Foodies in The Den (15:1)

I love Dragons’ Den. There, I said it. I know some business folk are a dismissive of the show because it can glamourise the investment process and potentially mislead around the rigor involved in securing funding – but I just love it! You can also accuse the show of sensationalising some of the issues which could literally make or break a young business but we’re all adults here so surely we know what we’re letting ourselves in for?

There are many reasons to love The Den and if it is used correctly it can be the perfect platform to propel a small business to the next level which is a fantastic gift to the small business world. However, I love it for one reason: the business lessons. It’s a marvellous microcosm for the business world and emphasises some of the amazing abilities and frustrating failings of the entrepreneurial world.

I have watched the show all the way through but this series I decided not to be a passive observer and get stuck in to offer my thoughts on any foodie that makes their way passed Evan’s lair in the basement and through those ominous sliding elevator doors. So this series I’m going to pull out some of the business lessons gleaned from any brave foodie to enter The Den. I’d also like to point out that what follows is not a criticism but a critique; even if it goes badly wrong, anyone that demonstrates the stones to go on TV to bare all has my respect!

northernmunkeebites.dragonsdencreativenatureSeason 15: episode 1

Entrepreneur(s): Julianne Ponan and Matthew Ford

Company: Creative Nature Superfoods

Elevator Pitch: ranges of free-from snack bars, innovative baking mixes and creative superfoods designed to cater for top 14 allergies

Asking For: £75k in exchange for 5% equity

What Went Well?

Preparation: fail to prepare and all that is key for any business pitch but it is absolutely fundamental when you’re asking someone to believe in you and to part with their money. The entrepreneurs demonstrated a strong knowledge of their own business and also the marketplace which might sound like a basic requirement but is often found wanting.

The business idea: the product ranges couldn’t be more on trend; it’s on-the-go, it’s home baking and it’s superfoods. Winning. Deborah Meaden identified that the freefrom shopper has developed into a shopper that no longer surfs packaging but wants product confidence and assurance and these guys have got it.

Distribution: there’s nothing better for a potential investor to hear than people are already buying your products and there are lots of retailers supporting it. Creative Nature was able to successfully demonstrate that its turnover is generated from a wide range of distribution with some very credible retailers. Although I’m not too sure how Christine Tacon would feel about the confession that the distribution was bought through ‘listing fees’; nevertheless from the entrepreneurs’ point of view this is a very savvy use of seed money.

What Could Have Gone Better?

Owner’s Relationship: the fact that Matthew holds no shares in the business may have come across as a bit of a tongue-in-cheek comment from Peter Jones but the reality is this information did cast a shadow of doubt in The Den. Family businesses are fantastic and there’s nothing more heart-warming than seeing a family business succeed however it does raise some questions from a business perspective. Who really owns the business? Who really runs the business? How integral is Matthew? What happens if he leaves and what’s his incentive to stay? These queries were well handled but these issues will ultimately need clearing up.

Rose-Tinted Forecasting: the ‘£1M contract’ in Co-Op was a bit of a faux pas that the Dragons were bound to pick apart. I completely understand where the numbers have come from, it’s simple science. However, we’re dealing with an art form and forecasting is not that simple. Assuming that a Co-Op store will achieve the same rate of sale as an ASDA is a little naïve; in some product categories ASDA will dwarf Co-Op and vice-versa in others. I do sympathise but a big bold headline like this will get scrutinised and criticised by any savvy investor.

What Other Lessons Can We Learn?

Profit is KING: there’s a cliché in business that sales in vanity and profit is sanity and everyone in the room recognised that Creative Nature’s margins were too tight for comfort. Every business needs to account for scalability and assume some benefits as you scale up however if margins are tight at the early stage of a business that’s a real concern. It’s not unfixable but if you can’t sustain profitability you’re in for a rough ride!

Outcome: Success! 25% equity given to Deborah Meaden with a 5% optional buy back if the business hits 2018 targets.

Would Munkee invest? Yes! Who am I to argue with the Meaden?! Creative Nature has the makings of a great brand and business. It appears like a sound investment and I’m sure there’ll be more than just Co-Op placing new orders.

Northern Munkee.

