The Lazy Entrepreneur Podcast
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All of the following episodes can be listened to in any order. So find a subject you’re interested in and start there!
Sam on his current lifestyle:
“I think that was my realization, that the life I would live if I was retired is the life I live currently.”
Should financial independence and early retirement be your end goal? Ben Larcombe and Sam Priestley discuss their different attitudes towards financial independence and the FIRE movement.
Listen to this episode of The Lazy Entrepreneur Podcast on:
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
01:17 – FIRE: financial independent retired early
03:05 – Four levels of financial freedom
06:24 – When Sam decided to quit gambling
08:30 – Ben’s decision to not travel around the world
09:30 – Can you buy, pray or sleep your way to happiness?
12:52 – New term coined: active puttering
15:20 – Distinguishing between financial independence and early retirement
17:20 – Saving money by earning more or by spending less
20:13 – Frugal financial independence thinking
25:51 – Pensions vs. passive income
SAM: Hello and welcome back to the lazy entrepreneur podcast. I’m Sam Priestley and once again we got a special co-host on.
BEN: I’m back.
SAM: He’s back it’s Ben Larkin again my business partner and we’re here today to talk about financial freedom and should financial freedom be your ultimate end goal? I’ve actually been really looking forward to this one because it’s something I think about quite a lot and I’m sure Ben does as well?
BEN: Have you written anything about financial freedom because it’s kind of like it goes underneath, in between the lines of a lot of stuff that you talk about. It does, yeah I have written a couple of blog posts, especially early on, so I wrote one. I’ve written quite a lot about my investing strategies and a lot of them then link back to an original blog post about financial freedom and about early retirement. Before start talking about that, Ben what is your definition of financial independence and financial freedom?
BEN: Well I do want to ask you, are they meant to be the same thing or are they different things? What is the term that we’re using?
SAM: Let’s go with financial independence because there is this FIRE movement I heard about which is Financial Independent Retired Early. Which is kind of the online name for this kind of group of thinking.
BEN: The mister money mustache brigade.
SAM: Yeah exactly exactly, mister money moustache is another blogger who posts a lot about financial independence?
BEN: Okay what is my definition of financial independence? I mean the independence bit makes me think you’re no longer reliant on a job or a active business so financially, you could stay in bed for the rest of your life and the money would still be coming in so there’s no, you’re not forced to have to go to work or do a business or anything else like that because you’ve saved up enough money that it’s just ticking over.
SAM: Yeah that makes sense.
BEN: That’s why I don’t know is there an official definition of financial independence?
SAM: I don’t know if there is an official definition but I did an interview on Pat Flynn smart passive income.
BEN: Oh yeah I forgot about that, you should have made a bigger deal about that.
SAM: I should of it was quite a big win for me. And in that I kind of outlined five different types of financial freedom or four.
BEN: Did you go for freedom?
SAM: I don’t think I called it that, I think I kind of explained you know my thoughts about certain things and they wrote up as an article delineated by this different stuff okay, then we talked about the different ones. So the first one I put was when you’re earning enough to not need to get a job, but you could still be working quite hard. So you’re kind of doing your own thing you’re independent that could be you’re working on your table tennis business or whatever and it’s earning some money. In that ways you’ve got financial independence, you don’t need to be going and working for someone else for a job.
BEN: Because you are making your own money.
SAM: Step two I put where you are earning most of it from kind of passive businesses, so business you still need to work on but they are on time for money so you don’t need to work really really hard.
BEN: So you’ve done the hard work and now the business is taking over but you still need to overall manage it.
SAM: Yeah exactly. Step three was it doesn’t rely on active income anymore. I’m getting mixed up by active and passive but what I mean by that is your saving and investments are completely passive, you never need to touch. There’s no managing your earning, you got enough money to get you.
BEN: What I was saying about staying in bed all day.
SAM: Which is what you’re saying about staying in bed all day.
BEN: There’s zero active work you would have to do because yeah whatever stock market or bonds give you enough income just to.
SAM: And so our table tennis business is pretty passive, we don’t spend much time on it but if I didn’t touch it ever again it would quickly disappear.
BEN: Yeah so that’s the stage two.
SAM: Right not the stage three and then stage four is you have enough money to not just live how you are but also to put money into stuff you want to, into stuff you love so that could be investing in your hobbies or helping out family.
BEN: Ok so that’s just a richer financially free person.
SAM: That’s a richer financially free person so you just got more money earning your passive income so step three I’d say you have free time, you got all the time you want you’re time free so if I wanted to start another business I would probably at step three I would not want to spend too much money on it. If I wanted to start a hobby I’d do a hobby where I could spend a lot of time but wouldn’t take up skydiving or something like that.
BEN: So you don’t need to work but you have to live a relatively frugal lifestyle.
BEN: Step four frugality is thrown out the window.
SAM: Yeah doesn’t matter what you do, you’re going to be fine. But that’s just something I made up and how I kind of think about things because there was a time where I thought you need to be earning enough from stocks and shares, that was like the goal, but then once I started earning money from these more passive businesses that I still slightly managed, my opinion on that kind of changed. There was a time in 2014 when I made a decision to quit a business, gambling stuff that was making me a lot of money whereas if I just been going for financial independence I would have kept doing that to the point where I had enough in savings and stocks and shares and stuff like that, but I quit it because I had other businesses that were making me enough which were more interesting, a bit more passive and I had some investments.
BEN: Yeah because the whole retire early thing you could be working 14 hour a day city job just with the with the long-term vision that I’m only gonna do this for ten years and then I would have saved up this amount so it doesn’t mean that you’re chilling around starting businesses, you might be slogging away at this horrible job but just you’re doing it for a purpose of getting X amount of money so that you can retire.
SAM: And it comes down to what is the goal of retirement. And so for me, what I thought about what would I do if I retired, well what did I do in 2015, I went traveling full-time, I started working on my blog and a few business that I was interested in and sort of self-improvement stuff so doing a lot more Brazilian Jujitsu.
BEN: And this is very tim ferrissy 4-hour workweek, the new rich. You might not be rich in the sense that you’ve got ten million in the bank but you’re rich the fact that you can be tossing around South America doing jujitsu when everyone else is slugging away on a tube.
SAM: So instead of working really hard for another three or four years or five years or ten years or whatever it is to get to that step three, I kind of quit a step two which kind of brings me on to is early retirement all it’s cracked up to be?
BEN: I guess we wouldn’t know would we?
SAM: Oh we wouldn’t know but we could, doing the travelling one of the reasons we stopped traveling is we travelled for about a year and a half one of the reasons that we stopped was I started to feel a bit uncomfortable with living like a hedonistic life and not building much and not actually being a productive member of the community.
BEN: Yeah because we were gonna go travelling, me and my wife, and someone from church like after we told them randomly said have you thought about how are you going to serve God in your year traveling and it really like rubbed me the wrong way because I was like no I’m just gonna just let me go I’m young just let me go travelling.
SAM: Like toss around for a bit.
BEN: After I let it sink in and I did start to think like this is like I have literally given no thought to anything but I want to go and go traveling. Who cares about anything else? I’ll just do I want because that is the mindset of a lot of that niche area isn’t it it’s like if you want to go and be on a beach, go be on a beach.
SAM: Live the dream yeah.
BEN: And there’s so much stuff now that says about how happiness and fulfillment doesn’t come from trying to do everything you want to do because you really quickly get bored of that and then you’re left with nothing.
SAM: Yeah I actually wrote a blog post kind of on this sort of stuff not that a few years ago actually quite a long time ago, and I called it, can you buy pray or sleep your way to happiness so I looked at a bunch of different things like the correlation on how much sleep you’re having to well-being. One of the things I looked at was how age is impacted by happiness. So kind of your happiness increases till you’re about 20.
BEN: You mean happiness is impacted by your age.
SAM: Yeah then it decreases consistently till about 50, 51 and then it starts increasing again and it increases until the point you die and over 75 are the people with the highest level of well-being.
BEN: That’s not what you would expect.
SAM: So that to me says that work is rubbish, everyone working is, and then at 51 you’re really just starting to retire, you got that retirement age in sight hmm but then I also started looking into how it affects your life expectancy, retiring early because I have this kind of concept that working is good for you and if you retire and then start dossing around and doing nothing, that’s really not very good for your health.
BEN: At least doing something is good for you.
SAM: And I couldn’t really find, I found a bunch of studies all saying completely different things. My conclusion was it kind of depends more on the career you’re doing because there are certain careers that aren’t good for your life expectancy, they’re just really stressful. Either really stressful or like physically bad for you like you’re doing a lot of physical labor or in dangerous environments.
BEN: So I coached able to to a guy who was like mid-70s, very wealthy, has been very successful and one day I was asking him why do you keep working so hard now. Mid 70 still gets up early, goes into work, works all morning really hard, got all these things he’s trying to do. What’s the point like when you’ve already so he’s obviously financially. Why does he bother doing it? And he just said what else am I gonna do, sit and do nothing? And you don’t want to do that do you? But that seems to be the goal of so many young people when I think it’s like let’s work really hard whether it’s in the city or starting some crazy business and if by the time we get to 40 I can retire and I’ll have all the money I need but it’s like but then you get there and you’re like oh what do I do now? I’ve got no reason for being alive really, I’m just consuming stuff.
SAM: I think that was my realization that the life I would live if I was retired is the life I live currently. I don’t think there’s much I would change and then when I was thinking about it and the stuff I would change is what I changed, which was quitting that business which I didn’t really enjoy. I do think that’s interesting though because I think about my grandparents who retired and then kind of never left their living room again.
BEN: I mean I can’t remember a time when one set of my grandparents weren’t retired because they took early retirement in like mid-50s and they’ve been retired for like 25 plus years, so that’s their life. As far as I’m concerned, they’ve never done anything but just putter around but your tagline actually it’s puttering around starting businesses so you’re still puttering around but you’re just doing something about it.
SAM: Active puttering, it was a bit like the podcast we recorded last time about turning your business into a hobby where we’re saying there’s a big difference between an active hobby where you’re engaging your brain in it and a passive one where you’re just kind of monging out and consuming.
BEN: Watching loose women which is a daytime TV show. I used to watch it a lot at table tennis academy.
SAM: I think there’s also something about contribution to society right. Even if you’re doing a job that doesn’t really add much by the job itself, the money you’re earning is then you’re paying taxes on it and then the money you’re spending is having VAT on it and ends up getting back into the system and circling around whereas if I just accumulated as much as possible then that money is then sitting there not contributing anyone. Well if I am buying property it just raises the price of property for everyone.
BEN: Making life worse for everyone! Yeah if the end goal is to become this self-sufficient, living off unearned income type person, that’s great for the odd man but you can’t have the whole of society living off unearned income because the world can’t function like that yeah. So you’ve set as like the highest goal, the person who we think is most successful is the person who’s actually just like a parasite off of everyone else which doesn’t make any sense.
SAM: All their wealth hoarded somewhere where because it’s a churn isn’t it that’s what’s good for society, the money going in and out, the turnover. But then I suppose there are people like that 75 year old person you coach. Not everyone’s going to do it because obviously there’s people who don’t want it because there’s people who’ve shot right past early retirement and are still working. Any kind of multi millionaire or billionaire could have retired and lived a very comfortable life and chose not to.
BEN: I guess the financially independent and retire early are two different things that you don’t have to subscribe to both. He is financially independent in a sense that he has no stress about money but that doesn’t mean that he wants to retire so maybe some people have the goal of being financially independent, other people have the goal of retiring early and it’s not the same thing.
SAM: Yeah that’s very true. Well let’s talk a little bit about the mechanics of financial independence. First of all, how much money do you need?
BEN: Well what does mister money mustache say he’s got his little formula doesn’t he?
SAM: He’s got a little formula he says he needs about 25 times your yearly expenses stored in stocks and shares basically.
BEN: Because he thinks you’ll get a 4% return or something.
SAM: No he thinks you’ll get a 7% return of which 3 percent will be inflation so you can withdraw safely 4 percent and then that will last you forever.
BEN: Which may or may not be true.
SAM: Because the stock market could halve, could go to 0. There’s loads of things that could happen.
BEN: You would probably end up always slightly worried that you haven’t got enough so you keep looking at your bank balance like, ah finally got a million pounds and then you have like a party for about ten seconds and then you think, but is a million pounds going to be enough or do I need 2 million pounds to be completely sure.
SAM: I was reading the blog post from someone. It was his yearly report for the end of 2018 already in 2017 and the 2017 goes oh and Bitcoin has done so well that I’ve now reached my financial independence so I’m gonna throw a party I’m gonna figure out what I want to do with my money. You read 2018 he’s like and so bitcoin has lost all its value.
BEN: He keeps all his money in bitcoin? Because that’s not giving you a return that’s speculation.
SAM: So he hit his target and then lost it again. So mr. money moustache really pushes the frugal living side. There’s two ways to save more money, you can earn more or you can spend less yeah so he’s saying if you work a normal job, a city job like a middle-class job you can by living not like a middle-class person basically save a lot of money and retire early. So I think he retired at I think 31 and him and his wife.
BEN: And that was through just working jobs.
SAM: They were on good salaries but not huge salaries.
BEN: And saving my over half their income or something.
SAM: I think it’s something like if you say 75% of your income you can retire in eight years or something like that. So what about you, is financial independence a goal?
BEN: I don’t think it’s like an obviously stated goal I mean for most people our age getting a house is a goal isn’t it? Because that’s such a big purchase that once you’ve got one it kind of feels like you’re a bit more financially independent, but I don’t know really.
SAM: Do you have financial goals?
BEN: My financial goals are just to make enough money each year to pay us the salary that I want to pay us.
SAM: A lot of people think they need to balance their income and expenses.
BEN: I definitely don’t do that.
SAM: And I think there’s something about being self-employed and running your own businesses that means you don’t think like that because you don’t have a set amount coming in each month that you can rely on. It changes every month so you always want a little threshold above what you’re spending and so I have pretty much forever really just lived the life that I want to live in terms of expenses and then just treated the income side of it completely separate. And most of time I’ve had more income than expenses but I’ve definitely had times when especially actually two years ago I had a year where I spent more than came in, an expensive wedding, gave quite a lot of money to charity.
BEN: Yes I mean we’re both saving money so to an extent we are both working towards something aren’t? We don’t just we spend everything we earn.
SAM: There’s a reason why I’m paying a large amount of money I’m filling up my I sir and I’m investing in my Vanguard life strategy 80% accumulation fund every year because that is one goal. It’s not the primary goal You know I want to do good, I want to give to charity but giving to charity is the opposite of saving for financial independence so how do I balance those two desires in my life?
BEN: Especially if you’re going for like the frugal living save everything you can method. Like I don’t see how giving to charity can really be justified as part of that it doesn’t make sense does it? Yeah unless you’re really committed to giving to charity but then that would have to supersede your financial independence. Frugal financial independence thinking.
SAM: And that would be a side to it thinking well if I get to financially independence as soon as possible then I can quit my job and I could spend all my time helping people.
BEN: And I think you do see people that do that, work hard to get to a position where they’re then able to use all their time in the church or working on some project that is going to help the community or something.
SAM: I think it’s all about balancing your goals and the lifestyle you want but I think the retirement for retirements sake shouldn’t be a goal.
BEN: I’m quite happy with the financial independence idea I’m less happy with the early retirement concept.
SAM: Having a nice big buffer of cash in case you get really ill or something, that’s not a bad thing to have. But retiring and moving to a beach and doing nothing I don’t think it’s particularly good for your mental health really to live that sort of life, there is something about work and being productive now might be that you’re working a job where you’re not getting any of that. I get to choose what I do for a living, I choose my job it so I can choose stuff that are linked to my hobbies and linked to my interests whereas if you’re working in a company that you think isn’t doing good for the world or where you’re just spending all day not really doing anything productive, dealing with bureaucracy and office politics, then maybe that is a really good goal that you should want to be able to get to a level of financial independence where you can quit that job and go do something more productive more interesting.
BEN: What do people recommend you should invest in?
SAM: Well they recommend a world tracker fund okay like a really cheap expense ratio, world track a fund.
BEN: But the way that this stock market is these days they’re all linked anyway so it seems like.
SAM: Yeah if you’re in the FTSE 100 you’re kind of in global aren’t you?
BEN: Yeah so by saying well actually I’m diversified over the whole world, they will crash and goes up they’ll go up to an extent see you can tell yourself you’re really diversified but actually you’re not you’re a false diversification.
SAM: Yeah and they’re all the big companies. You’re not invested into smaller businesses and then they say that as you get closer to the age you want to retire, you should start shifting that a percent of that into bonds, into more stable income.
BEN: So you don’t get much return on bonds at the moment do you.
SAM: You get like 1%. So what do you invest in what do you do with your savings?
BEN: I mean I’m a bit out of the box with investing thinking aren’t I?
SAM: Just leave it in a bank account, cash under the bed.
BEN: I mean I like to have a fair amount of disposable. Say something happens I want to have money that I can do something with and I mean I don’t have loads of money. A fair amount that needs to be ready to go.
SAM: I wrote a blog post not that long ago called investing in the light of Brexit saying I’m putting a large amount of my money instead of into traditional investments like this into places I can get access to it really quickly, so like peer-to-peer lending with kind of a 30-day access because I think that I can get a better return by spotting opportunities, building a business around it or finding arbitrage opportunities especially with something like brexit where there’s going to be a lot of turmoil and a lot of opportunity then I would by just sitting in the FTSE 100 which seems to be quite overpriced and who knows what’s going to happen? A lot people predicting a financial crash?
BEN: If the whole end goal is like living off investment income maybe you should spend a bit of time trying to like learn more about investing rather than just in a tracker.
SAM: I don’t know well most people invest their money in houses, that’s what people think is a good investment. Middle-class people. When I tell people what do I spend my money on and I say I put it in stock market they’re always a bit oh that’s a bit gambling isn’t it and they think if they have spare income they’d want to buy a house and rent it out.
BEN: Although I think probably less so now because the prices are so expensive and the tax way that they’ve set things up isn’t any good anymore.
SAM: But people see them really expensive and that they weren’t that expensive that long ago and I think that makes a good investment.
BEN: Yeah which would be what I’m saying about maybe if you’re gonna gamble your whole like life on investing, maybe you should learn something about investing.
SAM: There’s also something we haven’t spoken about which is if you’re working in a normal job you get a pension whereas we don’t have that being self-employed.
BEN: Yeah and that goes to our I was going to mention this earlier, I don’t think I think in an accumulating money sort of way, I think more in a creating income way so some people will say like oh you’ve not got like an official pension, what are you gonna do when you’re 60? But I feel like as long as I keep starting businesses that are creating income that’s relatively passive then by the time I’m that age I should just have money coming in from things. So you’d still be getting an income as if you’re working anyway.
SAM: And do you ever see yourself retiring is the thing.
BEN: No probably not.
SAM: Me either, because I’m already doing what I want to be doing and what I want to be doing might change but I’m sure I will still be creating stuff and building income sources. So, back to the original question. Is financial freedom, financial independence the ultimate end goal?
BEN: I wouldn’t say it should be the ultimate end goal and I’d definitely say retiring early shouldn’t be the end goal. I think that’s the more dangerous idea. I think people do need some sort of big long term goal to be aiming towards.
SAM: You should have financial goals and that might not be to earn as much money as possible in a short period of time, because you might have other goals. But you should have some sort of goal and some sort of strategy behind it. Especially because you want to have redundancies in place. If I became really ill and I wasn’t able to earn money for myself, I want at least some sort of runway.
BEN: Yeah because we don’t know what’s gonna happen and part of the thinking behind financial independence is like I am completely in control of everything. I’ve set everything up so that at this age I have this amount of money and like I know everything that’s going to happen and the stock market’s gonna make this amount each year and it’s like, this lining everything up in your head where you think that it’s all gonna work out, yet it never does because that’s not how the world works. You don’t want to get too much into that way of thinking because then when something bad happens you’re completely destroyed by this is messing up my plans. But the world doesn’t work on your plans.
SAM: And there’s probably something about living in a mindset where you were talking about earlier where you’re focused on trying to create things and create new income streams. If something really bad happened and you lost everything and had to start again, you could do that whereas if you spent your whole life with this grand plan and then suddenly something happens because people do lose all their money through no fault of their own. That does happen. Nothing is nothing a certain. Well alright well on that morbid note, let’s end the episode thanks again Ben that was interesting yeah and goodbye.
There is a conflict over how you should be spending your time as an entrepreneur. Some people will say that you should focus on just one business, pour your all in to it and make it the best it can possibly be. But others will tell you that is too risky. Diversify. Build as many income streams as possible.
Well, it is not quite as simple as saying one option is always better than the other. In this episode, we talk about how to balance your goals, your personality and the opportunities available to help decide if you should be building multiple businesses.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
01:18 – What’s your full time job?
02:52 – Focus or breadth in business depends on temperment
04:18 – Why Sam decided to focus on multiple income streams initially
06:00 – Self-employment security vs. employment security
08:18 – How many sources of income does a typical millionaire have?
10:29 – Identifying personal goals
13:35 – How Emma decides what to focus on
16:41 – Emma’s experiences as a freelance marketer
19:24 – Lapses in work load
23:50 – How Sam would approach restarting his businesses
SAM: Hello and welcome back to another episode of the lazy entrepreneur, I’m your host Sam Priestley and we’ve got Emma back.
SAM: It’s been a bit weird the last few episodes, in fact I have recorded about five or six in the last few weeks without you on it.
EMMA: I’ve been missing out.
SAM: They haven’t been as good without you on them obviously.
SAM: So welcome back to our regular broadcasting. Today I wanted to talk about is it better to build multiple income streams or focus on just one. That’s a topic I’m sure you’re very interested in.
EMMA: Very familiar.
SAM: We’re 30 episodes into this podcast and we haven’t spoken about it.
EMMA: And it’s a key part of our life.
SAM: It’s quite an interesting discussion, and it’s not an easy answer.
EMMA: No and it’s quite a weird way to live your life. I mean I always complain to people when I talk about the gin business, they say oh is that your full-time job and I find that really frustrating because there isn’t really, it’s not my full-time job when you compare it to the hours I put in at PwC but it does provide income and I do other jobs, so people don’t really get their head around the fact that you can do more than one company or job at one time.
