. That just really understanding the, the copy pivot, test, learn, uh, when is the right time to take investment, not when you've run out of money, and why didn't I get that coach or mentor earlier in my career. So, I think, um, would urge anybody to, um, uh, go and do it better and quicker than me.
I, I just want to add to that, when I look at my failures, and I was chairman of two public companies, I made one serious mistake. I did not do my due diligence properly. So, if you're, whatever you're doing, whether you're raising money, you're selling the business, you're buying something, you're selling, whatever, do your due diligence. Do your homework. So, important. Homework today is so much easier with the internet, with ChatGPT, whatever. That is a must if you want knowledge. Knowledge is power.
Richard, Tuka, perfect way to finish. Thank you. You've been listening to How to Make a Billion in Nine Steps with Richard Harpin. Our producer is Lucy McY. To find out more about Richard's nine steps and how to build a successful business, you can find his book, How to Make a Billion in Nine Steps, online at Amazon or any good bookshop now.