 

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Collectives Boosting UK Businesses

Now is a great time to start up in business. Don’t listen to the Brexiteers and the naysayers. We are in a period of economic uncertainty and instability but that’s the point – it is uncertain so depending on how you fill your glass we could be in a positive or a negative environment. Now, I’m no Mystic Meg and I genuinely don’t know which way it will fall when we come through trade negotiations but I do know that it doesn’t mean we should give up, go home and shut up shop!

However if, like me, you err on the side of caution or even go as far as saying you’re risk averse then the current climate may mean that you change your approach to business; and that makes sense to me. Thankfully if you do think like that you’re not alone; help is at hand. This post looks at three examples of business collectives designed to boost small business inception, growth and expansion.

  • Incubate to Accumulate

Business accelerators or incubators offer start-up companies work or office space and direct funding. According to a report published by gov.uk this year there are currently 205 incubators, 163 accelerators, 11 per-accelerators, 7 virtual accelerators and 4 virtual incubators operating in the UK. Now is a great time to get involved with these start-up platforms as they’re on a rapid growth rate with just over half (54%) the number of incubators operating being created since 2011. Incubators and accelerators may still feel like a fairly new concept but for the foreseeable future they’re here to stay.

  • Sharing is Caring

northernmunkeebites.foodstars6Another fantastic example for food of using the collective to drive your business is shared commercial kitchens for food companies like FoodStars deliver. It’s a fantastic world where you can rent a commercial kitchen and avoid huge, crippling capital expense when you’re starting out. These guys are now offering facilities across Bermondsey, Bethnall Green, Vauxhall and Shoreditch so if you’re in the Greater London area and you want to start your own food delivery Empire or the next big thing in food or drink product development then it’s now really easy to do so!

  • The Power of the Crowd

Crowdfunding has received a lot of bad press in recent weeks and has been portrayed asnorthernmunkeebites.foodstars7.jpg bad investment which appears to have scared off a lot of serious investors however it’s still a very real, very viable option for start-ups. Crowdfunding has evolved in 2017 and I’m now seeing young businesses pitching for much smaller sums of money attracting city types, small business supporters and genuine fans! What could be better? So instead of giving away huge chunks of your business to ever more demanding portfolio builders, businesses are now using the power of the crowd to create fans, fans that will have a vested interest in evangelising and making your dreams work. Belting!

So that’s it: my guide for small businesses in using the collective to induce business growth, inception and expansion. As an entrepreneur you’re likely to be an independent, self-starter with all the drive in the world to do it on your own but trust me, it’s much easier to work with the collective.

Northern Munkee.

Secrets of Small Business Start-Up Success

Starting up your own business is bloody scary. It’s a huge leap of faith whether you’re jumping in feet first and leaving the relative comfort of employment or you’re living a double life and trying to cultivate your empire in your ‘spare’ time. I have a great deal of respect for anyone that takes that leap. The reason that it’s so scary is that nothing is guaranteed, despite how many of your friends down the pub think you’ve got a great idea. According to smallbusiness.co.uk 40% of small businesses are opened and closed within 5years; that’s bleak. However there is a wealth of support out there for experienced and budding entrepreneurs in the shape of literature, consultants and free government schemes. But how do you sift through all this information and concentrate it to relevant advice? That’s where I’m hoping to help.

Now the first thing to say is that there aren’t any silver bullets when it comes to business advice. I’m not in a position to say: do this one thing and I can guarantee your success. If I could I’d be a very rich man indeed! This advice is based on sifting through a lot of the available information and my own experience; don’t worry it’s presented minus the BS!

So here are my three secrets to small business start-up success:

1. Do Your Homework

northernmunkeebites.foodstars2If, like me, you have a guilty pleasure for BBC’s Dragons’ Den then you’ll be familiar with this line of advice. An uneasy amount of start-up businesses dive into a market which they know very little about but they are full of passion for. Now don’t get me wrong, passion in business is vital but misguided passion can be dangerous. Holidaying in Spain is not a good enough reason to start a business; that’s merely the seed of a business that will form the passion and resilience through the hard times. It should go without saying, but if you’re about to invest a big chunk of time and money into something you need to understand what you’re getting into. You need to understand if it’s a potential business or just a hobby. So my advice is get online, get out there, get abroad, get amongst your friends and family and get clued up!