SAM: Yeah people ask me what I do, I always say a bit of this, bit of that.
EMMA: People don’t understand.
SAM: Come off like a wheeler-dealer but that’s not really accurate. It’s always one of the criticisms I get quite a lot, why you always start new businesses? Why don’t you just just focus on one? If you’re always building businesses than you’re neglecting other ones. If you build multiple different businesses then you’re never really gonna give any single one all the attention it deserves.
EMMA: Which is what you want to do, you don’t want to do one business that you focus on forever. You want to do loads of different things and it constantly changes because you get bored of one business. It doesn’t mean you stop, you completely neglect it, you still carry on ordering more stock or writing more content or whatever but what drives you, what gets you out of bed in the morning is something new.
SAM: Yeah so there’s a few things there, one is it depends on your personality so if you’re like me and that’s what you enjoy doing, starting new businesses, curious, get bored quickly, don’t really like the drudgery of maintenance of a business but do really enjoy coming up with ideas and getting excited and designing new things and launching stuff then obviously doing multiple businesses suits me quite well, which then kind of brings onto a second part it depends on your goals. If my goal was to make as much money as possible, would I be doing something different? Would I just be focusing on the highest expected profit business?
EMMA: There was the gambling and you made a conscious choice to stop doing the gambling.
SAM: Yeah well in this podcast we talked a lot about lifestyle as well as it’s the lazy entrepreneur and the goal is not to become a billionaire yeah.
EMMA: And I don’t think a lot of people can understand that, they think well if you’ve got this brilliant business idea that has this potential to earn you a million pounds each year, why don’t you do it? But you consciously choose not to do that.
SAM: There’s more to it than that, there’s also some businesses do you seem to hit a point of diminishing returns where there’s not an obvious thing you can just do to push it to the next level. I suppose gambling is a good place to start really because that’s when I go into the multiple income streams and the reason was for stability and protection. I started with match betting which is when you take advantage of free bonuses and offers that casinos and bookies give to new customers, so that means that the entire income stream is reliant on bookies existing, gambling not be made illegal, the, letting me play there which, when you’re a profitable player doesn’t always happen. And them offering bonuses, anyone of those things could have quite easily have changed which then that business would have shut down and then I would have been left with no CV, no career so that’s when I got interested in trying to keep myself safe by starting loads of different businesses and not just businesses but other income streams so investing quite a lot of money to get investment income, passive income which is the main advantage people talk about when it comes to having multiple sources of income, is the safety of it, if one of them fails then you’ve got other ones to fall back on. I think there’s something about being an entrepreneur, a business owner that makes you very conscious of the risk and the danger of whatever it is you’re doing collapsing.
EMMA: Yes but at the same time you’re really you’re not risk-averse, the whole the thrill of it is that actually around starting new businesses is that they might potentially fail and by having multiple sources of income and multiple businesses to some extent it doesn’t matter so much if one fails but that kind of thrill of well this might really take off or actually it hasn’t really taken off but I still learned something, it’s all part of the drive for you.
SAM: I think it is the balancing of risk-taking with being sensible and balancing your goals for your life outside of your businesses, but when you have a job, people in a career they don’t think well what if I get fired and lose this job. I better go work at Starbucks on the side or something.
EMMA: No and one of our friends has just been fired in a quite secure professional services role and we kind of sat around thinking, well what are they supposed to do next? Do they just go to the next professional services and get a job or is it now gonna be hard for them to get job because they were fired.
SAM: But then again if you’re working in a career like that you can’t say well I am only gonna work two days a week at this place, two days a week as a lawyer, and one day a week as a banker in order to keep yourself secure and you just can’t do that you get nowhere.
EMMA: And of course your response to that situation was well maybe it’s time for a career change.
SAM: But what why would we think the correct thing to do if you’re focusing on a career is to go 100% on one career one job rather than diversify whereas when we talk to people starting businesses we’ll often say, think about building multiple income streams so you’re safe. It’s probably something about the the monthly variance and change in how the business is doing that makes you very aware of danger. You’re getting your monthly paycheck it’s only when you get fired that that suddenly changes and you don’t see it going down a little bit than a bit the next month and down a bit more.
EMMA: Definitely like take any of your retail businesses so whether it’s table tennis bats, whether it’s gin you look at Christmas versus January and to a certain extent February like this they’re polar opposites.
SAM: Yeah there is seasonal variant, there’s also like output on my behalf variant, there’s stock issues, there’s extra competition, stock issues, there’s unforeseen disasters. I remember there was an earthquake at a port that had a bunch of our stock in it at one point. How do you prepare for that?
EMMA: But then the things that every year you always say to me, oh it’s Chinese New Year, no work gets done and it’s kind of like you say it as if you kind of set on Chinese New Year day. You don’t really say it like oh yeah we planned that the stock in from China is going to slow down. It just kind of happens each year.
SAM: So let’s take a step back and think about these two options that we’re often given. One is to really diversify and try and build up those different sorts of income. You might have heard the saying that a typical millionaire has seven sources of income. Sounds like a load of rubbish to me, but that’s kind of the advice that a lot of people put out. You should be aiming for seven for some reason.
EMMA: How many do you have?
SAM: I don’t know. Probably about seven seven or eight and then the other side is that no you should just focus on one thing, give it your all, work as hard as possible, and just try and make that thing the best. So on one side if you’re building multiple income streams, you’re kind of safe, provided they kind of work out, then if one of them fails, you have the stuff to keep it going. We’re in a nice position where if any one business fails completely it doesn’t have any impact on our day-to-day life but then on the downside, you’ve also got this risk of half assing it and never actually making any of these businesses or income streams any good. There is some benefit to just going a hundred percent on one thing and trying to make that work out.
EMMA: And I think actually if you sat down and looked at all of your businesses from a financial perspective, there might be some changes, and there might be some quick wins. Spend a bit of time doing that and actually has quite a big impact on on your salary that month but that’s not that’s not how you live your life.
SAM: Well it depends on your goals isn’t it. So it brings us on to I think that the free air that you mentioned earlier, your goals, your personality, what opportunities are available, you need to balance all of those to work out how you should be spending your time. It’s not simply saying you should focus on multiple income streams or you should focus on just one, you’ve got to balance these three criteria and work out what’s best for you.
EMMA: Yeah because at the end of the day the goal is that your lifestyle is your work. You feel like oh I’ve got loads done today, I feel really motivated, I feel like I’ve achieved a lot.
SAM: Yes that is definitely one of my goals, and one of the key goals at the moment, but goals can be both short and long term, they could be let’s say a family member who’s going to do some problems and we needed to earn a bit of money to support them then your short-term goal could be, well I need to earn enough money to pay for this, or let’s say that something happened, we had a huge bill to pay, we’re in an accident and we need to make everywhere wheelchair-accessible. That’s gonna cost a fortune and I’ve got this barrier to overcome or maybe a goal would be if you’re doing a business that the purpose is not just to make money but is also to do some sort of good in the world then that’s a different type of goal isn’t it. That’s saying actually I’m gonna focus on this quite a lot because I’m prioritizing the work that this business is doing over my own life.
EMMA: Yeah because it’s having an impact on my community or certain group of people or whatever.
SAM: So we’re in a situation now where we’re kind of focusing the work we’re doing around our lifestyle goals. Which is kind of continue living the life that we are living at the moment.
EMMA: Yeah the life we want to lead.
SAM: But we also have other goals, so one of your goals is to get better at cooking, to get more into food and drink, to network and meet people who you find interesting in that industry, to become a bit better known in the industry, to be thought of as someone who’s not just an outside amateur looking in but actually part of that industry.
EMMA: Yeah and another goal is as it’s coming up to International Women’s Day is to encourage other female entrepreneurs. So to share my experience of quitting the 9-5 and starting my own businesses. Show the realities of it and to encourage people.
SAM: And the way you’re doing that is not by focusing on one business, but by doing a little bit of all the stuff that interests you from doing supper clubs, to doing the gin.
EMMA: And networking.
SAM: And networking not with a sole goal of pushing one of those businesses but also, yes to help those business, but also to push you as a personal brand and you as a career person.
EMMA: Yeah and I get a lot of validation from networking. That I absolutely have made the right decision to quit my 9-5 and I’m really happy.
SAM: So I think your goals definitely mattered there, but when it comes to what do you spend more of your time on your supper clubs or doing the gin that’s not just down to your goals. There is other reasons, there is other things in there. Why would you spend a day cooking for the supper club when you could spend that day phoning around 100 new bars to try and get our gin into them?
EMMA: Well that’s a good question. So I try and strike a balance and I find it quite easy at the moment because the supper clubs, I control how frequently I do them or how infrequently. I try and spread them out and they are very timely so I see if I have a for example if I have a supper club today I would have spent the last few days focusing on the supper club and not the gin and then when I don’t have a supper club on a Friday, I then focus on the gin. So I don’t necessarily plan it to have a balance, but I guess I have planned it in that way.
SAM: And I think the balance you’re striking there is not a balance of your overall goals. It is a balance of your personality. And by that I mean they’re very different businesses so supper club but you’re running completely on your own, you have the autonomy, you don’t need to tell us what you’re up to, you can experiment, you don’t need to wait for us to approve an idea, or anything like that.
EMMA: Which I love.
SAM: Which you love. You get instant feedback. You do it, you put it on, it’s quite stressful while it’s all going on. Then the end the day everyone tells you how great it was and gives you an envelope full of money.
EMMA: Yeah it’s lovely.
SAM: Yeah you got instant gratification, you’re learning some skills, which are good for your overall goals, you’re getting additional income, whereas Pipehouse Gin is the complete opposite business one we’re all profits have been reinvested into it at the moment. It’s very hard to give an exact quantifiable idea of how well the day has gone whether it’s being productive or not. You could spend a day going around bars and get nowhere, or you could spend a day going around bars and everyone loves it.
EMMA: Yeah I assess a day by how good the news is for that day, so it could be for example a brand new bar has just emailed us to say I’d like to place an order. It could even be for one bottle, but that’s still good news. There could be we’ve had loads of breakages today or something’s been cancelled or whatever it is.
SAM: What you’re saying now is that you’re mood is linked to how that business is going. If things go bad, and that is your only business that it’s the only thing you’re focusing on then that could mean all of your mood is tied to that or a large part of it.
EMMA: And that’s why I love the balance of the supper clubs because if I’m frustrated with something with the gin and it could be the decisions taking a long time, I then flipped to supper clubs and I’m like oh right I’m gonna go off and do this because I don’t have to wait for anyone to make a decision on this.
SAM: When you get annoyed at me you can go off and do something doesn’t involve me.
EMMA: Yeah exactly.
SAM: Let’s go back a couple of years to before we were married where having immediate income coming in was very important. And where you were doing freelance marketing. So you were doing something you didn’t particularly enjoy that much, there was quite a lot of work, and was quite draining. But something you could have spent all day every day working on really hard but you couldn’t sum up the motivation and energy to do it.
EMMA: Yeah I mean and there were so many elements of it like from the actual business development side to trolling through up work trying to find relevant projects and then applying for those projects, and then doing the interviews, and then there’s the whole bit of balancing my work load so making sure that I can deliver all the projects and then make sure that I was getting paid mmm. The whole thing was absolutely draining and although I found it quite liberating that I could control what I was gonna deliver and how I delivered it, it was very stressful managing ultimately it was to pay my credit card bill at the end of the month and I knew because we always pay it six weeks after, I knew how much it was and I found that very stressful.
SAM: Well it was something that the nature of the work meant you couldn’t do that many hours of it. Whereas when you’re working on the supper club, or you’re working on gin now and then balancing that you can actually do a lot more hours in a day.
EMMA: 100 percent year.
SAM: And you started doing multiple things while you were still doing the marketing, because when you ran out of energy for writing proposals, you could then think about, you could then decompress from that by doing a more creative business. It would still have long-term benefit for you.
EMMA: Yeah which was ultimately the supper club.
SAM: Doing cooking classes, personal development things, even when we started work on the gin you were also doing a bit of the marketing stuff back then as well but it was a way that you could by building a multiple income stream you weren’t taken away from that freelance marketing stuff, you were so drained by the freelance marketing stuff that you couldn’t do any more of it. So then you started to focus on some other things.
EMMA: Yeah but then there was definitely a conscious decision when the gin was kicking off so once we’d spent quite a long time on the strategy, the planning and we’d agreed what we were gonna do and it was time to actually launch it and kick it off and there was a lot to do, I made that conscious decision, right I’m gonna stop doing the marketing. So I love doing all this gin stuff, I’m getting a lot from it.
SAM: Well I think that brings us on to the third point, so we’ve done goals and personality so far and the final one is opportunity. You started working a lot harder on the gin and less on the marketing when there was more opportunity in the gin, while we were still waiting for our labels get printed or whatever and there wasn’t much that could be done, there wasn’t that much work to do.
EMMA: That was so frustrating.
SAM: When you’re setting up a business like that, waiting for licenses to arrive in the post, all this kind of stuff, there sometimes isn’t that much work to do yeah which is when you go work on the other things yeah and my most profitable business is my table tennis business but we hit diminishing returns quite a few years ago where we were the best selling table tennis bats in the UK, we were doing really well across the rest of Europe and in the States and Canada and places like that, and we kind of got this point where we like we can put in loads more work and get a small increase in sales, or we can put in hardly any work and it continued being how it is and making good money.
EMMA: And you can do other stuff.
SAM: I will do other stuff so we decided it wasn’t worth putting in all that extra effort, let’s keep the business how it is, maybe a little bit stagnant and not growing but you know still making good money and paying us a really nice salary and then focus on other businesses.
EMMA: And that’s also a good point because of the way that you like to set up a business is that you love the beginning bit, the creativity, the strategy and loads of time and energy goes into it upfront and then you develop all of your businesses to be quite low input as they run on a month-by-month basis and and that’s a very purposeful thing for you so that it does mean per month you could choose to do a bunch more hours, or a bunch more blog posts but at the same time, you don’t have to to get that regular income and for it to continue to run. It’s interesting though because if you compare the businesses that you run at the moment to say, a coffee shop, they couldn’t be any more opposite in terms of input. So like the amount of work so say you owned a coffee shop in Tunbridge Wells, the amount of input you have to put in the beginning of the project and during the businesses all day every day, it’s relentless.
SAM: I think that’s a good example of why you need to include opportunity in your calculation before you should spend your time doing because when I did have a coffee shop, it was something where there wasn’t really any opportunity. Something that required a lot of work and where the max potential wasn’t particularly high whereas when you compare that to say the gin where we could potentially sell 1 million bottles a year, we’re not limited by the number of people walking past our little shop. It’s quite different.
EMMA: The opportunities are absolutely there and the markets big enough.
SAM: And with something like a coffee shop, I was tied in by staff and salaries, we’ve got monthly rent we’ve got a bunch of other stuff.
EMMA: Yeah you’ve got a lot of responsibilities that’s the other thing isn’t it with a lot of your current businesses you don’t have all those overheads and those responsibilities.
SAM: So let’s sort of summarize a little bit. Now there are exceptions to the rule but generally if you want to make loads and loads of money, focusing on just one just one business is the way to go.
EMMA: But it is risky.
SAM: But it is risky and you could fail, whereas if you’re able to build multiple income streams, I don’t mean build them all at the same time, I mean you build one, get it to a point where it is earning a nice bit of income, then go build another one, actually the risk of everything falling apart and having to go get a job is quite low.
EMMA: Say today you used all your experience and your knowledge so far in setting up businesses and someone gave you, I don’t know, ten thousand pounds, twenty thousand pounds to start a new business as if you got all the time the world, you haven’t got any other business you need to focus on, what would that business be and then what would be their additional income streams that you would add to that?
SAM: I would set my goals and my goals would be to get enough money to support my lifestyle yeah as quickly as possible and then once I was earning enough money to support my lifestyle it would then be to be to build in stability with that life. So get to the income target and then make sure I stay at income target.
SAM: So how would I do that? Well I start off by finding a business or income stream that earns money very quickly, and I’d still go back to the gambling for that, matched betting which I’ve done podcasts on before is a very easy way to make a few thousand pounds to begin with and you can take out ten thousand pounds and double it quite quickly. Now the thing about matched betting is that you do end up spending a whole lot of time waiting around for money to be paid out, so once you’ve got your winnings, you do a withdrawal from a bookmaker and they might take four or five days which is where having a small liquidity, a small cash flow does matter but that means that we would then have a bunch of spare time which would then start focusing on longer-term projects.
EMMA: So maybe something like an Amazon FBA product.
SAM: Maybe a product like an Amazon business, maybe a blog or a website and it takes time but very little monetary input at the beginning.
EMMA: And it could be something on a niche that you were really into.
SAM: And something like that I won’t make any money for six months to a year but it’s something I want to start working on and can at some point provide one of those extra income streams, so that’s what I do and I’d push each one to the max. You know at the Amazon business once you developed your product and you’ve chosen your prototype and you put in your order for a thousand, you’ve now got a six-week wait until they finish that, so what are you going to do for six weeks? Well I’d go and work on something else. Once I was earning money, once I was getting money above the income I needed to support my lifestyle, I would then start putting that money into investments, stuff that would earn me an extra source of income? I’ve already recorded this podcast on financial independence but it hasn’t been released it yet so that will be coming up, probably the next one after this. We talk about this quite a bit and one of the things about financial independence is you build up these passive investments, so stuff like stocks and shares or property or whatever that will eventually cover most of your your expenses just from the income of those, so that’s kind of what I’d be working towards and I’m sure what I was doing would change based on the opportunities that present themselves. That’s probably a good place to end this.
EMMA: I think so.
SAM: There we go. We had a little chat where we’ve talked about multiple income streams versus focusing on just one, we said it’s not quite as simple as saying that multiple income streams is better or that one income stream is better. It depends on the opportunities that are around you, it depends on your personal goals and it depends on your personality. Generally, though multiple income streams are good for stability and for making sure you’re not gonna lose everything, whereas the single income stream, a single focus of your attention is good for making money quickly or building a business quickly, but is a lot more risky. And on that note, thank you very much for listening if you have any feedback, please email me at hello at sam priestley, the show notes are all at sam priestley dot com and you can click on the podcast tab at the top in order to read about them, and until next time goodbye.
Dan on creating a positive work environment:
“The more that you make the workplace an enjoyable place to be, the less you think about how much you’re getting paid”
A brainstorm on how to learn the skills of being a good boss. We discuss everything from the hiring process to discipline, office culture to employee welfare.
On this episode Sam Priestley is joined by guest host Dan Lim. Dan is not a natural leader but puts a lot of work into his personal business development and has been working hard to improve his management skills. He now runs a team of seven at his software firm and has some great insights and wisdom. Even better is that he sees his development as a work in progress and is actively looking to improve his skills as a manager.
As a terrible manager myself. Being both a people pleaser and an introvert, I found this conversation really useful.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
01:10 – Improving life 10x in in 10 years
02:40 – Soft skills can be learned
04:01 – Dan’s experience with management and being a boss
05:45 – Outsourcing work versus hiring in-house
06:35 – Stanford University experiment: The Tappers and the Listeners
09:30 – Fire quick hire quick
10:25 – Dan’s realization 2 weeks into a 6 month hire
12:01 – The similarities between Dan and Sam’s project
14:33 – Difficult business staff decisions
17:39 – Being the boss
21:56 – Active rehiring versus hire-fire model
23:58 – How do you build the culture that you want in an office?
25:57 – Benefits of a personal vision statement
27:54 – Carrot or stick reinforcement
30:49 – Why to avoid assigning open ended tasks to employees/contractors
35:00 – Thoughts on improvement
37:55 – Asking incomplete questions to gauge initiative, intelligence, and clarity of communication
40:15 – Recommended reading
SAM: Hello and welcome back to another episode of the lazy entrepreneur I’m your host Sam Priestly and today I’ve got a guest has on and that’s Dan Lim.
DAN: Hey how’s it going.
SAM: I thought Dan would be a good person to get on this episode because I want to talk about how do you learn how to manage people, how do you become a better leader, and become a better boss. Dan is a bit like me in that this is something he’s worked quite hard at but I think he’s also doing a bit better than me because while all my real attempts to manage people have been slight failures, I’m not really doing much at the moment, he is managing more more people and his business is growing. And also we’ve been friends for ages, we used to live together and whenever I get together with him we always have a great chat.
DAN: Yeah we’ve known each other for about 11 years now, it’s gone pretty quickly.
SAM: Yeah hopefully hopefully better now. Is life better now than it was 11 years ago?
DAN: Yeah I’d say in fact it’s funny that you bring that up, I was thinking about it yesterday that my life is ten times better now than it was even five years ago.
SAM: Really ten times? Has every year been better?
DAN: Yeah I think so, I feel like I get a lot more done in each day, now I get the same done in a day compared to what I’d get done in a week.
SAM: Well this is something that’s got nothing to do with leadership and managing people. When we first moved to London, we would both mince around all day, we’d go for coffee, get up late, we wouldn’t really have much structure and I still don’t have much structure but you’re now working quite a traditional day.
DAN: Yeah really have shifted from kind of being a night owl and staying up till 3:00 or 4:00 every night to now mirroring a normal person’s working schedule of getting into the office for 9:30, doing exercise in the morning.
SAM: Yeah because not only do you get into work for nine thirty be also going to the gym beforehand. You voluntarily have done something that I’ve tried my best to avoid, the complete opposite to the lazy entrepreneur podcast.
DAN: Yeah you started off by saying that we’ve got a lot in common that we’re very similar but hasn’t seemed that way so far but I think I would agree that generally we are very similar in many ways and also I’ve really enjoyed listening to your podcast so far so I am excited to be part of it and hopefully contribute a small bit.
SAM: Thank you very much, well one way we are similar is I think we both agree that soft skills can be learnt, that it’s not just stuff like maths or programming or languages or music. The sort of tangible skills you can measure yourself getting better at. There’s other things such as managing, leadership, I think that even just being a normal human being, being a ble to hold a normal conversation with people.
DAN: Yeah well there’s a book, how to win friends and influence people, and there’s a whole book on that which kind of suggests that you can learn these things as well as hard skills. Yeah I
SAM: I suppose maybe that’s true because there I think there’d be more books about management than there have been about any other topic but do people do people work at becoming a better manager?
