‘My brother’s giving me £10,000 to start a new business,’ Masa said on the phone. ‘Can you advise me? I want to open a shop selling Serbian and English foods.’
Terrible idea, I thought. ‘Good idea,’ I said.
We discussed it over coffee. Masa is a loving Serbian man, with a loving Serbian wife and children. Rich in love and family, he’s poor in everything else. He was excited. ‘You used to be a business consultant, yes?’ he asked.
‘Yes,’ I said. I was trained in a UK government scheme to help businesses start a new division or whatever. My first job was to start a conservatory division for a successful double-glazing manufacturer, from research and development to hiring workforce and designing brochures. On my second day I told the MD his problems – he intended to offer a 10 year guarantee, but I found seals holding glass to frames only had a 5 year guarantee. It helps to be psychic. He offered me a directorship.
‘So,’ Masa said, ‘can you help me?’
Hmm. I charged £1,000 a day in the 1980s. He’s poor but loving. ‘Yes,’ I agreed. ‘No charge.’
‘I need to know about licences for a shop, import duties for food from my country, and tax.’
‘OK,’ I said. ‘But first let’s do approximate costings.’
‘I don’t want to do costings. I just want to open the shop.’
Oh dear. A total business novice. 'I'll do costings anyway,' I said. Ten minutes later, rough start-up and first year operating costs were on paper. ‘It depends on the size of your shop,' I explained. 'It may cost more than your brother’s £10,000, just for property deposit, advance rent, stock, shelving, signage, vehicle etc. If you want to open 11 hours a day, 7 days a week, your first year’s costs including staff is over £80,000. If you don’t sell much fast, how will you survive if you only have £10,000 to start with?’
‘But my brother doesn’t mind if I lose the money.’
‘So what will you do if you go bankrupt? Go on the dole again?’
‘A similar Polish-English food shop is successful.’
I folded the paper with rough costings and gave it to him. ‘And three others have closed,’ I said.
Too many people starting businesses think like the Nike ad – they can ‘Just do it.’ Then go bankrupt. Business consultancy tries to bring realism to dreams. In this case, I suspect my free consultancy is outweighed by Masa's profitable dream.
Terrible idea, I thought. ‘Good idea,’ I said.
We discussed it over coffee. Masa is a loving Serbian man, with a loving Serbian wife and children. Rich in love and family, he’s poor in everything else. He was excited. ‘You used to be a business consultant, yes?’ he asked.
‘Yes,’ I said. I was trained in a UK government scheme to help businesses start a new division or whatever. My first job was to start a conservatory division for a successful double-glazing manufacturer, from research and development to hiring workforce and designing brochures. On my second day I told the MD his problems – he intended to offer a 10 year guarantee, but I found seals holding glass to frames only had a 5 year guarantee. It helps to be psychic. He offered me a directorship.
‘So,’ Masa said, ‘can you help me?’
Hmm. I charged £1,000 a day in the 1980s. He’s poor but loving. ‘Yes,’ I agreed. ‘No charge.’
‘I need to know about licences for a shop, import duties for food from my country, and tax.’
‘OK,’ I said. ‘But first let’s do approximate costings.’
‘I don’t want to do costings. I just want to open the shop.’
Oh dear. A total business novice. 'I'll do costings anyway,' I said. Ten minutes later, rough start-up and first year operating costs were on paper. ‘It depends on the size of your shop,' I explained. 'It may cost more than your brother’s £10,000, just for property deposit, advance rent, stock, shelving, signage, vehicle etc. If you want to open 11 hours a day, 7 days a week, your first year’s costs including staff is over £80,000. If you don’t sell much fast, how will you survive if you only have £10,000 to start with?’
‘But my brother doesn’t mind if I lose the money.’
‘So what will you do if you go bankrupt? Go on the dole again?’
‘A similar Polish-English food shop is successful.’
I folded the paper with rough costings and gave it to him. ‘And three others have closed,’ I said.
Too many people starting businesses think like the Nike ad – they can ‘Just do it.’ Then go bankrupt. Business consultancy tries to bring realism to dreams. In this case, I suspect my free consultancy is outweighed by Masa's profitable dream.
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