2. Start-up for Success

I get it. One of the most exciting things about starting a business is buying lots of shiny new things; however my advice is simple: don’t. You may get guidance from some consultants who suggest that you need to be in control of the supply chain to manage your business effectively; for a start-up this is nonsense! If you can maintain quality and efficiency I would always outsource big sections of your supply chain to keep your business lean and nimble at the start to allow flexibility and ease of change. Companies such as FoodStars can provide that flexibility with a platform for start-up businesses in London by offering commercial kitchens for rent in Bethnall Green, Bermondsey, Vauxhall and Shoreditch – go and seek these guys out and save the capital expenditure for expansion plans.

3. Don’t Sell Your Soul for Sales

This point is key: YOU are the best person to sell your products or your business. I know it’s tempting to answer the calls of heavily experienced sales consultants when they sell you the dream of being able to get your product into mass distribution. Unfortunately you’re more likely to find a pot of gold at the end of a rainbow than a good consultant. Even if you do stumble across the world’s best salesman they still won’t sell your business as well as you do. It’s your baby, no one will love it more than you do.

So there you have it: my three secrets of small business start-up success. No silver bullets just sound advice. Enjoy!

Northern Munkee.

Has The Artisan Bubble Burst?

OK, so this post is a little uneasy for me to write because it’s challenging everything I love about the modern food industry but I fear that the artisan bubble might have burst!

northernmunkeebites.artisanfoodfestThis fear was first aroused after a disappointing visit a couple of weeks ago to, what was, my favourite food festival in the calendar. I bounced along through the sea of marquees with Mrs Munkee full of enthusiasm, gusto and a tingling palate ready for some fine food foraging. To my dismay all I was met with was wallpaper: gin, cheese, gin, uncovered cakes, gin, brownies, pickles, gin, pickles, pickles, gin, cakes, cider, jam, big corporate stand, big corporate stand, jewellery (?), massage tent (?), gin, tea, yoga (?) and a few more gin tents. Now you might be looking at that list and be thinking: ‘well, that sounds like a belting day out…what’s this chap’s game?!’ and I could forgive you for thinking that but where have you been for the last five years?! It’s all good stuff but give me something new! Food festivals used to be about discovering the next trend and challenging your taste buds and perceptions, now I struggle to tell them apart from what’s on the shelves of mainstream retailers. Does that mean that mainstream retailers have upped their game or does it mean that startisans have run out of road?

Farm shops, delis and food halls have also lost their way in my opinion. They used tonorthernmunkeebites.artisanfoodhall represent the little guy (or gal) making a go on their own and real show of local produce and talent. Now they might as well wear badges saying ‘Every Little Helps’.

I’ve written in the past about the unique market conditions that have afforded small businesses the opportunity to thrive in the food industry but is this a sign that the opportunity is waning? Have the initial visionaries graduated from standing in fields and facing the elements of British summer time in wellies and checked shirts to seated behind large oak desks in sought after London-locations adorned by Savile Row? Don’t allow me to mislead you, it’s fantastic that small businesses have earned their stripes in the farmer’s markets and progressed and built businesses that can compete in the tough Top 4 Retail environments but why has the pipeline dried up?

northernmunkeebites.artisanmarketCould it  be that this once empty space has been occupied and strangled by big multi-national corporations aware of the need to act on trends? Big manufacturers are now either investing into capex and developing their own ‘artisan’ ranges or buying up emerging businesses and welcoming them into the fold. This shift has sprouted a post-modern foodie who scoffs at the words ‘artisan’ or ‘artisanal’. Even the word has lost its way and become pastiche.

This post has been difficult to write because I type it with exasperation. I have gone through a real pyschomachia (thanks to my A-Level English teacher for increasing my verbosity with that word!) writing this and that’s because I feel like I’m in mourning. It’s less of a light bulb moment and more of a dimmer switch being gently turned down from light to dark.

But surely this can’t be it? Who can the revolution look to for their new champion? Wenorthernmunkeebites.artisanrevolution‘ve done all the innovating now and it’s out of our system and we should just be happy with bacon jam and popcorn. No. I’m not having it. If you’re a small business reading this hear my plea: don’t stop the revolution just because some of the leaders have left; keep challenging and exploring!

Northern Munkee.

Any thoughts on my wee rant? Pop them below whether you love or hate it because sharing is caring.

 

A Shift in UK Retail?

So, this morning I read about the merger of two giants in UK food retailing, Tesco and Booker, and I couldn’t let this pass without comment…

It’s hard to tell at this stage what this will mean but we all love a good speculate…

Will this signify the death of independent retailing in the UK?