DAN: I certainly say that I have and in fact that’s one of the ways that I feel that my life is ten times better now than it was even five years ago in that, for some reason, maybe two years ago it occurred to me more that you can actually specifically try to improve your skills, improve the way that you are at work, you identify having conversations with people or dealing with conflicts as an area that you’re weak at that you can go out and find a book or a course that deals with those things and that’s something that have gone out and tried to do myself.
SAM: So tell me a little bit about about your experience with management and being a boss.
DAN: I found it difficult and I still find it difficult and say one of the areas that I’m still very much working on is not being a people pleaser and being prepared to do things that people wouldn’t like and there’s actually a book I’ve got my own. I think it’s called something like the courage to be disliked so yeah that’s some way to read list.
SAM: That’s funny I literally written down here you know one of the reasons I think I’m not a great leader or manager is because I’m an introvert and I’m a people-pleaser. Those two things, it’s something about wanting to be friends with people that is in some contrast to being a boss because you run a company with a friend. There’s two of you and you’ve got how many employees do you have in a moment.
DAN: So there’s five employees so 7 of us in total and yeah we’ve been running that business for about two and a half or three years now.
SAM: Because you started off if my memory serves by outsourcing those roles to like an external company you sort of did a tender and got a few different companies to bid on the contract and then you didn’t really have much success with that and then decided to move to having people in-house to work on it.
DAN: Exactly so maybe a way again that we are similar is that I tried to procrastinate and get out of doing some hard work the hard work that we tried to get out out of was hiring and managing people so also to take a step back, so it’s a software company, so we tried to avoid having our own team, we hired a software consultancy instead to build our our products, and yeah we tried to cut corners. We thought that we could give them some fake specifications and that magically somehow they would give us what we wanted and it definitely didn’t work out that way.
SAM: I think there’s something about hiring a contractor like an outside company that’s an an expert right that means you feel like you don’t need to do the hard work of monitoring exactly what they do. When I have hired them before you have a project manager from their side who often doesn’t have a clue what’s going on. It could be some programmer four or five rows back who you might never speak to.
DAN: Yeah because you don’t have the same quality of communication that you have when you have a team in-house and actually that reminds me of something I definitely wanted to bring up when you mentioned that would be discussing about this and then and it’s this experiment done at Stanford University called the tappers and the listeners and what they did in this experiment was they got half the people to be tappers and half the people to be listeners and they got the tappers to tap out to tune to some well known tunes, so what happened in this experiment is they asked the tappers what percentage of tunes the listeners would get right and the tappers thought that the listeners would get 50% of the tunes so one in two whereas they actually only ended up getting one in 40. So the principle here is that as someone giving information, we massively overestimate how much of that message gets across. That problem gets worse when when you’re outsourcing.
SAM: It’s all about chinese whispers right.
DAN: Exactly and you have less of a chance to verify that the other person has understood the message you’re trying to get across and that’s the benefit of going through the hard work and effort of hiring, bringing in people with your own team.
SAM: Because there’s two sides on that, one of them is getting a firm to do it all for you, you feel like they should have done all the hard work already, they should have a really good project manager, they should have found the best program or whatever, they should know the questions to ask you in order to get it right.
DAN: Yeah the software consultancy we worked with, the product manager really didn’t do a good job at all you’re exactly right we had that thing where we felt that we’re hiring these guys. Of course this guy’s gonna get do a good job yeah and he didn’t do much of a job at all in terms of understanding our requirements and this project went on and on and on and actually another thing that we learned from this is that we should have made a decision much quicker to abandon it because the very first bit of software that we saw that they built really was terrible and they had kind of indicators that they didn’t know what they were doing. They didn’t understand the current best practices that it’s such a difficult decision to make and again just trying to get away from doing any hard work and making any hard decisions and we let this project roll on and on.
SAM: Yeah that’s true isn’t it because we both come from a computer science background we studied at University so we know when something is just not gonna work out. I’ve definitely had these this exact same experience where someone’s given me a bit of software and I kind of looked at the code and been like terrible.
DAN: This person doesn’t know what they’re doing. At that point you should instantly say that you’ve got a huge scrap of evidence that suggests that this person isn’t suitable for the job but it’s a difficult decision to then make so quickly but that’s what really needs to be done.
SAM: There’s a Silicon Valley mantra isn’t there that you should hire quick and fire quick and is that kind of where you went wrong then with those contractors.
DAN: Yeah for sure for sure.
SAM: It was fine to hire them like you didn’t make a mistake there well maybe you did but the real mistake was sticking with them for six months a year or whatever when you should have at that first deliverable realized this wasn’t going to work out.
DAN: Yeah could’ve so the whole the whole project was meant to take three months originally, which is stupid for many reasons but we won’t go into that because quite rightly you were raining me in for jumping around too much so I’m raining myself back in but as you were saying a minute ago about how you can identify very quickly that someone doesn’t know what they’re doing, we should have seen that within two weeks because when we saw this first bit of software that was that should have been enough. I haven’t learned anything since then I didn’t know at that point even two weeks in that they weren’t the right people.
SAM: Well how long did you get.
DAN: Either six months to a year that we ended up working with them and yeah we should have made that decision very quickly within within two weeks.
SAM: And did they finish the project in the end.
DAN: After the three months which we’d kind of paid for so we paid a fixed amount for a fixed deliverable. After three months they sort of took more manpower off the project so it kind of dragged on and on and on until we finally had to say enough was enough and that’s when we moved over and started hiring our own developers.
SAM: So did did you end up paying them?
DAN: We did.
SAM: And did you pay them more than the fixed amount you’d originally agreed to?
DAN: No we paid them the fixed amount.
SAM: Yeah but then once you factored in all the extra time you spent and the losses and the earning.
DAN: And the opportunity cost.
SAM: Yeah everything involved with it and then you got someone in-house and were they building the exact same project again?
DAN: Well that’s another decision that maybe we should have made then is to just start the project again from scratch but we got them to carry on the shaky foundations and even today maybe four or five years later from when we first started working on this bit of software, we’re still on those terrible foundations but again it’s always difficult to just say let’s start again. I know from one of your previous episodes when you talked about your tech startup, how you basically had to throw it out and do it all yourself in a couple of days.
SAM: It was actually the exact same story, started off by hiring a contractor who worked on it this contract was actually fine, but then when we wanted the follow up work he just disappeared and so we made a decision. We got people in-house and we made a decision to just continue working on this foundation that someone else had built but we didn’t really understand and it was terrible and eventually it proved to be untenable and we have rebuilt it from scratch and it wasn’t a complete rebuild, but we should have rebuilt from scratch in the first place it was absolute nonsense. It’s the same story and I imagine there are so many computer programming projects that are exactly like that but it’s probably not just true with computer programming. There’s probably so many other areas where because you’ve hired someone because you paid someone, you’ve committed to someone, you’ve almost bought into them.
DAN: The sunk cost fallacy there.
SAM: But there’s also the emotional cost of having to break that relationship which.
DAN: That touches a little bit on the sort of people-pleasing side of things as well.
SAM: Yeah exactly. How do you tell someone they’re fired. It’s alright to say hire quick fire quick but how do you actually do that firing?
DAN: Especially when in the hiring process, you probably should have tried to build up some kind of relationship with them, a personal relationship and you try to become part of each other’s lives and spent so much time together. Then it’s quite difficult to just say, I’ll see you later, it’s over.
SAM: Especially if you got to know them, their family, you know the financial problems they might be in and the consequences to them of losing this job and all that kind of stuff. There’s so many layers that by being someone’s mate means that you have a very different, it might not be best for your business but you want to be best for them. It’s weird and one of my businesses, I don’t want to talk about which one because I don’t want to tell everyone who this person is but one of the key people in the business had a mental breakdown while they were working for us and it meant they couldn’t work anymore so we had to make a decision, do we continue paying this person, it’s a small business we don’t have any money. Do we keep paying them their salary while they can’t work? Like where does the cold-hearted this is a business versus we care about this person, where does that intersect? And they were off for about six months but it was one of these ones where we kept paying them but then all the other staff felt cheated that this person was getting paid for not working. They didn’t really know all the details of the mental breakdown or whatever, how do you balance all that when you’re kind of friends with someone at the same time?
DAN: You have to spin a lot of plates and there’s only so many moving parts because it’s not only your relationship with that one person which is complicated enough but then how everyone else feels about your relationships with everyone else, if that makes sense. So many relationships and that grows and grows and grows as you add more and more people to your team.
SAM: Yeah and you’ll probably a bit like me where you overthink these things and people would just be like whatever listen that’s the right thing to do let’s do it.
DAN: We’ve got a big meeting tomorrow our whole team is working together all day, but that only got decided today that we were going to be doing that and one of my colleagues and I got this boxing session booked in at 12:30 and it probably means that we’d have to take an hour and a half to two hours out of our day to do that which normally would be fine because we’re quite flexible and if you get the work done, it’s fine but now we’ve announced that we’re going to be working together all day. It’s quite inconvenient to have to go to this boxing class and I’ve been agonizing for ages like should I make us cancel it or I mean it but the obvious thing is yeah of course cancel it is it’s going to be disrupted to the day it sends a bad message to the rest of the team if we take such a big chunk out of the day. I don’t know why I haven’t made that simple decision. It seems so simple saying no it’s you but it’s just that problem of trying to be a people pleaser.
SAM: I think it’s like it’s someone who’s going through relationship problems with their boyfriend or girlfriend tells you what’s going on. Normally you can see the obvious answer. I think it’s a bit like that like once there’s a relationship involved it changes the dynamic quite a lot like whether a vowel whereas even if you talked to someone else there’s an obvious answer to things and how do you abstract yourself enough to always make the right decision some people break up from a relationship the advice that most people give is don’t ever talk to that person again and everyone says that until they were in that situation.
DAN: What was weird though is that I even had have had this self analysis about this situation earlier today so I even had this conversation we’re having now to myself and made the same conclusion and still dilly-dallied and deferred the decision until tomorrow morning.
SAM: So you haven’t made a decision yet.
DAN: No I discussed it with with my colleague earlier and I said oh yeah we will decide in the morning.
SAM: And you’re saying we’ll decide rather than I’ll decide yeah when you’re the boss, what has it got to do with him. Let’s talk a little bit then about hiring the right people, I’ve got this idea if you’re a really good manager it doesn’t matter if the people you’re hiring on are particularly good at something or don’t have certain skills. If you’re not very good manager, which I accept that I’m not, I need to be very careful about who I hire, so VA is virtual assistants this is something that Tim Ferriss and a lot of the other gurus talked about that you know get someone cheap from somewhere like the Philippines, you give them 40 dollars a month and they do kind of all the work that you don’t need to do you know, read your emails, that kind of thing so I’ve tried doing that a few times and hiring VAs for things from customer service to more recently editing the blog and doing updates that sort of thing and it’s never really worked out, and I think that’s because I was basically shopping by price rather than the skill set and I haven’t just been a very good manager. I’d say one of the main problems I’ve had with all of them is that they would do the job I’d give them, they wouldn’t do it particularly well, and then they wait for me to give him another job, so these people are working eight hours a day and I don’t have eight hours a day worth of jobs for them right so for me if I wanted someone to do that role given the personality that I am I would need someone who has the creativity and the motivation to go off and find, there’s a million and one things that could be done on my blog for instance that if I asked Emma to do this role, my wife she would like be busy all day every day because there’s a million and one things to do, she could be reaching out to people, trying to get advertising, trying to get links to the site, whatever, but when you hire someone who doesn’t think like that, it’s a bit different. So for me hiring someone who has that initiative is quite important whereas I think if you’re a great manager that’s a bit less important.
DAN: But do you think that VA exists?
SAM: Yeah I do and it’s probably I’ve talked about shopping by price but it’s probably nothing to do with price at all but it’s probably more to do with me having a better hiring process because I have kind of learned you can shop by price but shopping by price brings its own problems. You’re then getting people who are motivated by price which aren’t always the right people so it’s almost like you want to find the people who aren’t motivated by a high salary, who are motivated by something. I mean that’s really wishy-washy, do you remember we went on a holiday to Croatia quite a few years ago. In Hvar, we we met a girl who was at Cambridge and she worked at Waitrose in the holiday and you might not remember this but something that really struck me about her was how much she bragged about how hard she worked to Waitrose so she was working a minimum wage weekend job and was going above and beyond, like working extra time, she was talking about how useless everyone else was and how she would go and do their jobs for them and I remember thinking they know you’re going to do their jobs for them so they’ve been useless on purpose, right? But also that is someone who even though it’s a minimum wage job isn’t treating it like a minimum wage job, is treating it like something else so there are people like that I do think exist, that perfect VA but I probably need to invest more time in the hiring process and then invest more time in the training process of getting someone to understand what it is I want from them. Maybe VAs I had before would have fit that role if I had been better at telling them what I wanted and communicating.
DAN: Do you think you’ve learned anything since around how you might go about identifying or hiring a VA how would you assess them?
SAM: Yeah definitely I think for me hiring fast firing fast doesn’t work because I feel too bad about firing people what I do is I hire fast and then hold on to people even though I know they’re not right so I think spending a lot of time on recruitment and interviewing people and getting to know people and maybe doing try periods or probations where there aren’t the expectation that job will continue or set projects that I know that’s the end date and then I have the opportunity to give them more work if needed.
DAN: So it’s more of an active rehiring than a probation period
SAM: And I think I’ve really got to invest in them rather than look for people who are gonna take the weight off my shoulders.
DAN: Yeah so you basically don’t cut corners.
SAM: Well basically do what you do, go from mincing around drinking coffee all day with to actually working a 9:00 to 5:00 out of your own free choice yeah that’s a bit like this podcast isn’t it?
DAN: A bit yeah work hard.
SAM: But there’s a certain culture right that if you’re the boss and you’re not working hard, what motivation do the people under you have to work hard?
DAN: For sure that’s like a key part of leadership is setting a good example that trickles down
SAM: Yeah so you have an office where everyone comes in, if you didn’t really, if you turned up late half an hour each day and just kind of like wandered in and then left and you’re on Instagram posting pictures at a flat bar or something, I can’t imagine those people would be working particularly hard.
DAN: No definitely not and as a leader you’re the one last in the office and that’s gonna send them the message that you’re a hard worker and that will trickle down as well and an example of where things haven’t gone right on that front is we have we have a daily stand-up meeting which is supposed to be at 10:30 but my business partner and I often don’t make it in quite on time or we didn’t at the start and since then we’ve realized this ourselves and adjusted but by then the damage had been done and it kind of sent the wrong message to everyone else and then everyone else had the same attitude so we then had to take measures to re-establish those rules but we made things harder for ourselves then they had to be.
SAM: Yeah culture is an interesting thing it’s something else I’ve been thinking about a little bit that how do you build a culture that you want in the office and like again there’s something that that people have written hundreds of books about it’s building culture well I mean think about it a little bit, so say if you’re Elon Musk and you’re trying to get people to Mars, you’re hoping that everyone has that shared vision that people are willing to work 100 hour weeks because they have that vision of getting people to Mars and they see him doing that as well and they see him working hundred hour weeks as well and they’ve got that shared passion and then if you’re in the military everyone’s a patriot and they’ve got idea of duty right they’re willing to work really hard because of that love of country and if you’re in the city and you’re working in a law firm you work in a bank you got your eyes set on that partner position that huge income or whatever top of the ladder.
DAN: And that’s because you can see the people above you doing the same thing, your boss has got their eyes on that prize and that will trickle down to you that’s as that’s what’s aspirational in this business at this organization.
SAM: Because that is what you want right and everyone’s gone through that hazing of working really hard for hardly any money with the idea that they might get to that position or something then how does that translate to like someone helping me work on my blog.
DAN: I have thought in the past when I’ve read in in books are set the vision for your company and your mission statement but I think that you could have that even if it’s just for your own benefit even if you weren’t working with anyone else so you can have your personal vision your personal mission statement and even if you have one other person working with you, maybe that would help when you hire your VA, you can have that available then they might know what you’re about, it might help them take the initiative because if it’s just a blank sheet of paper then they’re unlikely to really be able to go anywhere with that.
SAM: That’s probably true and there’s probably truth to all the stuff that we think will motivate other people we probably need to motivate ourselves like why should I be working hard? You think of somehow turning yourself into a hard worker I’m not quite sure how. I haven’t. Like maybe if I had a great a good goal, maybe if I was trying to get to Mars I would be working really hard.
DAN: Although you did see behind the curtain there for a second for why you can’t make a 10:30 meeting.
SAM: So something I found quite difficult when I had employees was working out what it is they they should be achieving so it’s quite easy to give someone a role but how do I without doing that job myself, how do I work out whether they’re doing enough?
DAN: How do you measure success.
SAM: Right like if I give someone a job like go there and clean up the dishwasher, whatever it is I can that’s quite easy to measure. If I give them a more general job of like you should be developing this bit of software, like write in a report, how do I know how long’s given to write it how do I know whether they use that time efficiently? That’s something I’ve really struggled with.
DAN: I have as well. It’s definitely something that I’ve identified as a problem and I want to work on generally setting expectations, measuring success, and giving feedback which is another area of a blind spot for me. I don’t know if you’ve had much experience of giving feedback to people.
SAM: Yeah I’m fine with giving good feedback, it’s negative feedback I struggle with. So that brings us on to discipline carrot or stick, do you just encourage people or do you also tell them off when they’re doing badly?
DAN: I generally believe in carrot positive reinforcement works and have been shown by research that to be more effective.
SAM: So I don’t deal well with criticism. I’m very independent if someone tells me off it doesn’t it doesn’t help. I need more carrot, that’s probably not true for everyone, some people need a kick up the backside yeah and how to know when that’s the right thing so we talked a little about my tech startup before which you came and helped out a little bit with as well and there was a few people there who really just needed a kick up the backside I just never gave it to them. I’ve mentioned before, I’ve talked about a few times I’ve managed people, let’s go back to that and I’ll tell you a bit more about my experiences. So a bunch of different businesses where I’ve managed people, one of them was this tech startup where mistakes I made was I hired mainly friends and people I knew. They were friends first and employees second, totally the wrong way around, almost impossible.
DAN: Yeah I mentioned a bit earlier about trying to keep that arm’s length relationship deliberately to maybe guard against those issues.
SAM: And it kind of works when you’re friends and you’re partner’s but when it’s not equal anymore because a boss/employee relationship isn’t equal and that does make things quite difficult. So that was a tech startup I hired someone else to work on a business. I hired him on a one-year contract. Did you ever meet Pepe?
DAN: No I’ve heard about Bepe.
SAM: Yeah we wanted someone who was good at writing content for a website. We hired a maths graduate, a foreign language native math graduate who was terrible hiring all round and then terrible management once we had him because we had him on a year contract. We could have quite easily pivoted and got him to do something actually quite useful but we didn’t, we just ended up paying him for a year and he didn’t do any work.
DAN: But something I’ve learned and observed recently is I don’t think most people like having vague open-ended tasks and it might seem like an interesting proposition I would let’s have carte blanche to do whatever you like which may well be fine but only if as the boss you’re happy to take whatever you’re given but if you have a different idea than they do of what this work should look like. They do this work, this open ended task and then they give it back to you and you say oh that’s not what I had in mind, that can be demoralizing for everyone so I’ve kind of realized that this open ended task can actually be very demotivating.
SAM: Yeah and people want reinforcement that they are doing the right thing.
DAN: I was saying earlier that I feel a bit of a blind spot for me at the moment but at least I’ve identified them as something that I need to work on myself.
SAM: So how are you working on them?
DAN: I haven’t really come up with a plan for that yet, in terms of feedback I’m trying to provide that as soon as possible which I think has been a general trend in management. Best practices anyway moving away from a yearly appraisal period which when you think about it is kind of crazy that you’d have to potentially wait eleven months to hear it get some feedback about some work you did. So try and provide that as as soon as possible.
SAM: So the problem with giving feedback right is once you give good feedback what is the reward for that feedback and how do you how do you reward good work and how do you punish bad work.
DAN: I think the goal is that the task itself is the reward and that doing a good job in getting a positive feedback is the reward in itself.
SAM: And I think that is true and it’s definitely true for me. I do Jiu Jitsu and getting a new belt is so meaningless in the grand scheme of things and doesn’t affect my skill ever at all but it does actually mean quite a lot and I’m an adult, I’m not a kid but I still like look forward to working towards getting another belt and it doesn’t mean, I don’t get any more money from it, it doesn’t make me any better at Jiu Jitsu, it doesn’t mean anything but I like that visual representation I like being appreciated for doing well and putting in the work.
DAN: Yeah how good do you feel after a good solid day of productive hard work.
SAM: I feel great yeah and I feel terrible when I’ve wasted a day away.
DAN: And I suppose it is different for us to some extent in that we know that we’re directly reaping the rewards of our hard work so that probably does color it slightly differently from if you’re an employee, I still think that in general if you’re doing a job that you enjoy and you do it well then that is satisfaction in itself.
SAM: I think I agree and I do probably over think money has been a reward mechanism because it doesn’t actually matter that much to me so why should it matter that much to everyone else?
DAN: And something I do try to do is make working with me enjoyable and something that someone might look forward to to some extent.
SAM: That’s a big thing right? I remember you worked with a friend of ours for a little bit and you were just doing it for the experience so you didn’t really care about how you came across and there was someone who was doing the similar role to you who was doing it because he really wanted a career in our industry so they were working really hard to impress, making sure all the deadlines were done on time, head down and you were just like cracking jokes the whole time and always at the coffee machine, not paying too much attention to the work you’re doing and by the end of it everyone was loving you and the other person they kind of just looked over and ignored a little bit.
DAN: The more that you make the workplace an enjoyable place to be, the less you think about how much you’re getting paid. It’s just an enjoyable place to be.
SAM: Yeah I think that’s actually a bit more deep than I was expecting out of this because it’s something that’s so true for me like I’m not that motivated by money. I do think about money quite a lot and I’ve got podcasts about making money.
DAN: But on the other hand it’s totally different be pursuing money and to have a level of security and comfort versus pursuing money for itself which is a totally different thing which you’re quite clearly on one of those.
SAM: I think both of us have made decisions to prioritize certain other things versus just making as much money as possible.
DAN: Yeah for sure.
SAM: So we talked a little bit about managing people and our experiences and the problems that come with it, let’s talk about let’s try to be a bit constructive like what can we both do to improve improving anything so let’s say I want to get better Jujitsu how would I do that? Well I’d practice a lot, I’d watch back videos of me doing it and I’d reflect on what I was doing and then I would go and talk to experts or I’d read books or watch videos or get coaching from the best around and then I would get better, so how does that apply to a soft skill like managing or leadership?
DAN: I think it starts with I’m going to read this book about the courage to be disliked because that’s really one of the key things that we’ve talked about.
SAM: Even just the name.
DAN: Maybe be less likeable.
SAM: Maybe the takeaway from this is it’s also true about my blog or make this podcast a bit more controversial, I would probably do better. If I was happy like winding a few people up, being a bit more partisan about my opinions, well you’re obviously practising quite a lot, you know your everyday you’re managing people so you got the practicing and trying to self-analyze
DAN: And often discuss house and management events have gone with my business partner as well to try to sort of have a review of these kind of things obviously, there’s more you can do.
SAM: You’re thinking back and you’re saying did this work you’re doing a bit of trial and error yeah all that kind of stuff and then the other thing so you’re doing bit practice bit of self-reflection so that’s something I need to start doing and that’s what I can do quite easily right? I could hire someone to help me with my blog or podcast and I should do that, why don’t I do that? How do I do that?
DAN: Have you thought about what the hiring process would look like what the activities would be? Would it be an interview, would you get them to do any tasks that relate to what they would be doing if they came to work for you?
SAM: Yeah all good questions, all stuff I need to spend a lot more time thinking about.
DAN: Yeah because that’s something so in in the process of hiring, I probably interviewed maybe 40 or 50 people and have thought quite a bit about the hiring process and tried to make it involve as many of the relevant skills that the person would be doing while on the job so rather than talking about doing the job, actually trying to get them to do aspects of it which are relevant, so for example we’d explain, we’d give someone a scenario and say oh how would you go about building this and sometimes we’d make deliberate make parts of it vague to see if the candidate would probe us for more information, because again that’s going to be an essential part of working with someone so if you were hiring someone, Sam, you might leave a clue to a bit of information now and you’d want them to tease it out of you and have the initiative and the intelligence to see where there are holes in the instructions you were giving and tease it out of you.
SAM: Yeah so I think for me like initiative is probably the most important skill that I’d be looking for so I’d have to as you say devise questions or an induced style test that would tease out and work out if they do have that initiative.
DAN: You’re trying to simulate what it would be like to work with you.
SAM: Yeah that’s good point. All right yeah, I’m gonna hire someone.
DAN: That’s exciting
SAM: I do this every year and it always fails. But this time will be different but I said each time I think I’ll get better and I solve a problem I made before and then I solve a bad habit I was in before and do again. It kind of brings us back to where we started, you said you started off when you first moved to London living quite a lazy lifestyle and then at some point you ended up hiring people and getting an office and now you work 9-5 effectively. How much of having people under you having people that you manage forced you into that lifestyle change?
DAN: I think it’s mostly just a practical thing being together in an office in the same room is the best way of working together and that generally that would then boil down to us working regular office hours cause that’s the standard and standards are there for a reason so coming back to your question, I think it’s more of a case of necessity and practicality of why we have now migrated to regular office hours.
SAM: Well and I think there’s a thing that you want to be a productive person and feel like you’ve done a decent day’s work, I want that too and having someone who I know is kind of looking to me for leadership and an example set for how they should be working.
DAN: Well that’s hugely beneficial.
SAM: It’s hugely beneficial for me let alone everything else.
DAN: I hadn’t thought that that was where you were going with this but it totally makes sense that something that could benefit you was sure to give you that extra kick up the backside to use your terminology from earlier.
SAM: Yeah all right well that’s good, I think let’s end on the learning from experts and I’m sure you’ve read quite a few books that I should probably read, do you want to give me a few examples of some of your top ones that I should delve into.
DAN: Yeah there’s an interesting one called Crucial Conversations so you wouldn’t have thought there’d be a book on having a conversation but there is one there is one called Good Boss Bad Boss
SAM: What a title like Rich Dad Poor Dad but the boss version.
DAN: And I am going to read courage to be disliked. Yeah awesome well cheers Dan thanks for coming on, thank you very much and as always I got a good kick up the backside.
Emma poses a question on social media and travel:
“Why is it so much easier to post a photo of you working in a cafe that has a sea view in Malta versus you in a cafe in Tunbridge Wells?”
A self-reflective episode where Sam & Emma talk about building a personal brand and what they could do better.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
02:05 – Sam speaks about the importance of authenticity in his businesses
04:04 – Considering different approaches to representing oneself in business
05:05 – Considering the lifestyle vs. the presentation of the lifestyle
06:30 – Should you google yourself to take control of your online presence?
07:17 – Strategy for image management on the internet
09:50 – Blog as a long form version of a CV
11:11 – The necessity of instagram for business
13:33 – The consequences of pigeon-holing yourself into a specific type of lifestyle
14:53 – Example of the crying baby in front of the perfect house
17:20 – The brand of a celebrity chef
19:07 – Improving your instagram
21:01 – Sam’s thought process for improving his own instagram
22:57 – How cringy self promotion can be
SAM: Hello and welcome back to another episode of the lazy entrepreneur I’m your host Sam Priestley and as normal we’re joined by my lovely wife Emma Priestly.
SAM: Today I want to talk about a term that I have heard quite a few times in the last few weeks and that is aspirational marketing, which I assume you have quite a strong opinion about.
EMMA: Yeah definitely in terms of from a professional point of view and also consumer.
SAM: Well it’s something I never actually heard before, if I had I’d never really put it together and it made me think. So what I took aspirational marketing to mean is when you’re instead of selling the product itself you’re selling the lifestyle or something else behind it. So a classic example would be you’re selling perfume but in the perfume advert, it’s a beautiful woman. They’re not showing you anything about perfume, they’re showing you this person you want to be yourself, you want to be that person.
EMMA: Yeah the impact that the product has on your, what it transforms you into.
SAM: And it made me think because I see a lot of online gurus, people selling courses and stuff like that and they have videos where they’re sitting on a Ferrari or on a yacht or on a beach telling you how they can make millions and they’re kind of like not really there’s no physical product there they’re saying yes here’s my course and I’ve got these great whatever’s while driving in their car and you see that Ferrari logo or surrounded by beautiful women.
EMMA: Yes you associate taking their course with having their lifestyle.
SAM: Yeah and I’ve always been very rude about people who do that. I thought it was a load of nonsense and I think you do attract a certain type of person with that but I don’t think that is the limit of aspirational marketing. It made me think like am I just being, because up until now with pretty much every business I’ve done, I have been quite careful about being authentic and not over exaggerating the lifestyle that goes along with it, trying to be quite truthful, a bit too truthful in some cases where I come across as quite negative in certain things and am i doing it all wrong?
EMMA: Well I think part of that is that you are an introvert so it’s not really in your day-to-day life to be showing off. Oh look at this new thing I’ve just bought or look at this amazing hotel we’re staying in or whatever the thing is, it’s not really you to be bragging about it.
SAM: I heard something funny the other day, I was listening to another podcast and the guy on it were chatting and they said, oh you need to have a certain strange mix of insecurities in order to be a podcaster. That is where you kind of want to be the center of attention but you really don’t want l people to look at you too much. You don’t want to be the center of attention and I think that’s the same about blogging and there’s podcasting as well. I don’t particularly want to be the center of attention but at the same time I kind of do.
EMMA: So you do in your own way.
SAM: I don’t like everyone showing off, I don’t like bragging but I’m also doing this podcast and I am writing this blog about me isn’t that weird?
EMMA: Also you’re writing a blog about you in terms of how you live your life and how you do your work and you’re trying to encourage other people to do the same. Yeah so you talked a lot about your working hours and the things you’re working on at the moment, the things you’d like to be working on but you don’t talk a lot about your lifestyle around you.
SAM: Yeah which is weird isn’t it because it’s something very linked but it’s also quite braggy, very snobby to be like look at all this stuff I’m doing, I think you should copy me.
EMMA: Yeah and of course that’s not the way that you talk about it.
SAM: But maybe that is the way I should talk about it, maybe I need to be a bit more ballsy with how I portray stuff especially because this podcast is called the lazy entrepreneur, it’s about you know that I’m quite a lazy person more interested in lifestyle and having control of my free time and fitting my work around that and living the life that I want to live. And I have written before about being a digital nomad and stuff like that but I’ve never used that as a way to help promote my stuff and my businesses. They’ve always been kind of as a side, just like I kind of think like oh you should here’s what I’m doing in my free time. Do whatever you want to do.
EMMA: And there is quite a difference in terms of the content. Let’s take your Instagram feed for when we were traveling and being digital nomads versus when we’ve been in Tunbridge Wells which is coming up to two years now. Why is it so much easier to post a photo of you working in a cafe that has a sea view in Malta versus you in a cafe in Tunbridge Wells?
SAM: I mean part of it is I thought it is a bit more applicable to the business. I was talking about you know the freedom of travel, freedom of time and being able to post a picture of writing or doing my work from a beach. It felt quite relevant, whereas now posting a picture of a lovely flat white and a ham and cheese croissant in the local cafe doesn’t seem very applicable at all but neither is sitting on a Ferrari while you’re talking about online business.
EMMA: Yes so what is your version of it?
SAM: So I do talk a lot about personal branding, in fact I wrote a blog post about personal branding not that long ago in July. Well I was basically saying everybody needs to now take control of their online presence and actually just really think about it. Be specific about what it is they want to show and not just as a way to protect yourself from you know people googling you or potential employers and stuff like that but also as a way of promoting you, as it will help you get bit more industry recognition or find new clients or something like that. Nowadays the old CV we have a very nice one-page resume isn’t all that someone will see of you, they’re probably not gonna ring around the resumes but they will give you a proper google and workout everything you’ve been doing.
EMMA: So what do you mean by take control of your online presence. Would you start with googling yourself and then what would you look at the descriptions of all your profiles and of all your kind of social media, like LinkedIn, Facebook, what’s described, what is their about us on your company pages, how would you take control?
SAM: I think it’s very specific to what it is you want to get out of controlling your online presence. Is it simply that you want when someone Googles your name to have control of every link on the first page. In which case that might be create a little profile on loads of different social networks so that then you create your own your page, make sure your LinkedIn page is looking very good and professional. If on the other hand you’re trying to get more you’re trying to get more clients, maybe you’ve got a look into where they are, which platforms are they looking at and then really target them. It’s really about thinking it through, realizing that your name is inexplicably linked to whatever it is you’re doing and that is true whether you’re making gin like we are or whether you’re an accountant in a massive company. There’s a reason there were top law firms and professional services are named after the founders. That’s not a reward for them, that’s because they are the brand, they are the USP that that company has.
EMMA: They’re putting their name on the line.
SAM: I think this like personal brand stuff is equally important for us doing stuff like the gin, for instance with PR getting information about us into local newspapers, it’s a lot easier to come off an interesting story around the founders than it is to create an interesting story about this random gin. Us as people are the one thing we have unique that’s like truly truly unique around our business. And also there are so many random things because I’ve written blog posts about starting a gin business, I’ve had people who just generally in the industry who generally googled about gin come across my staff and then reach out to me. I got loads of interesting tips off people, talk to other people’s tiny little businesses, if I hadn’t been sort of linking my gin with me as a person, I probably wouldn’t have got. Because they’re not contacting Pipehouse Gin, they’re contacting Sam Priestley. It’s probably a little bit wishy-washy what we’re talking about but this aspirational marketing phrase really made me think, am I doing personal branding correctly? There is more I could do.
EMMA: I think there’s always more you can do.
SAM: I think I can do better because I think that currently I’ve tried to keep everything a bit too separate. They’re not necessarily linked and in some ways I’m very private and I do write like a monthly report I find out and I’m not saying people should write their own personal blog whatever but there are many ways you can kind of get your message out, link yourself as a brand to your business.
EMMA: You always said one one of the reasons for setting up the blog in the first place was your online CV so you could post about all the different businesses that you’ve set up and still do now or sold, whatever and it was a long form a version of your CV.
SAM: That is something that I have spoken about in previous podcast and I say didn’t work and I think it has a word because I haven’t done it properly. When people come across my blog for one I think they assume it is a lot smaller in readership and reach than it is. They probably think it is a lot more amateur than what they are because if you look at other entrepreneurs and stuff like that and their online presences, they’re very pushy about their success. Like Forbes top 50 entrepreneurs under 30 in their bio itself, and I don’t do any of that sort of stuff you know. It’s very much like look at this little thing I did, look at our bottles breaking or whatever.
EMMA: Well it’s real.
SAM: It’s real yeah.
EMMA: You don’t inflate anything.
SAM: I don’t want to do any online branding stuff that isn’t authentic, that isn’t true to me. I was having a little look around, I kind of think now I need to do better when Instagram for one because Instagram seems to be a necessary medium it’s gotten so big now. It’s not a “nice to have” which it was five years ago. Now it is a necessity especially for any business whether it’s the gin or the table tennis or my personal blog. As I was looking around other people who are doing similar things to me, I’m trying to see what they’re doing well and I was really struggling to find people who had the balance right that I kind of liked so on one hand you got people like Jocko Willink who is like this ex Navy SEAL, massive Brazilian jiu-jitsu guy and he like posts a picture every morning at 4 a.m. of him in the gym, of his watch showing the time and like a sweat patch in the background. He’s got millions of followers, so his brand is that get up early, go get a go fight for it. Whereas I’m not that’s, that’s not me. Like I could try and do it but that would be a lie.
EMMA: Well no it’ll be the opposite it would be 11 a.m.
SAM: Yeah getting up at midday but then there’s the other side, there’s the whole like the luxury living side, my life is amazing and I feel people get trapped into these, they create an idea of what their life is like that they push on social media and then they get trapped into having to
EMMA: Keep fueling that machine even if it’s not real.
SAM: Kind of constantly living in nice hotels. It started off by it being real and then just that becomes their thing. If you’re a food blogger you have to always be going out and eating food even if you don’t feel like it. We watched a documentary about like YouTube couples so people who’ve made a career for themselves out of being this perfect couple, vlogging on YouTube, being quite funny and silly and quite often when they’re broken up but they were still pretending to be together for the sake of this youtube thing.
EMMA: Which is crazy and it just showed how stressful the documentary was showing how stressful their life was that they’re constantly having to live this specific life for the cameras and for their fans even if they were having a really bad day or having a really big argument or whatever emotions they were going through, they had to channel it all into this kind of performance.
SAM: That’s something that I don’t want to end up doing.
EMMA: It’s not authentic age.
SAM: I don’t want to be this digital nomad always traveling, looking like this perfect life spending hardly any time on my computer working. I don’t want to be tim ferriss suffers from that doesn’t he, it was a the 4-hour workweek but he doesn’t work four hours a week he works hundreds of hours a week, he’s a workaholic and he’s like business you can work four hours a week and you spend the rest of the time doing what you want, which happens to be working. So a lot of people disregard him because of that but also that’s why he got popular in the first place, that kind of viral extreme and I know he suffers quite a lot from depression and mental health and stuff like that but that’s not congruent with his brand.
EMMA: You don’t want to see that side of him.
SAM: But then again, peoples opinions have changed a bit and they do want to see that side. Katie who does the branding for pipehouse gin was talking about this the other day. Saying she’s seen on Instagram this kind of perfect reality so it would be someone holding a crying baby but with perfect decoration behind him.
EMMA: Yeah a perfect house.
SAM: It’s like something real that people relate to but also in a perfect way.
EMMA: But appreciate how tidy and beautifully decorated the house is which is kind of unrealistic if you think about it.
SAM: Yeah I think this kind of personal branding stuff is very important for you given the industry you’re trying to break into is quite food and drink, image focused. Is image focused but also you’re approaching it from many different angles, yeah so you are Emma you make gin, you run the supper clubs, you’re doing some events. The only thing that really crosses all of those things is you, and so when someone Google’s you they’ll come up across your LinkedIn which will have these random things on it but on your Instagram they probably wouldn’t really appreciate that, like how do you build yourself a brand as being Emma the sort of food and drink person in Tunbridge Wells who is doing interesting stuff. You could be like a really famous person locally because you’re doing loads of interesting things that everyone would have heard of and a lot of people would have heard of you now especially people in the food and drink industry but because of one thing, not because of the link.
EMMA: Yeah and at the moment, there isn’t one platform where I speak about all of the different businesses that I do. I do kind of keep them separate.
SAM: But they are all linked. Supper clubs and making gin aren’t that particularly different when people think of you as the gin person or as they should think of you as Emma Priestly who does this. Like when you think of Rosemary Stranger who is the celebrity chef of Tunbridge Wells, I was asking who is she, what does she do? You’re like well she’s famous for these cooking schools and she’s a TV chef and she does this like but she is Rosemary Stranger, like the thing she did before isn’t what she’s defined as, she’s her own brand and because of that her brand is worth a lot.
EMMA: Yeah and she does do a lot of traditional PR so she does a lot of TV stuff, so she’s more of a household name and she does lots of different things on TV like travel stuff, food stuff.
SAM: So she’s kind of this celebrity, she’s a celebrity chef but that is a bracket that has now been quite well understood, can we create something is similar but different? It’s still about you but it’s not TV focused. Because why TV? There’s so many Instagram people who’ve never been on TV.
EMMA: Because we’re talking about Rosemary and she’s 70.
SAM: But it’s also TV because TV was the only way people got their personal brands out at the time, now that is not the case anymore. You don’t need to be on TV to be a brand in yourself. What about someone like Joe Wicks? He’s another celebrity chef type person but he didn’t get their through TV, he got there through Instagram and a lot of people creating cookbooks at the moment are doing it because they’re doing it through their instagram profiles, and if you want a cookbook you need to have a big audience you need to have a big personal brand. And that brand can either be around your business, you could be like the Hawks more and that cookery book or it could be around you as a person as a chef.
EMMA: Yeah and there’s definitely space for both and I think it’s pretty difficult to go to a publisher with the idea for a book when you don’t have the following now. I think it used to be about the idea.
SAM: A publisher would hunt out a chef and then say we’ll do all the promotion for you whereas now they’re hunting out people with big audiences.
EMMA: Then they know that they’ve got a captive audience to sell that book to.
SAM: And now it’s almost gone the other way around, they’re saying we’ve got the food photographers, we’ve got the recipe testers, where you can basically do everything for you. We just need your name and your brand to push out there. What a weird world we’re living in. So what sort of actual points are there I should be doing?
EMMA: Well you said you want to post more pictures on Instagram.
SAM: I want something that links my businesses together that has me as like the central linchpin of how do I do that in a way that’s aspirational, that actually people want to see.
EMMA: That is not spammy and authentic.
SAM: And not really American.
EMMA: That was so english.
SAM: I think I am doing it right on my blog, a couple of years ago I changed it from arbing to sam priestley dot com. Focus on my personal brand, I think I’m doing okay there, but I think when people read a blog post and then they’ll look me up on Instagram and I think Instagram is where I’m slightly been let down. So that’s something I need to work on and treat it more like mini blog posts. I should treat it like an extension of my personal brand.
EMMA: Yeah definitely, so what would you post from yesterday, or what would you post from Sunday.
SAM: Well the problem is it’s the photography behind it. Well what did we do?
EMMA: I already know the answer. Pictures of us tasting the gin, tasting the new flavor.
SAM: Oh yeah so tomorrow morning we’re working currently on scaling up our second flavour so we had some gin we’d made, one bottle and then some gin we made at twenty five liter amount and they should have been identical but they’re not because it’s quite hard so we were doing a lot blind taste testing to work out what it is we can improve so that’s quite interesting, so that along with a description of what it was, why we were doing it, I think could be quite interesting.
EMMA: Yep and then the one from Sunday, I’d say would be a picture the roast and talking about how English it is and how we’re enjoying being in Tunbridge Wells and you can’t get a roast like this when you’re in Thailand. Those are the things I would say looking back at the last few days.
SAM: Yeah but then Sunday we also went to church and then we had dinner afterwards. There is some content there that could be created about know community. Saturday night we went out to one of your friends who is a Maldivian and she cooked us some amazing Maldivian food. There’s definitely content around that. I think I’ve just got to really think about what is applicable to my personal brand. Like what what adds to the image I’m trying to cultivate.
EMMA: Yeah not just as you live it but I mean maybe there are four or five different kinds of headlines that you want to promote and if they don’t fit into that.
SAM: I’ve got to be really strategic I think. And what about you, what can you do differently? How are you going to build the Emma Priestley brand. Emma’s supper kitchen, Pipehouse Gin.
EMMA: I mean I can always post more pictures of food, and the making food and me eating food but I always kind of feel that there’s a limit to how much.
SAM: It feels a bit cringy doesn’t it? Yeah that’s the problem, and that’s the problem I have as well. When I first launched my blog, I didn’t tell anyone about it for two or three months.
EMMA: Yeah and you still write blog posts now that you don’t promote on email because you don’t think they’re good enough.
SAM: Yeah and I don’t post on Facebook often because I’m a bit self-conscious.
EMMA: And there’s some other social media channels as well that you don’t regularly post in like LinkedIn which you could, so can your LinkedIn yesterday.
SAM: We just need to get over ourselves.
EMMA: The last blog post you posted was last year, it was March.
SAM: The funny thing is like when I see someone post the sort of stuff I think is a bit cringy, I’ll go that is a bit cringy but then I’ll go and read it. They post about whatever it is, something that they’ve achieved. A picture that’s like look at my team that I’ve grown from one to twenty and then I’ll click on it and have a read. I mean maybe we just need to get over ourselves. Well I think on that note we’ll end this rather thought provoking podcast. Thanks for listening, actually, here’s a good question. If you have any people on Instagram who are kind of doing entrepreneurial stuff and you think you’re doing really well and have a good personal brand, please can you send it to me. You can just instant message me on Instagram or email me at hello at sam priestley dot com.
EMMA: So your Instagram handle is Sam Priestley
SAM: Yeah should I change that?
EMMA: No that is your name!
SAM: Alright yeah on that bombshell, goodbye.
“It would give me a good excuse to go and get a private training session from some of the best black belts in the world.”