I very much doubt it. This deal sees the marriage of five Convenience fasciae: Londis, Budgens, One Stop, Premier and Family Shopper. This means that between the two merged companies you are more than likely be within spitting distance of one of their stores.

We’ve all witnessed the rise of the Tesco Expresses migrating into old banks, ex-pubs and any bit of available retail space so do we really think this move indicates a step towards squashing convenience? I think not.

What will this mean for food manufacturers?

Well, again it’s impossible to say with certainty but I imagine there are a few sweating that they may be left exposed on pricing or agreements.

Ultimately it should be seen positively by food manufacturers. It should be seen as a step to reduce complexities in their supply chains, to rationalise SKU counts and make their factories more efficient by putting more volume through fewer SKUs.

Why has this deal been brokered?

Again, I’m speculating but…

I had the pleasure of seeing Charles Wilson speak at a Convenience Conference in London a few years ago (if you ever get the chance I must recommend that you take it, he is inspirational) and I was immediately reminded of this when I saw the news. Mr Wilson asserted that he wasn’t in the wholesale business, instead he was in the property game. He referenced the McDonald’s business strategy of buying prime real estate and making a few burgers on the side and said that this was his ambition.

In particular, he intimated that his new project was Booker India which, at that time, was a market that Tesco were unable to enter due to government initiatives promoting local suppliers. Mr Wilson’s strategy was to buy prime real estate that would, in theory, appeal, to the UK’s biggest supermarket. Clearly a shrewd cookie!

Since that conference Tesco agreed a JV deal in 2012 with the owners of the country’s Star Bazaar chain which made them the first foreign supermarket to enter India. Is now the time for Tesco to focus on the key BRIC economy and drive real value outside of the UK? Is this merger with Charles Wilson’s Booker just a property deal?

Again, I’m speculating but…

Northern Munkee.

BBC’s The Apprentice: on Gin Branding

BBC’s The Apprentice: what they could have done differently?

I have a confession to make…hello my name is Northern Munkee and I’m a big fan of The BBC’s The Apprentice.

Yes, I join the millions of viewers each week who scream in unison at their TV sets offering advice to budding entrepreneurs seeking to earn Lord Sugar’s affections (and a £250k investment).

Now, just to be clear this post is not designed to criticise any of the candidates. The process isn’t something I’d want to go through and I have a great deal of respect for those that do; they are all great business people in their own right. However, when a foodie task like this week’s arises it would be remiss of me not to consider what they could have done differently.

For those with busy Thursday nights or haven’t had the chance to catch up on iPlayer I won’t give anything away regarding the Final 5 – I promise. The premise of the task was to develop a new gin brand and product to pitch to three teams of booze buyers.

I just want to call out three areas that I believe both teams could have done differently: the product, the brand and the pitch.

northernmunkeebites.ginbrand.png

The Product 

So, let’s skip to over the ‘puddle-coloured’ product; we all know it’s wrong and the poor girl got enough stick for that.

Anybody that’s been to a food festival this year will know that we’re in the midst of a gin revolution; which means the palates of the early-adopting populous are becoming more discerning when it comes to gin. They are, therefore, not easy to fool.

Although one team clearly outperformed the other in product terms, they both went into the task blind. Unless you’re a gin expert how can you understand what’s popular, what’s on trend and what’s a dog. I’m confident that some superficial market research would have prevented some of the initial mistakes. A great quote from the show was ‘don’t be unique for unique’s sake’ – priceless.

The Brand

Now, I have some real sympathy here. Creating a brand to sell to Tesco shouldn’t be achievable in a month, let alone a morning so I fully appreciate the restrictions imposed on the teams. That being said, they didn’t seem to be in danger of stumbling upon on the next Innocent!

A brand is an emotional entity and needs to inspire people to get behind your cause. Difficulties with pronunciation and a haunting history weren’t about to drive the gin-drinking hipsters to buy ‘Colony’ or ‘Giin’. The ‘Colony’ camp did at least attempt to add some texture to their brand and created a credible backstory but, if we’re honest, it was doomed from the outset.

The Pitch

I’m afraid I have to be a little critical here, although I do fully appreciate how intimidating any pitch can be; let alone when you’re put on the spot and have a TV camera thrust in your face. Both teams pitches lacked any sort of structure and cohesion even though they did enjoy some success. If you feel you need more than one person to present then it is integral that you assign clear roles and responsibilities as opposed to having three people telling one story.