-Sam, on the co-benefits of starting a mid-level jiu jitsu video series
I am joined by guest co-host Ben Larcombe to talk about whether you should turn your hobby into a business. Ben is my business partner and together we run Eastfield Sporting Goods Co and Pipehouse Gin. He is the perfect person to talk to because turning his hobbies into businesses is exactly what he been doing very successfully for the last 10 years.
We discuss: Will the hobby work as a business? How do you create a business? Will starting a business make you lose the love for your hobby? What are our plans for future hobby related businesses?
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
01:19 – Ben’s idea to go to table tennis academy instead of uni
03:22 – Long term table tennis plans for earning potential
05:04 – Turning an active hobby into a passive hobby
08:04 – Ben describes his spotify playlist
10:48 – Sam’s friend that started a gi company
12:33 – Choosing the right business partner
14:18 – Best writing author vs. best selling author
16:32 – How being paid can take the joy out of passions
18:16 – The link between your reputation and your business
22:54 – What businesses make good money?
25:11 – Brazilian Jiu Jitsu vs. table tennis for business
29:29 – Sam’s business ideas for jiu jitsu
32:58 – How starting a podcast gives you an excuse to get in the door with top performers
35:20 – Closing thoughts
SAM: Hello welcome back to another episode of the lazy entrepreneur. I’m Sam Priestly and today I’m joined by a special co-host Ben Larkin.
BEN: Special. Hello.
SAM: Special indeed. We’re here today to talk about, should you turn your hobby into a business? And a little bit about how you can do that. And I thought Ben would be the best person to talk to because it’s basically what you’ve been doing for the last ten years or so.
BEN: Yeah my life is pretty much having a hobby and turning it into a business.
SAM: Yeah yeah it makes sense and it’s very much hobby first. You start off with the hobby and then you make a pit of money out of it.
BEN: Yeah I started playing table tennis about nine or ten and then got to eighteen and thought let’s try and make something out of this and yeah it paid off but not that it always pays off but it paid off for me.
SAM: Ben and I grew up together and I remember when we were whatever age it is sixteen seventeen, seventeen or eighteen when you’re picking what university to go to. I was going off to do computer science and then was gonna go off and do geography and then one day he turned around said instead of going to university to study geography, he was going to go to table tennis academy and just spend his time playing table tennis.
BEN: Yeah I don’t think at that point I fully thought it through.
SAM: We all thought you were mad.
BEN: It was more just picking the most enjoyable option although saying that we’re at 18 you can always do something for a couple of years and then go back to university anyway so it didn’t feel like much of a gamble but yeah once I started once I started at the academy taking it seriously then I kind of started thinking I’d turn it into a career somehow but didn’t know exactly what that would look like.
SAM: and you kind of been doing that ever since so from what like 21 or something you didn’t start looking into actually earning some money from it and then you went and you were a coach for a while yes I started coaching when I was still training quite seriously so from the age of like 18 19 did some coaching on the side and the money was really good, like when you were 18 get about 20 pound an hour or some – gun coach kids for a couple of hours on a Friday afternoon um so suddenly you start thinking this could you know you just start doing the math add this up times by eight hours a day and you know it looks like a really good salary not that you can actually do that much because of all the traveling and stuff. Yeah that was when I started thinking why not just do this.
SAM: Yeah and then after that you started your blog about table tennis expert table tennis dot com.
BEN: Yeah because so I quit, well I didn’t quit uni, finished uni 2011 started coaching table tennis down in London full-time for about a year I was just literally trying to do as many hours a week as possible because you know if you’re getting twenty five pounds an hour every four hours there’s an extra 100 quid a week. So just filling up my weeks and then it got to a point where I was doing 25 plus hours a week. It’s pretty exhausting and you realized that no one’s really gonna pay more than thirty quid an hour for table tennis. A year out of uni you’ve kind of hit your maximum earning potential. Started asking other coaches that I knew like table tennis or other sports like what their long-term plans were. None of them seem to have any long-term plans. Okay this doesn’t seem like, it’s not like everyone else is doing this with a vision of something else happening so I thought better start looking into other stuff and then started blogging as a, maybe this will make something happen which it did.
SAM: So we actually went into the blogging thinking this could be a business?
BEN: Yeah because I looked into other ways to make money and I started that African pygmy hedgehog website.
SAM: We won’t talk about that now but I did do another interview with Ben where we went deep into all this stuff which you can check out. It’s one of the bonus episodes it was already been released.
BEN: And then I mean relevant to this I realized that if you’re gonna do something like start a blog or an online business, it makes sense to pick something that you are actually interested in and care about rather than some random topic that you don’t know anything about so it seemed that I knew a lot about table tennis and actually enjoyed doing it. I decided that was the way to go.
SAM: So you did the blog and then a bit later we teamed up when we started making table tennis bats which is now one of our main businesses and is doing quite well and then more recently we started a gin brand. We now make gin together.
BEN: Not that I’d call that a hobby of mine before we started.
SAM: Well that’s something we could talk about cuz I was talking to Emma about this yesterday and she was well what hobbies have you turned into a business? And I said quite a few things and then she said what about the gin? Oh yeah definitely that it was very much a hobby of mine not the making of it but the gin and the culture around it in general.
BEN: Yeah and that I guess would be a passive hobby that you can turn into an active hobby if you yeah if you have the know-how. yeah because drinking gin is very much a passive hobby.
SAM: Yeah you can’t get very good at drinking gin, it’s not like a skill you can learn. Before we sort of dive into that let’s talk quickly about what do we mean by buy a business because there are a whole range of ways you can kind of make money out of your hobby and turn it into a career. So we’ve talked about Ben, he started a blog and nowadays you know there’s YouTube channels, Instagram accounts, all that kind of other stuff where you’re kind of creating content for people to consume. We’ve also got stuff like the table tennis bats that we’re making so creating some sort of physical product that people in the hobby can use. Table tennis bats are an obvious one but most hobbies will have something you know if you’re doing dungeon and dragons you can make kind of handcrafted really cool dice or whatever it is. That’s actually quite a big business, sort of art as a dice for dungeons and dragons.
BEN: I thought you made that up off the top of your head.
SAM: If it’s a sport you could put on tournaments, you can open a club, you could do coaching, kind of all sorts of things. But not all hobbies would probably work as a business. You mentioned active and passive.
BEN: Yeah it’s something I’ve been thinking about recently you know I thought like maybe as a society we’re moving towards more passive hobbies and less active hobbies so when people have free time instead of going out and doing something or learning they’re kind of monging around on the sofa watching Netflix, endlessly scrolling through Instagram, like that is a hobby or a pastime but it’s not, you’re not actively doing anything you’re just passively taking stuff in. Yeah which you can’t really make a career or a business out of watching Netflix or scrolling through Instagram.
SAM: It’s weird what isn’t it because with Netflix you’re watching lots of films and you know there is ways to make money out of that being film reviewers and stuff like that. Another quite passive thing is playing video games, there are ways to make money out of that.
BEN: Well video games would be a bit more active because you could become the best in the world at a video game. But you can’t be doing your best in the world at watching Netflix.
SAM: But you could become the best in the world at being a film critic.
BEN: But that is active watching not passive watching.
SAM: Yes I think that’s the trick isn’t it. It’s not that watching Netflix itself is monging out it’s more like the procrastination side of it that way you’re being active about it and you’re kind of hunting out types of films and writing reviews about them or whatever. It is a very different type of hobby.
BEN: In the same way that I’ve started this Spotify playlist, where sure I’m listening to music but I’m actively searching for new artists as opposed to listening to the UK top 40 all day long which wouldn’t be active that would just be passively listening to pop music.
SAM: So what is your playlist?
BEN: Yeah so I do this thing where I search for unknown UK urban artists that I like and then put them into a playlist not as any big business idea but that is more of a hobby but it’s an active hobby because I’m searching people out on Twitter and YouTube and Spotify.
SAM: Yeah it’s almost like your hobby is contributing something.
BEN: Yeah I am trying to curate talent in one place and support people because a lot of these guys have got like you know 100 followers on twitter, they’re completely unknown but the music they’re making might be quite good. And a few of them I’ve like posted about and then in the future, a year later they’ve got really big.
SAM: Yeah whereas I consume music in completely the opposite end of it, where it’s just for, just for enjoyment, just for filler and I don’t there’s no kind of active thinking involved it’s almost the opposite. So let’s say you got your business, so you got your hobby and you want to make it into a business. The next question then is, are you able to make that business work?
BEN: Yeah because just because you’ve got a decent idea doesn’t let’s say for instance you love table tennis but you are not actually that good at table tennis and you’re not a very good communicator, then you’re not going to be a very good coach and if you don’t know yeah like the physical side of things if you’re not very good at organizing your time, money, you’re not going to be able to start a decent business without at least first learning all those skills.
SAM: Yeah because there does seem to be a trend at the moment that people who are into fitness are becoming fitness coaches, becoming physical trainers but there’s quite a lot of them who don’t really know anything about physical fitness.
BEN: Which can work if you’re really charismatic and good at bragging.
SAM: Yeah if you got really good people skills, you’re very good at motivating people or whatever.
BEN: So you kind of need one or the other and ideally both. Ideally you need to know what you’re talking about it and being a good communicator and a charismatic personality but if not you could probably make it happen with just the charismatic personality but you’re just a bit of a fraud.
SAM: But then again just because you’re not you don’t know enough at table tennis to do a business where your position is an expert, there are ways to create business where you don’t need to be an expert in the sport. For instance, I got a friend who started making kimonos, gis, for Brazilian Jiu Jitsu. He started doing that when he was quite new to jiu jitsu he’s just sort of very good at finding suppliers and doing fabric quality and all that kind of stuff.
BEN: I guess he is an expert in something. It’s just more in the designing of it.
SAM: On the business because depending on what business you’re doing there’s definitely skills involved in that. Your business isn’t just an extension of your hobby, it’s a different skill set altogether.
BEN: Yeah and it’s no good knowing everything about jiu-jitsu but nothing about business. You’re probably better off knowing a little bit about jits and a lot about business.
SAM: Because there’s loads of people in jits who try and start business and fail spectacularly.
BEN: Probably because they don’t understand how numbers work or the way that they count how much money they’ve made doesn’t actually make sense.
SAM: I mean probably whoever’s listening to this podcast is interested in learning about business. They know that business itself is a skill that they can learn and get better at.
BEN: Yeah and the problem is when people just love their hobby and think I love this so much I must be able to make it work and then rent a shop for thousands of pounds each month and just don’t realize. So what you can do though is like partner with someone who knows business because maybe you’re never gonna be a great business person but you love making cakes so partner with someone who’s good at business. They can do that and you can just focus on the cakes.
SAM: Yeah I think that’s a good tip. Especially if you’re really good at making cakes but you’re also a real introvert and you don’t have much confidence. A big part of selling cake is actually going out and finding customers especially if you want to supply coffee shops or whatever, partner with someone who’s got the personality that works for them to get you to go in and meet the business owners. That stuff could work quite well.
BEN: I went on one of those brew dogs study tour things recently and they were saying that the two brothers that owned, it one of them pretty much stays in Scotland the whole time making beer. Doesn’t leave the factory place. The only time he does leave is to go to like the other places where they make beer and make sure the beer is good enough and if it’s not like says you can’t sell it, so he’s just mad for the actual beer making process and then the other brother just goes around like the businessy salesman type thing, getting the deals but you couldn’t do it one without the other. You need someone who makes sure the beers really good and you need someone who is actually gonna go and get that in front of people.
SAM: Year beer is a really good example because in the UK, we have maybe thousands of small craft beer producers a lot of which actually love making beer and love drinking beer but most of them don’t really get very far.
BEN: Yeah and it’s not through lack of quality. The same with the music stuff in the playlist. I played some of this music to my wife and she’s like oh that sounds like it could be on the radio yeah but it’s not through lack of quality on the music. It’s not the lack of music quality it is just that it hasn’t got in front of people yeah but the music we hear on the radio isn’t the best music, it’s not an objective measurement, it just hasn’t got the exposure. Robert Kiyosaki the Rich Dad Poor Dad guy always writes in his book stuff like I don’t want to be the best writing author, I want to be the best selling author. Obviously you’ve got to be fairly good at writing, otherwise it’s gonna be useless but do you want to be like the absolute best or do you want to be the best-selling.
SAM: And I think we do get a few survivor bias from that, there are some of the best writers who have then made it and some of the best singers who have then made it, but just because there are these outliers who people like Stephen King who kind of has no interest in the business side but is just really into the writing doesn’t mean that that is the best route if you want to turn your hobby into a business. That’s the best route if you want to be the best writer and you might then be lucky enough that it becomes a career but it doesn’t normally work like that. I was thinking about that with say table tennis, so table tennis is a sport where if you’re the best table tennis player in the world you have a career, but if you’re all like the best table tennis player in London you might not have a, there might not be enough money in there.
BEN: You have to be like top 5 in the UK to make a decent living out of just playing yeah so yeah it doesn’t really matter whether you’re like 100 in the UK or 20 in the UK, you’re not gonna make good money from playing.
SAM: Whereas there is a lot more room to make money by doing other types of businesses around the hobby.
BEN: But being 20 versus being 100 isn’t gonna help you.
SAM: You know if you’re coaching beginners or something like that, yeah to them you’re both unbelievably good. Yeah let’s talk a bit about the issue of when you turn your hobby into a business and then you lose interest in the hobby. What’s the saying that the best way to stop enjoying your hobby is to do it full-time?
BEN: Yeah and you can kind of see what people mean. I think it depends what kind of business you turn it into. So like not that we want to talk about table tennis all the time but I know people that started getting paid to play table tennis for a club and they used to love training and competing and everything, once they started getting paid to play, they start saying well I’m paid to train twice a week and play a league match like 15 times a year, and they stop training more than that because they say well I’m not going to train for free. They’re only paying me to come to two training sessions. it’s like but before you used to love training and used to have this big purpose of trying to be the best and now you’re just doing it because you get paid to do it and they’ve definitely lost some of the love that they had before of just wanting to get really good and now they’re just doing everything on a numbers basis.
SAM: Because the whole idea of an amateur I see you’re doing it for the love of doing it, whatever it is, so you got that side where people feel like they don’t want to do the hobby without getting paid for it because they’re worth something, but then they got the other side where they might be playing it or doing whatever the hobby is ten hours a week and really enjoying it and now they’re doing it professionally and they’ve got to do it 60 hours a week. And they just get sick of it.
BEN: Yeah potentially, I mean again I think it depends on what it is because you’d find a lot of people who are, they would say they’re only able to do it ten hours a week because they’ve got to do other, and then once they turn into a business or full-time suddenly they can do it all day every day and it’s their favorite thing to do. I guess it depends what it is.
SAM: I wonder if there’s also a difference between, we’re talking about active and passive earlier. What about when you’re doing it for fun the way you train and the way you practice is quite different than if you’re just doing it in order to get the best or could you’ve been paid.
BEN: Yeah I guess there’s less pressure.
SAM: When I was playing table tennis with you, messing around and having matches was a lot more fun than drilling and hitting the same ball a thousand times in a row. The other thing I was thinking about is if your hobby fails and you’ve got a bit of a reputation in your hobby already you can be linked to that and it can be quite bad for your reputation because your reputation gets linked to your business.
BEN: So what do you mean?
SAM: So in brazil jiu-jitsu there’s one quite famous guy who started a series of tournaments called metamoris.
BEN: Oh I think I watched some of them.
SAM: You watched one of them yeah metamorphosis. Yeah, well that business failed and they weren’t able to pay a bunch of the people in the business went bankrupt and now everybody in industry remembers this remembers him as a guy who didn’t pay some of his fighters.
BEN: Yeah because in those things everyone knows everyone. Once something goes pear-shaped.
SAM: There’s one guy who started raising money on a crowdfunding to do a documentary series about top jiu jitsu players ended up not having enough money to finish the film and never finished it but there’s loads of random people, hobbyists who donated a film and now feel they’ve been ripped off.
BEN: Yeah could kind of tarnish your name a bit.
SAM: There’s a bunch of people who started clubs with their mates, the club hasn’t really made any money, it’s struggling has all the financial issues, there’s all the stress around that and then they end up falling out and not enjoying the sport anymore.
BEN: Yeah so that would kind of ruin your hobby in the sense that you’re now kicked out of the community that you were in, so you kind of ruined it for yourself. It’s not that it’s got ruined by yeah doing it too much it’s just you’ve, you know, messed it up.
SAM: Maybe there’s a thing about if you’ve been doing coaching all this time maybe you would have got a bit sick it up because even though you’re doing a business out of a hobby you enjoy, doing that full-time for ten years, you might have had enough.
BEN: Yeah I know a lot of people that do coaching that just get sick of it just because it’s too much like just repetitive over and over all day every day. But I think that that comes down to about what is a business. In my head I just get Duncan Bannatyne going, that is not a business that’s just you. When people say I am starting a business, I say, what’s your business. I coach table tennis people all day every day. Well how’s that a business. That is just you coaching people in table tennis. If you have a team of people coaching, then it could be a business. But if it’s just you that’s not a business, so I think that’s why people get sick of it. When it’s just, they have to go and do this at this time every day all day. Even all the best coaches and stuff they only normally do two sessions a day but if you’re trying to run it like getting paid per hour obviously you want to do as much as possible but then you just become brain-dead and you can’t give what you want to to each person because you haven’t got the time to prep or plan or anything so yeah so it just becomes like going through the motions all day.
SAM: I think there’s there’s probably something around that you basically just build a job for yourself and a job where you need to find your hours where you can earn less than the minimum wage given all the time trying to find new customers and traveling and all that kind of stuff.
BEN: Yeah so you haven’t turned your hobby into a business, you’ve just turned it into a job.
SAM: Yeah into a rubbish job. Yeah so you’ve done this table tennis, you’ve got this playlist you’re doing. Do you have any businesses that weren’t hobbies to begin with?
BEN: I don’t know I mean obviously we do the gin thing which isn’t really, that wasn’t a hobby of mine yeah I didn’t know anything about gin when we started that yeah just tasted different gins and decided what tasted good to me.
SAM: Because originally you weren’t involved in that and you didn’t want to be and then maybe a few weeks in or something you’re like I’ve been sitting up all night thinking of ideas for this business.
BEN: Yeah well when you’re hearing about it constantly you can’t help but yeah so I wouldn’t say something has to be a hobby for it to work as a business for you because I would say even now still I don’t care about gin that much. I don’t spend my free time like researching gin for the fun of it but if I start a business that almost becomes like the hobby in itself doesn’t it? Like you wanna see yeah oh how can I make this better how can I, so the business is the hobby.
SAM: I think I’m a bit like that. I find certain businesses a hobby and I like the self-improvement side of it, I like getting better at things, I like building on things and sometimes turning your hobby into a business is a good way to do your hobby a lot more and have it pay for itself and earn a bit of money. It’s probably not the best way to make loads of money.
BEN: Yeah I’ve been thinking about this recently, like what businesses make good money? And you see online people who are teaching you how to make money so their business is like helping start a business which kind of seems like nonsense but it makes a bit of sense because most businesses in the real world are business-to-business, the ones that do well anyway because the people that want to pay for stuff are the people that are going to make more money by paying for this thing so it’s a lot easier to sell someone something for a grant that’s gonna make them 5 grand then it is to sell someone something for a grand that’s just gonna entertain them for a few hours so it kind of makes sense but most hobbies aren’t to do with helping other people make money. Like with all the table tennis stuff, that’s not helping anyone make money, that’s just people helping people get better at a hobby.
SAM: Well and you’re kind of limited by how much people are willing to spend to get better at a hobby.
BEN: Yeah no one wants to pay that much money to get better at table tennis whereas people are paying infinite amount of money to make more money.
SAM: Yeah if you’re a law firm and you’re already making millions and you want to make some more millions maybe you’re willing to spend whatever.
BEN: So probably turning your hobby into a business isn’t the best way to get super rich or start like a – I doubt many really successful businesses were started because it was a hobby and they turned it into something, but it doesn’t mean you can’t make a decent living out of your hobby.
SAM: Yeah and there are the odd outliers where someone has started a business from a hobby and it’s become huge and one of the biggest in the world hmm but that is not the norm. That is not how most businesses work.
BEN: I mean what about jiu-jitsu because I’m a bit surprised that you haven’t turned jiu-jitsu into some sort of business opportunity. Like how long have you been doing jits?
SAM: Four years.
BEN: And in Sam Priestly years that’s a very long time. Either I am expecting you to quit and start doing something else, or surely by doing something for four years you would have started some kind of wacky side hustle ignoring it but you’ve just been training and competing but I’ve not heard you say anything about it really.
SAM: And I do I do have a bunch of ideas, they’ve been sitting in the back of my head for a while. Let’s talk a little about jiu-jitsu first and how it’s different to table tennis. So they’re both not spectator sports and by that I mean that the way the industry and table tennis and brazilian jiu-jitsu works is it makes money off the participants in the sport, the people actually playing it.
BEN: Yeah like the Premier League makes all its money from people watching on TV doesn’t it? Which is not true of jiu jitsu or table tennis.
SAM: No one I know wants to watch jiu jitsu, even the people that do it. But that people who do jiu-jitsu has a reputation as a sport, a hobby that the people who do it spend a lot of money on, so the clubs are very expensive, the clothing is very expensive. People spend a lot of time on it, compare it to table tennis where if when I was a member of a table tennis club in London I was spending 20 quid a month or something whereas when I joined my Brazilian Jiu Jitsu Club in London it was a hundred and fifty quid a month.
BEN: Yeah they really milk you in jiu-jitsu. When I went to watch you in that tournament they were like are you competing. No alright well you got to pay 10 pound to come in. They’ll find anyway to milk a bit more cash out of you.
SAM: And even the tournaments about a hundred pounds. And people will do that every week.
BEN: People keep on moaning about table tennis tournaments costing like 40 50 quid.
SAM: And there’s this thing that judo is very similar to brazilian jiu-jitsu but the price structures are completely different so if wanted to do judo it’ll cost me maybe three pounds to do a session, if I drop in Brazilian jiu-jitsu club I’ll spend 30 40 quid for the session. It’s completely different even though they’re very similar, but that means that there is quite a lot of money in it and there are therefore a lot of people who are making money out of the hobby. Whereas with table tennis you’re one a few people, there aren’t that many people who’ve managed to turn it into a successful business.