A strong sales pitch is composed of experts: a brand expert, a category/market expert and a customer expert. You’ll note that I haven’t listed a ‘sales expert’ there. My view is that you shouldn’t need to sell in the classical sense; you should never need to ask for an order because you’ve understood your customer, identified an opportunity or issue and your proposal presents the perfect (and collaborative) solution.

northernmunkeebites-quickguide

So to summarise this post, let’s look at what we can learn from this episode:

  • The Product: do your research and if you intend to develop a unique product make sure you have a reason for doing it
  • The Brand: seek to inspire people to create fans not customers
  • The Pitch: create a pitch composed of experts but leave the sales expert in the office

So that concludes my TV-inspired post, be sure to check out my latest guest post on branding for Smoothie PR; and before you go don’t forget to leave me a comment on this post to let me know what you thought of the episode.

Northern Munkee.

A Startisan’s Guide to Employing Consultants…

To spend or not to spend…that’s the question.

I’ve been very fortunate that I have sat on most sides of business: I’ve been a buyer, I’ve been a seller, I’ve been a retailer and I’ve also been part of a start-up business. So I do feel fortunate enough to have quite a rounded view.

This post looks into a really tough question that faces all startisans: how should I spend my money?

You’ll find when you start your business that you won’t face a shortage of outlets for your cash and there will be a metaphorical queue at your metaphorical door of ‘consultants’ who can design a plan tailored to your needs (for an extortionate monthly retainer without any guarantee and a complicated set of T’s and C’s). So how do you start to sort through all the white noise and discover what is (non) essential?

I am fully aware that this post may seem hypocritical, as I consult, but I can hold my hands up in earnest and say that I will not be able to help every business. It’s just not possible. It really depends on what the individual business needs; by which I mean: where are you on your journey? what’s already in your tool box? where’s your destination?

Where are you on your journey?

Everyone has their own analogy but I think of a business owner as a parent; scared, unsure and learning on the job but the pride and feeling of accomplishment returns the investment ten fold. Now, to continue with my analogy, you cannot expect to apply the same parenting techniques to a baby as you would a teenager – you’d get some very embarrassing results if you attempted to carry an angst-ridden teenager through Manchester town centre in a papoose!

So the first thing you need to ask yourself is where are you at on your journey. If you consider yourself a startup or even pre-startup there’s little point in investing in a CRM consultant, that would be a little premature. However, you may decide that you need a branding expert to ensure you’re setting off in the right direction.

What’s already in your toolbox?

Now, the first point to note is that entrepreneurs are not good at everything. I don’t care what you say, they’re not. Even the most successful have strengths and weaknesses. However, the most successful entrepreneurs are very good at knowing their strengths and investing in their weaknesses. Conversely, it would be a monumental waste of money to outsource something that you consider to be one of your strengths.

So, early on in your startisan journey, you need to establish what your strengths and weaknesses are to make sure you’re only investing in weaknesses. There is no one better placed to sell your product than you, it’s impossible for anyone to be more passionate about your brand.

I have, unfortunately, made the mistake of employing someone to sell my brand for me early on in my business’ life and it ended badly. I have spent the majority of my professional life in either buying or selling functions so one thing I do know is how to sell so this should have been the last thing I looked to outsource. I believed that having the sales generation looked after by a third party was the right thing to do as it would allow me ‘to think bigger things’. Well, they were rubbish! These agencies promised me the world, as any good salesman would, and delivered nothing. Lesson learnt!

Where’s your destination?

This final question depends on the strength of your brand and your self-awareness of what you’re trying to achieve. If you don’t know the answer to this then I’d definitely recommend working with someone that can help you find your place. If you do then this will help you determine what sort of help you require.

So that’s a brisk walk through my thoughts on the use of consultants in start-up businesses. I have worked with consultants in various walks of life and have found that they are all very good at identifying issues and the solutions will spookily match the consultancy’s specialism. However, I often c0nsultants like getting career advice from a teacher at school – unless you want to be a teacher they’re not going to be much use!

That being said a good startisan will be aware of their shortcomings and seek out the right person to help so I am, contrary to the tone of this post, an advocate of investing into outside advice. Just be confident in what you do and fight the temptation to be bowled over by a sharp-suited, silver-tongued sales patter. Your brand deserves better than that.

Northern Munkee.