BEN: Well I mean because the sports a very different sport so the people that do jiu-jitsu are all in. If you asked 100 people on the street, like when did you last did you jiu jitsu, everyone would say never but if you asked that with table tennis everyone would say oh yeah I’m really good I did that last month. So with table tennis you’ve got a super broad market of people that don’t actually know what they’re doing and don’t really care that much about table tennis but might by like a few if they you know want to play on holiday so you’ve got a really broad but thin market with a few people that take it seriously whereas jiu jitsu you don’t have the broad thing at all. There’s no one who’s like oh yeah I kind of enjoy that every now and again, like it’s not that kind of sport is it.
SAM: Yeah and there’s also a thing in jujitsu, there’s quite a small community and there is quite a hierarchy of built structure, so if you’re a black belt that kind of gives you the liberty to go and do what you want, so I as a blue belt wouldn’t be able to get away with doing instructional videos on YouTube or something like that or starting a club.
BEN: Because people are like what’s he doing? So actually on that, say you wanted to start like a clothing company. Would people do the same thing and be like why is blue belt starting a clothing company he’s only been doing a couple of years. So actually the belt thing is quite important.
SAM: But people have made it work by being a lower belt and doing something like that. Earlier I mentioned this guy who started a gi brand and he was able to make it work as a lower belt okay but generally they want to know your lineage, they want to know who you are associated with and getting people to buy a brand that isn’t linked to a black belt would be quite difficult.
BEN: And the good thing about the black belt structure thing is that it shows that people aren’t just a chance that he’s like popped up because it shows they’ve been doing it for a long time.
SAM: To get a black belt people know you’ve been doing it about 10 years and not just ten years once a week ten years three or four times a week.
BEN: Alright are you gonna tell us some of your business ideas or are you going to keep these under your hat.
SAM: So they all come from this idea that I don’t need to be a black belt to do it so there are a lot of YouTube tutorials and videos from black belts showing you how to do certain moves you know and in jiu-jitsu there’s hundreds of moves and all the top competitors are kind of inventing their own ones and then putting them off in tournament and everyone kind of wants to know you know how to do that move and they’ll make a video of it or they’ll sell a video course on it. But the problem is a lot of these black belts are so far beyond an amateur they can’t really remember what it’s like to not be able to move fluidly or not be able to, so on their videos they’ll show you it and they’ll make it look really easy and then you try and copy it and you just have no clue. You just can’t do it so my idea for a video series was to go around and find a lot of these top black belts, getting them to do a little tutorial video and then get them to teach me how to do that move okay, so I think I’m at the level where I’m not a complete beginner so it’s not having to teach me the very basics but I’m at probably that level that a lot of people are at and so then showing it really fluidly and then me doing it and them being like no you’re doing this wrong and moving individual things I think will make it a lot more relatable to everyone watching it and a lot easier to learn and it would force the black belt to kind of take it back a step and he’d probably pick up on the stuff he’s doing subconsciously that he didn’t even include in his description that I wouldn’t be doing.
BEN: I think that sounds like a good idea but would the black belts be up for doing that, I guess is the question.
SAM: Yeah I think they would be yeah.
BEN: Because they’re not getting anything out of that if you’re putting it up on your channel you’re getting all the revenue from that.
SAM: And I probably wouldn’t be able to get the top top black belts, but there’d be enough of them that I’d be able to.
BEN: And then so now we’ve established that this business might be feasible, will it make any money by how many views do these videos get because if you’re gonna go all the way around the country and these videos are gonna get like 10,000 views yeah that’s like just not worth doing is it?
SAM: Well not that many really, you’re talking 15,000 20,000 at the top end and maybe if I get someone really successful then I’d get a lot more views.
BEN: So probably the money it would make wouldn’t justify the effort
SAM: Probably not from a strict business point of view. There might be other things I could do so I quite like the patreon model where I would do one move with the person and then they maybe show me one or two more kind of additional points yeah I would lock behind like a subscription table type thing.
BEN: Yeah that could work because then it’s more like a membership structure isn’t it. As long as people think that the content is valuable to them they’ll give you 10 pound a month.
SAM: To access the extra little bit.
BEN: Whereas strict YouTube.
SAM: I don’t think just the adverts on YouTube would work, oh and the other thing I liked about this is I’ll actually get to learn all these good moves.
BEN: And yeah like a side benefit.
SAM: Yeah it would give me a good excuse to go and get like a private training session from some of the best black belts in the world. How cool is that?
BEN: Like when I was interviewing people for the table tennis podcast I did like, it gives you an excuse to talk to some really good coaches or top players and you learn a lot from doing that and make connections that you wouldn’t otherwise have, purely from the fact that I want to talk to you because I have a podcast and they’re like oh you’ve got a podcast ok fine I’ll talk to you whereas may be otherwise they wouldn’t have done so yeah it’s like a nice cover way of meeting people. Alright so that is idea number one.
SAM: Idea number two is I drive to go to training four times a week, so a 20-minute drive each way and I listen to a lot of podcasts and are quite a few jiu jitsu podcasts out there but they are all kind of interview star stuff but what I want is I want something to get me into like the training mindset on the way down so that could either be like mindfulness type stuff or it could be kind of describing techniques through audio okay and obviously audio is a subpar way of learning something like jujitsu because you really need to be doing it physically and visually but audio does help and talking through strategies or ways you transition between different moves or problems that are happening, it’s something I would definitely listen to because currently now I’ll just listen to an interview with some black belt and they could give me some interesting tips in that video but most of the time it is just talking about how they got into it and banter and they kind of gossip around it. So that’s the second idea.
BEN: Sounds like a cool idea but probably even less likely to make money.
SAM: Yeah this is the thing and I’m pretty busy at the moment and that’s the problem so neither of these ideas are high enough on my list of ideas I want to do that I’m gonna do it so I think it’s quite unlikely that I’ll end up doing one of these things yeah maybe when I get a bit better, we’ll see. Alright so let’s conclude quickly, so Ben is obviously a big believer that you should turn your hobby into business because it’s worked well for him.
BEN: Well depending on who you are. I actually quite dislike the advice of like oh I did it so go for it like yeah quit your job and actually you say that to the majority of people and they’re just gonna like mess up their lives and lose their money.
SAM: Quit their job and blunder.
BEN: Yeah by all means try and turn your hobby into a business around doing like getting a stable income and if it gets a point where it looks like it’s gonna work then go for it.
SAM: It’s not like you quit your coaching to write a blog.
BEN: No I did all that on the side for a couple of years while I was getting money from coaching because like people say oh I need to quit so I’ve got more time to do it but like you don’t like no it’ll grow slowly over time so do it around what you’re doing even if you’ve got like a boring office job.
SAM: But I think regardless of what business you’re starting, you should treat the business as a different set of skills something you need to learn.
BEN: One thing I’ve learnt from doing this is that annoyingly people want stuff more than knowledge even though what they need is knowledge not stuff.
SAM: They’d rather pay for a better bat than the actual training.
BEN: So more actually enjoy and care about doing is giving people the knowledge and the skills and information they need to get better at table tennis.
SAM: I think there’s probably a culture thing behind that because in jiu jitsu, this week I spent $400 on online videos to get better at jiu-jitsu.
BEN: But you’re not the average person.
SAM: But the reason I think is because that seems to be the way the culture has gone so this guy released a video, I think it made $80,000 in the first hour of releasing this video course. It’s gone from being something that nobody did they thought it was a waste of money because you could get everything for free on YouTube to actually being something a lot of people are doing now.
BEN: Yeah and actually from the Brazilian Jujitsu people I’ve met they do seem to be a more entrepreneurial clued up yeah learning a bunch than most sports.
SAM: That’s probably to do with it being all in. They take it very seriously.
BEN: Who made this video that made loads of money I’m assuming someone famous or really good.
SAM: So there’s a site called BJJ fanatics that releases loads of videos and then yeah this guy is someone who’s quite famous, hge just won a really big tournament but that’s not the videos I bought. I bought ones from someone else, I bought ones from his coach who also has a video series so there is quite a lot of room there but you know you got to be some of the best and you got to be a fairly big name, you got to be known as an expert. Alright well we’ve gone off on a little tangent. Thanks are coming on Ben.
BEN: Thanks for having me.
SAM: And goodbye. Well thanks for listening, I hope you found that useful and if you want to hear anymore from Ben what I’m gonna do is link to all the stuff he’s up to on the show notes page which you can find by going to Sam Priestley dot com and clicking on the podcasting tab and if you have any feedback for me then please drop me an email hello out Sam Priestley dot com thanks for listening.
My favourite ideas for new businesses I am thinking about starting in 2019.
One of Sam’s 2019 resolutions was to start a new business. So in this episode, Sam & Emma Priestley discuss seven areas where he thinks there are currently big opportunities and his ideas for businesses he is thinking of starting.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
00:59 – Idea #1 Flipping online businesses
03:43 – Sam’s implementation ideas for flipping online businesses
05:24 – How online businesses are undervalued
07:13 – The complementary nature of idea #1
09:36 – Idea #2 Source local products and then build that as part of the brand
10:47 – Working with toys
12:00 – Demand for an Amazon FBA style retail business
16:07 – Idea #3 Airbnb for shopfronts
18:25 – The plight of small artists selling products
20:21 – Types of uses for this new business
22:24 – Other businesses: new agencies focused on personal brands
26:00 – Lawyers and accountants specializing in online business and social media
29:15 – Sam’s background as a matched bettor
35:35 – Reviewing the seven business ideas mentioned in the podcast
SAM: Hello and welcome back to another episode at the lazy entrepreneur. I’m your host Sam Priestly and as normal I’m joined by my lovely wife Emma.
SAM: Emma today I wanted to talk about business opportunities that I think exists right now and that will be, 2019 is the prime time to do them.
EMMA: Sounds good.
SAM: You may remember in my New Year’s resolutions, one of them was to start a new business, so these are the ones that I’ve been thinking about.
EMMA: This is exciting, I’ve been waiting for this.
SAM: Yeah, so hopefully you’ll like one or more. Give me your opinions and if we don’t end up doing any of them, then maybe someone who is listening will like one and it will inspire them. Well let’s start off with probably the one that I have spoken to you about before the most, I’ve been thinking about for a few years which is sort of flipping online businesses. Basically online businesses, especially ecommerce businesses, are very undervalued at the moment. So you can buy a brand that sells pretty much only on online, on Amazon, or on their own website for about two to three its yearly profit. Now if you sell a brand, so for instance, our gin brand, if we were to sell that to an established drink company we’d probably get about ten times. Now the difference between some of these online businesses and a traditional offline business isn’t as big as people think
SAM: they’re actually quite similar and they’re just different mediums.
EMMA: It’s the same product
SAM: it’s the same product exactly or service so I think there is a real opportunity to buy these by like a portfolio these online businesses. Hopefully make a few improvements, try and shift them a bit more to be attractive to offline buyers or traditional investment companies and then sell them on. I mean in some ways it’s quite low risk because even if the business, you don’t manage to sell it on offline
EMMA: You’re still making money off it
SAM: you’re still making money off it and you can then sell it on for basically what you bought it like the prices aren’t gonna get cheaper for those sort of what a lot of businesses
EMMA: Yeah well not anytime soon
SAM: The risk though is fraud and I think that’s why they’re so cheap at the moment is that people don’t really understand how do you do any due diligence on online business.
EMMA: Which you know how to do quite clearly.
SAM: Well no I know more than most people yeah definitely.
EMMA: Especially on Amazon
SAM: On Amazon yeah but then how do you differentiate between real and fake customers like you can spend a bit of money to inflate your numbers inflate your traffic inflate your sales to make the business look appealing.
EMMA: Well I suppose if you if this is something that you did this year and say you invested in five businesses to start with there probably will be some of that and you’ll learn how to spot it but it’s not really something you can find the answer to before you start business I think.
SAM: Yes I agree with you I think it’s one of these businesses I would want to go in quite hard on so I would want to maybe look at doing five to ten maybe ten within the first year. Putting quite a bit of money or raise a bit of money for it, maybe build a little team who can focus on different parts of improving these businesses.
EMMA: Yeah like remote team.
SAM: A remote team or a local team or some freelancers who I know are good at this sort of stuff because I’m sure there’s a lot of low-hanging fruit with these businesses so ways that I can maybe add like an easy 20 to 30 percent on that profit without much work which kind of overnight would earn the money back at least cover a lot of the upfront costs and then even if I end up not really being able to sell them and end up with an income generator that’s earning me 20 percent a year, whatever it is. More than 50 percent a year, what a ridiculous return on investment.
EMMA: Well yeah and it’s interesting as well because I can imagine finding some potential companies that are looking to sell you could probably do some marketing on your blog I reckon there’s loads of listeners and readers out there that might be interested in you buying their business.
SAM: There might be I think it’s more likely the other way around that there’ll be people on my blog who are looking to invest.
EMMA: I think there will be both.
SAM: There might well be both yeah well there’s quite a lot of market places now there’s Empire Flippers, flipper dot com there’s a few different ones.
EMMA: What ridiculous titles.
SAM: Yeah and they’re actually really good business and did really well but I think they’re a bit handicapped by their name, it doesn’t sound like a premium broker.
EMMA: It sounds dodgy.
SAM: It does sound a bit dodgy but they’re selling businesses that have valuations of over a million pounds and they’re kind of the well known one. If you go on their website and you’re getting two to three years valuations, they’re really low especially when it’s a it’s a brand or they own all the trademarks, it’ll have its own website, it’ll have a bunch of stock probably as well.
EMMA: Yeah so what do you think are some of the areas that you’ll be able to improve in these online businesses, like what types of freelancers like in terms of skills do you think you could pull together and…
SAM: I imagine that some of them will be very good at one type of online marketing, on Amazon they’ll be very good at getting sales for Amazon. They’ll have the Amazon adverts nailed down they’ll have the keywords all that kind of stuff, something I’d be quite good at then it may be trying to find other avenues other ways to drive traffic maybe on the SEO side, building their own website, maybe finding wholesalers we could sell to and try and bring the business local.
EMMA: Yep what about their like supply chain.
SAM: I might be able to do some stuff on the supply chain. The problem is that when you’re buying stuff quite cheaply which most of these businesses are even if you can save 20 percent or something, it doesn’t add that much to your profit, it’d be much better to increase sales than to reduce the overheads. So that’s the first idea.
EMMA: That sounds really good idea.
SAM: Yeah that’s what I’m thinking about for a while.
EMMA: And also I think it really taps into your constantly wanting to do something new, I think the idea of all these different businesses that you can be thinking about all the time and the opportunity to keep buying new ones I think really would be really good for you because you like you like new product, new projects, you get really bored really quickly.
SAM: And there’s there’s other interesting things I could do. I could build a portfolio of businesses that are complementary towards each other.
EMMA: And connect them.
SAM: So I could buy an affiliate site to do with something, I could buy a brand that’s selling the sort of things you fill it so it’s promoting I could buy a little software as-a-service doing something or other all kind of linked and then help promote them yeah and then the SEO waterfalls between a lot of these businesses which could work quite well. So that’s something I’m very interested in, the only downside is as we said I would want to invest quite a bit of money into it and it’s not a very lazy business. This is one which I think will be quite a steep learning curve to getting it right, but I think is a great opportunity right now.
EMMA: It’s also not very you in terms of investing quite a lot of money upfront. You’d like to invest a little bit to start with.
SAM: I like to bootstrap, I like to test.
EMMA: And you can’t really do that with this can you? You can’t just buy one and have a trial. Well you could but it’s not really.
SAM: It’s not the best way to do it. The other thing about this type of business is the way to get the best return, I think, is to have a lot of connections with investment firms and stuff who I know would buy these businesses.
EMMA: Yeah which you don’t at the moment.
SAM: Which I don’t.
EMMA: But that is something you could work on.
SAM: it’s not that I could work on it but it’s not very me.
EMMA: No it’s not, going to networking events, dressing up in a suit, schmoozing
SAM: Schmoozing, talking to lawyers, face to face introductions, all that kind of stuff. Yeah be a lot of travelling up to London and meeting people in San Francisco or wherever.
EMMA: Maybe it’s something we do when we get back from traveling.
SAM: Maybe the problem is I’m not sure how long this opportunity. It’s a really big arbitrage and I’m not sure how long it’s gonna be there for so I think 2019 is the time to do it. All right let’s move on. That was the first idea. My next idea is more of a product based thing. The way we’re buying stuff is changing, has changed. especially here in the UK we’re looking for sustainability we want ethically sourced, we don’t want much plastic, we want to support local businesses so I think there is quite a big gap in the market to do the opposite of what a lot of a lot of other Amazon style businesses are doing which is instead of buying cheap products from China. Buy stuff locally and then build that as part of the brand. I think there’s quite a few advantages you can do that so for instance with food and drink actually makes more sense to do it locally than to import because I that’s a nightmare but also in terms of time to market, if you’re making lots of changes to things, having prototypes sent back and forth takes forever so I think that’s quite a big market. We’re kind of doing that a little bit with our gin at the moment.
EMMA: Or we’re seeing the demand for it.
SAM: We’re seeing the demand and the trend is seeing what our friends are doing they want to buy stuff that they kind of know where it’s from. They don’t want to support sweatshops, they don’t want to have too much, they don’t want the environmental consequences of goods being flown all over the world.
EMMA: When it can be made around the corner and they can pay a bit more for it
SAM: I also think that’s true with fashion. I think we’ve seen a little shift now of locally made fashion again so that could be quite interesting but that’s not an area I’m mainly thinking about. I’m thinking about toys, I think toys could be really good. So many toys are excess plastic like at Christmas we were with my cousin and her daughter was getting so many toys that you see she was always like cringing inside, she’s very careful about not using straws or whatever but when it comes to toys for kids, people are buying all sorts of stuff.
EMMA: Plastic wrapped in plastic.
SAM: Exactly so I think there’s a market there. I mean the toy industry is very much targeted at kids I think there is probably room to build a brand that’s targeted at the parents instead and focusing on that ethically local sourced stuff. I think it’d be quite fun what’s more fun than making toys? So I’m quite excited to do a bit of that. It appeals to my silly side. I would like to do something with a patent. I want to invent something and then have some patent protection on it because that’s something I’ve never done before.
EMMA: That’s interesting.
SAM: And I probably do that in the toy industry and basically invent a new toy so that’s kind of tickling my interest and I think there’s also potential for that to be quite a big brand. Next up I think there’s a demand for Amazon FBA style business in distribution in retail distribution. So Amazon FBA is a logistical network of warehouses run by Amazon where they charge you to store your stuff in them so for instance with my table-tennis business we’ll send in 600 table tennis bats. We’ll then pay a monthly fee and then if someone buys something on amazon, amazon will deliver it from that warehouse and I’ll get charged like a delivery fee. Classic distribution works kind of the other way around where the distributor will buy from you in bulk they’ll have a warehouse and they’ll have very high cash flow problems because they’re having to pay for all these random goods that are sitting around and it really matters to them if stuff doesn’t sell. They’ve got to be very careful about what they buy when they take on new suppliers so we found it particularly difficult to get in with alcohol distributors. They’re saying we don’t want another gin. Well that’s ridiculous, so for one of them we got letters of intent from 10 different bars who used them saying we will buy this gin if you stock it and that still wasn’t good enough for them that’s and they’re missing out on such a big market, especially if I’m right about the trend going smaller local premium brands. Artesan, hand made crafts because I think there is a good market for that. Food and drink, yeah that’s one of them. I also think shops as well so little retail stores. Getting a bit more boutique so to have a kind of Etsy style distribution list that they can look at you go into a little boutique toy shop or whatever and you say, oh well we’ve got all these small brands instead of having to buy, I don’t want to name any names here, but one of the big toy makers and it saves the business the hassle of having to go out and deal with a lot of different little suppliers themselves. We definitely found that bars were very happy to spend more money to buy through an easier distributor and just add it to their weekly order than to buy from us directly.
EMMA: Definitely all about convenience.
SAM: So I think that’s a really good really good market and I think they wouldn’t be too difficult to give it a go. So the way I do it is I choose like a little industry, maybe food or drink maybe alcohol things I am already doing it I then find a bunch of small producers all who had the same problem as us and then go and find a few bars to sign up, and then just build it from there. I think that can be done quite organically because it’d be quite easy to get a yes from the small brands because they’re really struggling and there’s so many little brands out there at the moment all doing really interesting stuff.
EMMA: This is something I can set up today. Yeah know the contacts.
SAM: Yeah we have good relationships with loads of bars and stuff like that.
SAM: Especially with food and drink like delivering your goods to people is a real pain and you really need large order sizes and the way to do that is for people to mix and match from different brands. One bar won’t want to buy six bottles of gin of us because it’s a premium and they go through one bottle a week and they don’t want to spend six weeks worth up front. They’d rather buy two and then get another two in two weeks time whereas this does like four or five different small brands that they work specifically local, sourced ethically all that kind of stuff I think they’d be really interested. That’s something I was thinking, especially the problem is we’re thinking of going traveling again. If we were hanging around Tunbridge Wells, I think that would definitely be a really good business that I’d want to push and again it is the sort of thing that could be really big. It’s a proven business model in direct-to-consumer. Can we make it a proven business model in businesses to business. The next one I was thinking was an Airbnb but for shop fronts so the idea would be that you would rent a shop front for a few days just to trial your product or for a week.
EMMA: I don’t know why this doesn’t exist.
SAM: It doesn’t and there’s been a few people who have tried it, someone like box park, that was their idea but I think they just balanced it all wrong. The shop fronts weren’t set up so the shop fronts had a really expensive cost of setting up. The box park is a retail is a retail outlet where it’s a bunch of shipping containers yeah and their initial business model was small brands who would get it on a three month basis to do a pop-up for that.
EMMA: Yeah so you’re rotating shops for the customers.
SAM: And that didn’t really work out for them and they’ve gone to look long-term tenants now
EMMA: Yeah and they’re all big brands.
SAM: I think three months is too long. You want a few days to a week. I think a lot of brands especially online businesses want a foothold in local and that’s something it can do. Especially brands who are trying to make themselves look more legitimate than they are. Having pictures of shop fronts and customers and all that kind of stuff is very important. I think that there is real diminishing returns for being in one place for too long. Let’s say I make premium high-end yoga gear. I could be on say the High Street here in Tunbridge Wells for two weeks and everyone here will hear about it and come a visit. And quite a few will buy. Six months in no one will ever come back in again. For those four businesses it’s a lot more value for them to be dotting around the place and moving moving town every few weeks or whatever. Paying a premium on the rent for that short term but in order to just get in front of physically in front of just a lot more people. So how would I do that. I think without investing a lot of money and doing it like a proper Silicon Valley startup, the way to do it would be to find a few landlords who are struggling to rent their place and then sort of approaching brands directly with this idea. Someone else who I think would be interested in this are small artists so currently artists who want to get in with a gallery will have to get approved by a gallery will have to kind of come to them and take a big cut yeah well I think what artists could do if they had this option is open a gallery essentially for a week, display all their art that they spent the last year working on and then try and sell it and they get to keep pretty much all the profits. I think that’s a good market. Anyway there’s loads of businesses I think this would be great for and I think it wouldn’t be hard to find businesses who are up for trying. I think the difficulty would be in finding.
EMMA: The relationships with the landlords.
SAM: Exactly so I think that could be another interesting one to do
EMMA: Well we already know the people that do that for the pantars, we know the people that look after the big shopping center here in Tunbridge Wells and that’s just in here.
SAM: So somewhere around here, everything is quite expensive, it’s still the high street booming, so I think this could also work well in places where the High Street isn’t blooming as much. We’ve recently watched the Hotel Chocolat documentary and they’re opening stores in places where the rent is dirt cheap where people don’t have much money but there’s still a demand for premium chocolate even though the people themselves don’t have much disposable income. Yeah I think those sort of places being there for a few days or a few weeks would work quite well. That quite excites me and I’d be signing up if there was one already around.
EMMA: Yeah definitely we would have used it for the gin and I probably would have done it for the supper clubs and you could have done it for the table tennis bats and you could have done it for like a workspace.
SAM: Yeah for coworking. I’ve got loads of ideas for experimental style cafes and shops and stuff like that which I’d like to trial without having to sign up for a five-year lease. And you’re happy to pay a little premium for that. I think for product launches it’d be great, we’re releasing a new flavor, having a shop front for a few days for that. I think for bigger businesses even people like PwC and professional services that works quite well. You could have like a drop-in center for people. There’s loads of things.
EMMA: I like the idea that it’s a pop-up for particularly these online businesses so it’s not just about what we’re gonna make X number of sales in this week in Tunbridge Wells, it’s about we’re building this awareness and these customers will buy this product physically from us today and then hopefully when they run out of that product they’ll buy it online. I think that relationship is really good and being out and for those customers to be able to find out about your product and speak to the owners of the business, they’re obviously really passionate about it and you’ll remember that and you’ll want to buy more.
SAM: Yeah especially if you’re doing something like shampoo. If you buy shampoo from a random brand online, you might do it because you read a good review about it. Much better would be able to go try out and then be a customer forever. Because the barrier to entry for a physical business online is pretty much zero. With Amazon FBA which we’d been talking about you can have your own warehouse, you can do Next Day Delivery, all for almost no money. But the barrier to entry to having a retail location, it’s still very high. And this would be a way to get around it. I mean they could have all the licenses sorted so you won’t need to bother about it all the insurance, alcohol licenses, health and safety, all that kind of stuff already done for you. I think that would be really good. So those are the ones I’m thinking about for me. There’s a few other areas I think there is a lot of opportunity in right now, and probably the main one so I think there’s a lot room for new style agency or publicist or SEO firms that are targeted at these new style personal brands so what I mean by that I mean people like Instagram influences so you’ll have agents who work with singers and do all the promotion for them, getting them booked on TV all that kind of stuff. We don’t have that for someone who runs a course on how to learn table tennis or whatever.
EMMA: Well there are people like that but they’re just very few and far between and they’re not necessarily good.
SAM: They’re few and far between and there isn’t really any SEO agency that I’ve come across doing that.
EMMA: Because you want one.
SAM: Because I want one, I’ve been looking for one and I’m looking for a publicist as well so I think that’s a big opportunity I also think that is true not just for people like Instagram influencers but also for professionals, so let’s say you are a lawyer and you really want to get partner and you want to build your brand. You’re earning 120,000 pounds a year, I think there’s a lot of people who would be willing to invest 20,000 a year say on building an online presence for them in order to increase their chance of getting that partner. It’s like anything isn’t it, if the business you work for feels like they’re getting something out of you, they’re more likely to hire you. If you’ve got this online presence, you’re well-known for certain search terms in law, you’ve got relationships with potential clients, they’re going to pick you rather than your competitor who’s just busy, head down working in the business. Same with people in finance. A lot of City businesses I think, city companies I think it’s worthwhile. People who are on a real career path and want to become a high flyer to invest in their own personal branding and potentially hire an agent or a publicist to develop, to help them to do that. Yeah like a social media manager or something like that so I mean all that kind of stuff has got a bit of them we have opportunity and I mean it’s it’s mainly 2019 I think it’s the time to do it because there’s no one really doing it. If it gets to the point that everybody here is trying to get partner at the law firm has their own little PR agency then it loses its value. When you’re the only one, that’s worth quite a lot. Something that would be another good one. There’s a few other professional services I think like that that could be good. Accounting is a classic one, accounting for online physical product businesses. Amazon businesses, stuff like that. There’s not really many people who are good at that sort of stuff, there’s a lot of opportunity there. Same for lawyers, kind of the idea of you know GDRP and how what you are allowed to put on, what you have to declare when you have to pay VAT, what are your liabilities.
EMMA: But also patent stuff and competitors copying, where are your legal rights. Again all the stuff that have challenged you and you’ve been looking for professionals to help you.
SAM: Yeah and who don’t charge an absolute fortune because the problem is when you go to a lawyer and you say I’m trying to get someone who’s copying my products on Amazon kicked off yeah they like oh well I’ve never done that before. Well I know a bit about trademark and all this kind of stuff.
EMMA: But they don’t know anything about that specific issue.
SAM: So you’re paying them to work it out and you’re paying them a lot of money, you’re paying a partner 500 or 600 pounds an hour. You want someone is an expert online and all the intellectual property stuff that goes along with it which is a big thing at the moment, like Instagram what can you get away with sharing or retagging, all this kind of stuff and how do you how do you help protect what you’ve created.
EMMA: Yeah who ultimately owns the product or the image or the marketing yeah and yet what rights do you have over it and how do you protect it?
SAM: There’s a problem at the moment on YouTube where if you create a video and someone files a copyright infringement against it, they’ll just take down the video and there’s this process to get it back put up which can lead to you getting your account closed and the idea is that if you keep going you eventually have to go to court and it’s kind of who blinks first. If you drop out before the other person drops out it, it goes as a worse and worse strike on your YouTube account you can have it deleted, so what companies are doing is if someone posts something really critical about them, they’ll just put a copyright infringement on it.
EMMA: That’s awful.
SAM: And YouTube have decided that they’re not gonna play adjudicator. They’re gonna remove it until you go to court and the court decides and there’s like three or four steps before you get to court but if you’re the one who blinks first, it’s gone but if both of you are happy and some of these companies have got such huge legal departments they don’t mind.
EMMA: It’s so unethical.
SAM: It’s all about now isn’t it yeah, so if you can stop something being on YouTube for a few weeks.
EMMA: It’s worth your time.
SAM: That’s worth you spending quite a few thousand on that yeah and the consequences are very one-sided because you could push this, delay it for a few weeks and then blink and then go and get it re uploaded and it won’t cost you a thing because you don’t need to go to court. You can just stop it up to a point. Whereas with them if they blink first, if they oppose it and then push it and then blink first, they could lose their whole YouTube account.
EMMA: Which is worth a huge amount of money to them.
SAM: This is their livelihood and I think we’re just touching the surface. Especially on the international side with e-commerce, it’s a big issue with fakes and people copying it because a lot of them won’t be based in the same country as you so the traditional ways of enforcing that kind of stuff doesn’t really work anymore, so there’s definitely room for professional services that are aimed at smaller. Well not necessarily smaller businesses but more like one man band businesses who’ve got these big empires whether that be a content empire like a YouTube creator or a physical product creator empire like us with our table tennis equipment being everywhere in the world, and still just run from here in this flat. The other business opportunity that we haven’t spoken about that I think is quite highly likely that I do is back on the gambling stuff. Listener if you do not know, I used to be a professional gambler and I made money from a bunch of different things. Things like matched betting which taking advantages of signup bonuses, things like arbitrage which are hedging your bets and taking a profit, basically finding bookies who are slower but one area that I tried to get into and never really succeeded and it still still bugs me a little bit. I never made it work is on trading and basically writing kind of algorithmic trading bots that can monitor market patterns and look for opportunities and do a bit of AI type stuff, kind of take a lot of stuff that worked on financial markets and translate it over to the much more immature betting markets. Previously I spent quite a bit of time and money on this sort of stuff and never made it work and that still bugs me and I think the opportunity is still there.
EMMA: So what do you need to do that? Do you need a development team?
SAM: No no, I just need to spend the time on it.
EMMA: Can you do it all yourself?
SAM: Probably yes.
EMMA: Do you want to do it all yourself?
EMMA: I’m not saying I’ve got an answer for you, yeah I’m just interested to see.
SAM: It’s one of those things that might never work.
EMMA: So therefore if you do it on your own then it’s just your time you’ve lost.
SAM: And the money you spend on it because you’re betting with money.
EMMA: So that’s definitely something to do when we’re traveling yes quite easily in the work space in their co-working spaces.
SAM: Maybe yeah, it depends on a few things. Such as, a lot of countries don’t allow gambling as illegal.
EMMA: Oh hadn’t thought about that.
SAM: Yeah is there a long list of those countries. Yeah it’s most countries don’t allow online gambling especially like an Asian country or any kind of Muslim country won’t allow it, even the USA doesn’t really allow it. You’re not allowed in France, a bunch of other countries a lot of countries you can’t.
EMMA: It’s not something I’d ever thought about.
SAM: So yeah do I then tunnel the IP address through to UK? Anyway, it doesn’t matter this is all a moot point, that’s just the logistics of how it would be done. But it could be done, it’s something I’d like to do and it’s quite locally. I might look into that. There we go there are some of the ideas I’ve got for 2019.
EMMA: What do people think?
SAM: What do you think? Any of them jump out to you?
EMMA: They all sound good, that is the problem. I mean obviously the first one is the most exciting and I think you suit it very well. It’s quite ambitious, it’s high stakes, you’d learn a lot from it. I like the idea of you building a team of freelancers and getting involved in lots of different types of businesses that you don’t know much about. I think it plays to your skill set.
SAM: Any issues? The easiest way to lose a lot of money is to invest in a business that goes wrong and so there is the risk you know of putting too much into it and then losing a lot of what we already have.
EMMA: Yeah and as I said, it’s quite unlike you to want to spend a lot of money on a new business and because you like to bootstrap it so it’s quite out of your comfort zone, it’s quite risky. I think that appeals to you.
SAM: It does appeal to me. I’m a bit self-destructive so I like betting everything on red.
EMMA: I feel like you just say well I would just do a bit of online gambling get it back.
SAM: That’s a problem right, we’re still young. What’s the harm of starting again from scratch. Is this a case of life is so comfortable that we need to risk it all in order to keep the keep the fire alive
EMMA: I really like the principle of the professional services. I like the idea of you kind of recruiting people and helping to set them up, obviously you’d need to partner with lawyers and accountants and blah blah blah. It’s not about new training in these areas, you’re helping individuals to market themselves. Basically help with their strategy in their business plan and then connecting these people with customers. I think you’d be really good at it, these resources you could then use for your businesses. Yeah I like that idea a lot.
SAM: Yeah maybe I mean the problem with those sort of businesses is I need a better way, I am so out of professional services and I’ve never been in professional services that I just don’t know the people, I don’t know the culture. I don’t really know what I’m up against. Whereas a lot of the other ones, I can see the route to market, I can think of like the A to D steps I would take to get that whereas with this one I’ve got to find the customers and I’ve got to find the people to do the job and I’m not entirely sure where to start with either.
EMMA: Yeah and I think the fact that you don’t know the answers is this incentive to do the business, not a blocker. I think that it’s a real advantage that you don’t know how slow and bureaucratic the professional service industry is. I think you coming in with a completely new approach is a positive.
SAM: Yeah potentially. I should talk to my lawyer about it.
EMMA: And I know a lot about professional services.
SAM: Yeah you couldn’t wait to get out.
EMMA: I spent my whole time there learning about the politics and the structure because it absolutely fascinated me. I spent all my time meeting with people for coffee and finding out what they did, what the politics was, where their issues where because it just completely baffled me.
SAM: Well, there we have it. Seven business ideas that I think are really good opportunities in 2019 let’s run through them really quickly. The first was flippin online businesses. The opportunity is to buy a business that is selling as an online business, rebrand it as a local or a traditional-style business and sell it on. Secondly, I think that if you’re creating a product based brand, there’s a big opportunity to look into local sourcing, sustainable, ethical all that kind of stuff. Do the opposite of what everyone else is doing which is buying cheaply from China and instead buy local. Next up was I think there’s a big market for an Amazon FBA style company but in retail distribution. So such as an alcohol distributor. Next up was an Airbnb for shop fronts so somewhere where you could rent a shop front for a few days. Either for your kind of online brand or a traditional style business if you wanted just to move around the lot. Or if you wanted to try out an idea. I think there’s a big area at the moment for traditional agencies or PR companies or SEO people to focus on individuals rather than say celebrities. So city folk lawyers and stuff like that to help them build their own personal brand online as well as of course online entrepreneurs and people, people like me who’ve got a little Instagram presence and are trying to build our personal brands. And I also think there’s room for other types of professional services such as lawyers and accountants. People like that for these kind of new style one-man-band online businesses whether those are content creators such as youtubers or sort of mini empires. Many international empires of product businesses like our table tennis business which is sold in many different countries but it’s still just only a few of us involved in it. And then the final one which is a bit of a wild card but I still think is an opportunity which is trading on the betting markets. We didn’t talk too much about that because it’s a bit random and a bit more specific to me. Alright well thanks for staying with me in listening to my ramblings.
EMMA: It’s very interesting. I’ve been waiting for this list for a while.
SAM: Listener if you have any questions or you feel like to give it a go or if you know have any businesses who are already doing these things, please get in touch you can reach me at hello at sam priestley dot com I’ll put the show notes up and I’ll write a little bit more about the different things on my blog which is sam priestley dot com. Apart from that good bye.
“In university, I had this fire up my ass which was if I don’t find another way to make money. I’d have to get a job and work at a bank.” -Sam, on business motivations while still in uni
Sam tells the story of a few businesses he tried to start while at school and talks about the type of people who are attracted to such schemes.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
01:36 – Student Swag, Sam’s course at uni
03:20 – “Incentive arbitrage”
05:25 – First meeting and sign up process
06:10 – How much did Sam make in this business and for how long did he run it?
06:48 – What was pioneer projects?
09:00 – People who came to Sam’s class who ended up becoming wildly successful
10:27 – Emma’s first jobs
13:08 – What was Sam’s motivation for making money at uni?
17:00 – The Gambling Times offer to buy Student Swag
SAM: Hello and welcome back to another episode of the lazy entrepreneur. I’m your host sound Priestley and as always we’re joined by my lovely wife Emma Priestley. Emma today I’ve got a story about another business that I started once upon a time that I don’t think you know anything about.
EMMA: You’ve said this many times
SAM: I know that’s quite funny. How are we married and there’s all these random businesses that some of them I spent a lot time on as well.
EMMA: Well it’s very you. You don’t like to talk by yourself.
SAM: I don’t like to talk about myself unless we’re on a podcast or I’m writing a blog post
EMMA: Or you’ve been weirdly reminded of this business
SAM: Yeah yeah maybe we’ll be friends and they’ll bring it up and there’s some embarrassing things about this business. It’s not really embarrassing just cringy. Yeah might have told you at the time we’ll find out in a minute. It’s called student swag does that ring any bells?
EMMA: So what’s funny about this is that we went to the same university at the same time and I remember seeing posters of student swag and one of my friends who lived in the next corridor also called Sam was involved in it.
SAM: That’s so funny, so students swag was I like a course that we put on at university are there were two friends and it was to teach people how to do matched betting, professional gambling, and what we did is we put together a course where we would kind of handhold everybody through making a thousand pounds say and there were two sections to it so the first one for a thousand pounds and then people graduated and could go on and do another module which would be a thousand pounds. Match betting is basically where you take advantage of sign up offers that bookies and casinos offer and so the way we would do it is each week we would release a video which would have just me actually doing the offer. We had a website with like an odds finder and it would be very much click here click here click here click here withdraw your money.
EMMA: Very simple
SAM: And then the next week would be another one and then each one got slightly more complicated so that by the end of it people had the skills to go off and do on their own. The problem we had with it was how do you tell people about making money from gambling.
EMMA: Well yeah I mean it’s basically a get-rich-quick scheme run by students I mean how dodgy does that sound?
SAM: How scammy does that sound? And the other problem is we didn’t want people to know we were doing it basically because we were doing it all for ourselves at the time as well and we had this idea that if the bookies worked out what we were doing they would clamp down on us and might change the offers. It was very much especially in those days it was, this was before it was even called matched betting. There were a few different terms that people used we called it incentive arbitrage because you’re arbitraging any incentives that bookies give you to sign up. And so what we did is we went around campus, went around the university and put up loads of pictures with something like, “Do you want to make some money?” Do you want to make money in your spare time
EMMA: See I remember the posters but I don’t remember the content of the posters.
SAM: Do you want to make money? If so come to this room at this time on this date.
EMMA: How many people turned up?
SAM: We thought someone was gonna turn up so we booked a room at the University, we made a little presentation about it.
EMMA: Little slideshow
SAM: Little slideshow yeah a little slideshow with some some stupid images on it.
EMMA: Did you wear a suit?
SAM: I can’t remember, probably well, no I wouldn’t have had a suit so now and we had free printing in the computer science department so I printed off hundreds of these pages in there and ran around sticking them up everywhere.
EMMA: So how many people came to the first one?
SAM: Quite a lot, 70? Somewhere between 50 and 100. The place was full.
EMMA: Did you know any of the people there?
EMMA: That’s amazing isn’t it
SAM: We didn’t want to tell anyone because we were so embarrassed by it so we gave this presentation kind of explaining the basics of it and then asking people to sign up to this course and to sign up they had to go to a website. Nothing really on the website just a sign-in page didn’t say really say anything on the website. It even had a different URL or something we didn’t want it to look like it had anything to do with gambling. Basically we didn’t want random people signed up because we had this idea that maybe the bookies would work it out and there might be a stooge who would try and shut us down and then on the website was a forum and we had a little odds snatcher type thing and then each week we would release this like this video series on how to do it and it is also a forum for people to ask questions and stuff like that and we also interspersed it with a few other lectures and things like that and yeah. Yeah it was pretty popular.
EMMA: It sound weirdly successful.
SAM: It was weirdly successful, we made a decent amount of money as well, I think we made about ten thousand pounds out of it. We ran it for two or three terms so a fair amount of time. We had quite a few graduates people who did this course, some people really got it and then took it and ran away with it.
EMMA: So was this the first business you did?
SAM: It’s hard to pitch back I was doing loads of weird businesses then. Well we were gambling for ourselves back then but this was around the time of grown goms, this was around the time of I had a little web development firm called Pioneer Projects. I told you about the tech startup. I can’t even remember what it was. I had some tech start up where I put loads of posters on campus being like, “do you want to join a tech startup?” Booked a room, a bunch of people came along, started a business together. I can’t even remember what it was now.
EMMA: That’s ridiculous.
SAM: Kind of the reason I want to tell these stories is the thing I find most interesting about it is the other sort of people who would go along and what they’re doing now because there’s something about someone who would see a poster on the side of a wall that says, “Do you want to make some money” and go along to it.
EMMA: Yeah there’s a lot of trust in there. And a leap of faith.
SAM: A leap of faith. It’s a bit naivety. It’s a bit of self confidence that they’re able to go and then ascertain whether it’s a scam.
EMMA: Yeah and also the confidence that they will be able to make it work. It’s one thing someone telling you how to make money but it’s another thing if the responsibility is on you to make it happen.
SAM: Well something I want to know is all those people who turned up to the first ever Student Swag lecture, how many thought they were just wasting their time? How many thought this is almost certainly gonna be nothing, let’s find out. And how many actually believe that poster? Probably hardly any. Students got loads of time. They were just like I’m gonna see what it’s about and then work out because of the people who were in that who came to that thing and also with the tech startup some of the people who came along to that as well, those people are, I still keep track of quite a few of them and pretty much, of the people I know who have become very successful in what they’re doing, almost all of them were people who came along to these things.
EMMA: So what is it about them?
SAM: All different things. There was one guy who went off and started an Amazon business at the same time I did and now that’s worth millions and millions and millions. There was someone else who became a trader that did really well. On the tech start-up there was someone who went off and started a business of his own which then got acquired for quite a few million. There’s kind of like random stories.
EMMA: And you know one person you’re talking about, that’s really interesting.
SAM: Yeah it is, what is it about him? Is it optimistic, is it naive?
EMMA: It’s risk taking.
SAM: It’s risk taking both with your time and that kind of opportunity of getting burned.
EMMA: Yeah from a young age.
SAM: From a young age, yeah it’s like when they talk about the origin story of entrepreneurs and it’s almost always, you know, they were selling sweets in the school playground. They were whatever delivering newspapers or they had some sort of scam or business they were running. Do you have any scam or business you were running as a kid?
EMMA: No no my first job was paper around and then I worked as a gymnastics coach which paid me really well something like 15 pounds an hour and then waitresses.
SAM: And just because you wanted to earn some money right? You weren’t selling sweets out of your locker or anything like that?
EMMA: No it didn’t even occur to me, the only other money potentially I could have made is that I used to organize a lot of events at school which were ticketed parties so I could have, I was a bit more confident in commercial, taking my cut for my time. Which of course I never did, that money went back into the school. It never occurred to me because the reason I was doing those events was because I really enjoyed organizing them, I really enjoyed attending them and I felt that if I didn’t put the time into it and make it a good event that no one else would.
SAM: I think I was always trying to start things. When I was in primary school, I started a school newspaper.
EMMA: That’s definitely one of your proudest facts, you say that quite a lot which is very unlike you.
SAM: I started a computer club, but none of these things ever had any money to it.
EMMA: I think it is just the experience, working with other people.
SAM: But at the age of like 8, why was an 8 year old starting a computer club?
EMMA: Because you thought it would be fun.
SAM: I thought it would be fun and that is still what I do with most things because I thought it would be fun.
EMMA: I thought there was a reason behind the computer club something about not having to play outside.
SAM: Not really I just liked computers. Eventually I turned into a computer game club and we would play like Import World or something.
EMMA: I love that game.
SAM: Yeah so good. Well I didn’t do much at secondary school I don’t think I’ve ever started anything there.
EMMA: Because you didn’t have the time.
SAM: No probably didn’t have the time I was rowing and doing the cadet force and doing church stuff and thinking about women and there was university but then university I had this fire up my ass which was if I don’t find another way to make money I’d have to get a job and work at a bank.
EMMA: Which is a good motivation right?
SAM: It’s good work motivation but also not having any money I worked as a waiter when I was 16 or so and absolutely hated it so I thought if I could find some other way to make money then I’d work out better
EMMA: Because you wanted the money.
SAM: I wanted the lifestyle that went with having the money yeah I didn’t want to have to work for it. When I was a fresher I did a did a nightclub event with a friend of mine.
EMMA: Another hilarious story.
SAM: That didn’t work out.
EMMA: I wish I’d been invited to that.
SAM: I invited I got a weird friend who’s like probably my oldest closest friend from primary school who’s now like a full-time activist and he’s awesome but an absolute weirdo and I got him to come up for the promotional stuff for this event. So same sort of thing where we were just in the main area, a quad or something of the university. Me and him were handing out fliers for this event and talking to people and trying to convince them to come.
EMMA: How did that go down.
SAM: I think he was more interested in talking to the girls than going to the event.
EMMA: Not much has changed.
SAM: He’s very confident right, he had no shame in like going up to random people and being like do you want to come to our event.
EMMA: What you want right.
SAM: Well now I wouldn’t have the guts to go around Tunbridge Wells and put up posters saying come to this event and learn how to make money even if people turn out people come and that sort of thing but there’s a businessman in Tunbridge Wells who puts on loads of events and what he does is I think it’s like 7:00 a.m. every morning he’ll go out and put fliers and posters everywhere.
EMMA: The week of the event.
SAM: It is Friday because he knows on the Thursday is when the council takes everything down.
EMMA: No it’s that they can’t process something that’s less than a week until the event so if the events on Saturday he puts up the posters the Sunday before so the council can’t act quick enough to take them down they need at least two weeks. So if he put the posters up two weeks before the event the council will take them down.
SAM: Very clever. A bit cheeky. I’m sure people weren’t allowed to put up posters for this student swag, this gambling thing. Yeah I’m sure the Ethics Committee had something to say about that.
EMMA: Yeah but you just put them up until someone takes them down. There’s no real harm there on that scale.
SAM: No so why did we start student swag. We were running it for a few terms and it made decent money but the problem was that it was an incredible amount of work and we were doing the gambling for ourselves. We were making it very successful, going from strength to strength and everyone we were training up to do the same thing was competition and so that was a business where that could have gone on to be something very impressive but the other thing is we didn’t see any scalability to it because we were like, “oh we got to go out, there’s only so many people in our University, how would we scale up” or whatever whereas now the people who are making the most money out of professional gambling are companies like OddsMonkey and Profit Accumulator where you pay a monthly fee for and they teach you how to do it and then making, they’ve got 60 thousand users all paying six pounds a month or something like that. They make an absolute fortune. That could have been us. We started before they did. None of those other places existed when we did Student Swag. And when it came to close it down we just said we’re gonna close it down and another company so it was a popular forum back then called the Gambling Times, they asked to buy it off us because they wanted to keep doing it.
EMMA: And did they?
SAM: Well we came to an agreement but it never really went through and I can’t remember why there was some reason. I think it was a no money deal. It was like we would take over some of their revenue streams or something else that interested us more and they take over the students swag.
EMMA: So you were getting paid but just not in a lump sum and it was for a long time rather than just a one-off. I mean it sounds good in principle, especially to a student.
SAM: I don’t know why it didn’t come off. I actually interviewed the guy behind that, he’s one of my early blog posts you should check it out. Yeah he’s quite a good interview, interesting guy. He lives in Thailand now teaching English or something, he kind of retired, made a bunch of money gambling back in the early days. He’d been doing it for quite a long time when I got into it.
EMMA: Maybe we’ll go see him in Thailand.
SAM: Alright well this was a bit of a weird episode. The reason we recorded this one is because we just recorded another one which was a bit more on point and there was a real problem with echoes in it so we thought, we might need to get rid of that, we might as well record another podcast and so I didn’t have any topic I wanted to talk about, but I thought this would be an interesting story to tell. I can’t believe you actually knew people who’ve been doing it.
EMMA: Yeah we went to the same university at the same time.
SAM:We might not have known each other.
EMMA: We didn’t know each other at the time but our universes…
SAM: You probably never would have dated me if I was putting up posters.
EMMA: We had very different causes, we had very different ideals.
SAM: Alright well thanks for listening everyone, as always if you have any feedback, if you like this sort of random style then let me know. If you don’t like it let me know as well at hello at sam priestley dot com. Until next time, goodbye.
“We had to bribe someone to get the car through customs, then we had the car sitting around in the dusty streets of Malta, waiting for some buyer, we kept having swaps for stuff we didn’t particularly want but didn’t really have a choice about, but it kind of worked. And I think if you’re there doing it the whole time, it makes sense.” -Sam, briefly summarizing the business
One of my first businesses was to buy used cars in the UK and import them into Malta. Sam tells Emma the story of the extreme naivety that led to this business and why it wasn’t as crazy as it sounds.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
01:00 – How Sam and his friend came up with the idea
03:35 – Sam’s first physical business
04:50 – Why does starting a car importing business seem outlandish?
08:37 – Contracting out the website on upwork
11:07 – Flipping cars
13:02 – Bribing to get the car through customs
14:51 – Talking to dealers to get the cars
16:30 – The viability of the business
Sam: Hello and welcome back to another episode of the lazy entrepreneur we’re your hosts Simon Emma Priestly
S: today I’ve got a historical subject for you I’m gonna tell you the story of a business I started long before I met you I don’t think you know anything about I think I’ve ever spoken about it to you before
E: that’s very ominous
S: it’s not ominous at all in fact it is a very classic type of business one that’s very easy to understand and it kind of makes sense why we did it and that is we decided to buy used cars here in the UK import them into Malta which is a European country and sell them
E: wow that’s not very online
S: nothing online about it at all it’s one these ones where saw an opportunity an opportunity so we went on holiday to Malta my friend he’s really into his cars Toby was wandering around and said these cars are really expensive here oh yeah he says they’re much cheaper back in in the UK but they’re basically the same cars they drive on the same side of the roads so I wonder if there’s an opportunity here to make some money importing cars and I decided to look into it and work it out and we spoke to a Maltese accountant who kind of gave us the lowdown and told us you know what cost would be involved in the cost of importing and getting an MOT out there and the road tax and that sort of thing we spoke to some freight forwarders some transportation companies to work out how exactly you get a car from the UK to Malta I just did a bit of research really
E: that all sounds very sensible
S: can you believe it well it’s business you see an opportunity does the opportunity really exist and really in this case it kind of existed so the reason cars are so expensive is kind of all cars are imported so there’s already that threshold of cost and the import duty they charge on imported cars is very expensive but it’s also a bit weird so some cars are very cheap to import the import duties very low and some are really expensive a lot of it works out to whether they’re good for the environment so the pollution aspects of the car basically you get two cars which would be exactly the same so like whatever the 1.9 liter versus 2.1 liter engine and one will cost a thousand euros to import the import duty and one will cost 8,000 and so the market doesn’t quite reflect that people just kind of import whatever cars they want and it’s kind of a weird opportunity where we saw it over some cars we could import and make what we thought was quite a good bit of money
E: sounds good it also sounds quite crazy
S: yeah it’s a bit ridiculous isn’t it I remember so this is 2011 so this was a long time this was eight years ago how old will I be doing I would have been 21 yeah just finished university yep
E: and that’s what I was gonna say had you done any other businesses before this
S: I was still doing all the gambling stuff
E: but that’s very different from importing cars
S: you can read about so I got an episode on professional gambling which is where I started earning my money but this is probably the first real business we did
E: Physical business
S: And it was a real business so in order to import cars into Malta we had to set up a Maltese registered company so we spoke to an accountant who did that for us it cost 600 euros to get that all set up so not even not that expensive really when you think about it and then we went for it we started to trial with one car to begin with and then the idea is we would we would scale up E: sound sensible
S: sounds sensible well what do you think well obviously I’m not still doing it now do you think it worked out
E: it just sounds crazy
S: so yeah why does it sound crazy but why is this and why is it crazy to start an import-export
E: I think part of it is the size of a car yeah it’s like the visual of you and Toby finding these cars in England putting them on some sort of like ship and then being the other side like being in motor to like greet them like it’s a very silly image at my head yeah yeah and why is that so different from you doing table tennis bats yeah
S: and why do you assume we would have to be there to buy the car and why do you assume we’d have to be there pick it up
E: I think there’s something about a car and it being very like an old-school business you need to be there to negotiate the deal it’s all about building relationships face to face that’s how I see it’s quite wheeler-dealer
S: and I think that is one of the problems we run into yeah so let me let me give you a spoiler to how the story ends in it was a successful business we made about 10,000 euros out of it and then decided to not do it anymore the kind of hassle around it wasn’t really worth it but it was something that we thought did have legs and if we really worked it could have become a really successful business but just a bit of a nightmare and the nightmares of what I’m gonna talk about here and most of the nightmares were more due to the different culture of buyers in Malta and the way to do business there then how we do business here
E: well that is interesting and that’s not what I would have assumed
S: actually all the stuff you’re talking about you know us having to like pick up the car like we found someone company for a thousand euros they would go to the dealer pick up the car and take it all the way and deliver it to the customer in Malta and we kind of had this idea that we would have relationships with dealers here in the UK here we could buy cars sight unseen and dealers in Malta who would buy cars from our sight unseen we’d just be doing this middleman type thing they say to us in Malta can you source us this car for this amount of money and we would say we’ll look into it and then we go and find a dealer who had that car and then just basically take a commission on the difference
E: yeah sounds good
S: that’s one aspect we attempted and the other aspect we also attempted was trying to sell direct to customers so let’s dive in one thing we thought is that we really needed someone in Malta so we had a friend who had a history of working for car dealers in the UK who had just split up with his girlfriend I was looking for a change in life so we said to him why don’t you start this business with us you can do 50% we’ll pop all the money and this kind of thing, we can run it from here in the UK and you can move to Malta and run it from there and that was Rick and that’s exactly what he did we found a car where we thought we were getting a good deal here in the UK we checked so there’s a website where in Malta where you can check how much import duty would be we talked to an accountant who told us how much the VAT would be I’ve got all the numbers here not it’s not interesting but yeah but whatever it was I think it was about 300 euros for this and that it was the the shipping was a thousand euros the import duty was probably another thousand euros that’s what we did we took out this little car and go there and then start trying to sell it and that’s kind of where it sat for a while it took us about two and a half months to sell it in the end
E: what why
S: that is a good question why did it take us that long and the same thing happened for the next car as well so that car was a BMW 1-series and the next one was a Mini Cooper both of which we tried to sell direct to retail to customers
E: quite a nice-sounding cars I don’t know anything about cars but they sound like the kind of car you’d want to buy
S: very nice a top car I’d like to have and so we created a website I paid a web developer 250 pounds on it’s called Odessa now it’s called upwork to make a nice website for us we were called imports Malta or something like that something or imports MT I think it was a bit lame we had our little company registered out there and we were trying to sell them and one of the problems we found was that people in Malta really like to swap things
S: generally they don’t buy stuff out right they have laws over there about buying stuff on credit that basically loans with interest are illegal
E: that’s really interesting so people aren’t buying new cars
S: so they can’t buy a new car and the only way they can buy a new car is by swapping something so you’re like this one person offered us we’ll take two cars of us in exchange for a house
S: yeah it’s quite common the people will let’s say you inherit an apartment you want a new car E: were you interested – what was the house like
S: I can’t remember
E: I mean it sounds like you’re in a silly enough position that you would have considered it. This is getting weirder and weirder
S: It’s a weird story so we’re offered houses eventually we so I think the Mini Cooper we swapped for a BMW z4 which is like a much nicer car and that we then swapped for something else we swapped that for a convertible Peugeot with some extra bit of money on top of that and this is the problem we had we just kept on flipping these cars taking a little bit of money each time because people the sort of people buying these used cars don’t have the cash to buy them outright
E: Had you done research into the consumers in motor and how they bought cars you just looked at the price and that was it
S: no I didn’t do anything on that side so we had to see we just kept kept swapping cars and it took us ages the second car took us 7 months to sell to get to go from importing into the country to getting the money from that final swap
S: finally getting the sale to someone who paid us actual cash for it which is quite a funny place to be in and like what do you do all these cars so at one point we looked into renting a garage we found a 12 car garage for about 500 euros a month thought maybe once we scale up we’ll get that for time being we’ll just park it on the side of the road somewhere in Malta Rick had the Maltese phone number so if someone saw us on Autotrader or on our website they could phone him up he’d take the car to them or they come to him
E: that is hilarious
S: we went on holiday a few times to Malta and whiz around in our convertibles it was all quite funny really but it’s all a business which could have turned into something really big something I forgot to say was that the first car we imported it arrived to Malta got to customs and just sat there
E: oh no
S: ok like what’s happening
E: did you have to pay them off
S: yeah you’ve guessed it so eventually we discovered that the done thing is to give a bribe to the customs
E: what we talking in terms of money
S: good question
E: is it huge or is it like almost like an admin fee
S: I you know what I have no idea how much we ended up paying
E: Because if it’s like 50 it’s like neither here nor there
S: I didn’t even write it down so I can’t be very much
E: but if you took it like a thousand
S: it wasn’t a thousand euros it was maybe it was like 200 euros or something
E: That’s not too bad
S: and then by the weekend the car had been released
S: and we never had that problem again it was just the first day and maybe it was like now that they know us type of thing yeah that was he building a relationship with him that was it and maybe some other dealers in Malta wanted to sabotage us but maybe not so we had to bribe someone to get the car through customs then we had the car sitting around in the dusty streets of Malta waiting for some buyer we kept having swaps for stuff we didn’t particularly want but didn’t really have a choice about but it kind of worked and I think if you’re there doing it the whole time it makes sense and we were buying the cars kind of sight unseen here in the UK so dealers we kind of trusted we would get in touch with and they would say we got this car we’ll give you a deal on it we would then take it get it over to Malta so that was the retail side a big headache you could make it work if you treated it as a serious business and to be honest if you’re trying to get in to starting a car dealership what a better way to go you don’t need any need any high rents you’re just doing a little bit of pokémon on the street you can get a cheap garage for a little bit the other route we took was talking to dealers out there and asking them if we can source cars for them so for reference with that Mini Cooper we bought it for 10,000 euros the total sold price by the time we got rid of it was twenty thousand euros and after all the costs in between we made a little over five thousand euros so the profits were pretty decent
S: the BMW 1-series or seven thousand eight hundred euros we ended up selling it for a little eleven thousand nine hundred and made about 1800 profit
E: I guess yeah it sounds good but then it’s a huge amount of time and effort
S: But if you’re scaling it up you know if you’re doing quite a few it does make sense and there were good margins it just wasn’t an online business, it wasn’t one I can do sitting in my bedroom it was quite an old-school business
E: which isn’t really you
S: and then the final route we took yet was talking to dealers so this is the route we wanted to do the whole time we thought we can make five hundred to a thousand euros a car but basically have a buyer lined up before we buy it and this took us a long time to get sorted because it’s even more old-school the way that people work there than here so you go talk to a dealer and they just wouldn’t want to deal with you they wouldn’t want to buy a car off you so eventually after building relationships with people I remember one of them offered to swap us a watch for a car that kind of weird stuff like that some sort of Rolex for one the cars
E: for them it’s fair game that’s a legitimate but for us obviously that brings alarm bells and it sounds very dodgy
S: sounds very dodgy to me and a few people were like yeah we’ll do it but we’ll pay you afterwards and I was like no I don’t really trust you eventually we found someone who wanted he wanted a bid on the five series and was willing to pay upfront the cost of it great so we basically sourced it told him how much it would be and added our commission on top and did that
S: and that was a great one it took about three weeks for the car to get from the dealer to him it was all kind of done I don’t think I ever saw the car it just went straight from them to them we’ve got the money upfront and we made wherever it was 750 euros off that so I feel that this is an example of a business that we went into completely naive we made loads of mistakes but it still could have been translated into a into a business and as you said it’s just a bit silly so I thought you might like the story
E: yeah it is a very silly story and it’s so like you know how you say it’s good to be naive going into setting up your own business it’s just like so extreme naivety it’s comical
S: like would anyone have predicted we would be able to make it work
E: no definitely not definitely not and
S: I think knowing me now you’d still assume I wouldn’t be able to make it work
E: definitely and actually knowing more about Malta and definitely
S: and knowing more about Malta definitely yeah extremely naivety led to and like we did do research before getting into it and even if it failed we haven’t spent that much money that’s the other thing it’s not like we’ve bought a dealership out there invested in a hundred cars and then tried to sell them we started one at a time
E: what do you think you learn from doing this business
S: that’s a good question
E: and what do you think you took to other businesses later on
S: I think I learned that gambling is a lot easier than real life business
E: easier in a way that you don’t have it’s less hassle and it guarantees you more money
S: I think just at that point in time we were making a lot of money doing something that wasn’t particularly taxing no I think what I learned was kind of what you were talking about with naivety just going for it like I wasn’t burned by this business at all yeah which is which is good because if I’d started by doing the coffee shop I probably would have never started another business again because it was so much work so difficult to make money and so committed by having raised a ton of money for it and all the stress that’s around that whereas this business was low investment it was even if it failed completely we would have lost on that first car we would have lost under 10,000 pounds for everything involved which as businesses go isn’t that bad and I would’ve gotten a car out of it and another thing I learned was that the people who facilitate these businesses the people who transfer the car it’s in their interest to help you and even though you’re 21 years old and you’re asking really stupid questions they still want your business that’s then been true for everything else we’ve done the same with a coffee shop speaking to the people who provide the coffee the roasters or the people who make the coffee machines etc they really wanna help you and they’ll give you all the advice you need and help you with every step
E: yeah that’s really good awesome
S: well there you go another silly business and that’s it thanks for listening and good-bye
“I’d much rather hire a machine to do it than a person… There’s definitely a level you get to where it’s worth having people who know what they’re doing working on this but most of us will never get there and most of us don’t want to get there. We’re doing this for the lifestyle behind it.”
– Sam, on why he prefers to use a hybrid of software and an accountant rather than just contracting everything out to an accountant
Easy and straightforward bookkeeping for your Amazon FBA business.
A very important topic and something that is simpler than you might think. In this episode, Sam explains how you can leverage software and an affordable local accountant to run your Amazon FBA business.
Listen to this episode of The Lazy Entrepreneur Podcast on:
Hello and welcome back to another episode at the lazy entrepreneur. I’m your host Sam and we’re joined by Emma as always. Emma, as you can tell I’m very excited for today’s topic. This must mean it’s something really dry……
It’s your favorite topic! It is accounting! And more specifically, accounting for Amazon FBA.
It’s something which yeah it sounds dry but it is really important. It’s really difficult to find a good accountant to
do your Amazon business and that is because Amazon FBA businesses are very simple in one respect but they’re also very complicated.
One-man bands where pretty much all transactions happen on Amazon. There’s not much else going on really. There’s not huge payroll difficulties or that kind of stuff. But also really complicated because they’re gonna be multi country and quite large profit. if you’re an America you talk about the different states all with slightly different rules. You have to deal with all different accounting requirements. And that means if you go to your local accountant and you explain what your business is to them they’ll probably price you up as if you’re one of these huge businesses that covers multiple countries and charge you accordingly.
On the other hand if they think of you as a really small business they won’t have any idea how to deal with all these different places and all the different kind of requirements. And that’s why we’re doing this podcast. I get asked quite a lot: “can you recommend a good accountant for Amazon FBA”. The answer is I can’t really.
You have a few options. You can either do it all yourself which is what we do with Pipehouse Gin. Which what I do with another business that’s also on Amazon.
You can hire a big firm and pay a lot of money which is something I don’t do but I do have friends who are kind of that level above who do. They’re doing kind of eight figures profit and they’re spending 200,000 pounds a
year on accountancy. Yeah and it’s worth it to them.
It’s worth having an accountant who knows exactly what’s going on in Germany and has a team out there if you’re doing the kind of turnover in Germany. But I’m doing just a little bit. Germany is kind of like a little side thing that I’m only really selling at now because it’s easy to do. It doesn’t make sense for me to have a have a whole team there and to pay this the same again in every country every region.
The final option is to kind of translate your Amazon business bookkeeping into something that a normal
local accountant will understand and then get them to do the accounting.
That sounds quite good.
That is the middle ground and that’s I think what is is the best option for most people and that’s what I do in my my biggest business. I think it’s like 1,200 pounds a year on accounting.
That’s the middle ground because there’s a lot of problems that can come if you do your own accounting. I do have guides on the blog for doing your own accounting which I will link to. But once you get a little bit bigger there are more problems and you want to make the most of all the tax allowances that there are and a local account will be able to tell exactly how much you can get away with.
So that’s what I’m gonna be talking about. How you translate your Amazon business into something a typical accountant can take and then generate your profit and loss sheets your balance sheets. All that kind of stuff yeah.
That’s one thing I was gonna say because with Amazon. Everything’s recorded it’s so easy to download a report and know exactly how many sales you’re having and how much each element of your supply chain costs and it’s all recorded. Unlike a more traditional retail store. That’s what I mean, it’s a simpler business because
these accountants are used to receiving like a shoebox full of receipts. And then having to enter it all in
We don’t have any that nonsense with an Amazon FBA business.
All right, so let’s talk about what exactly is accounting what is the aim what we’re trying to do. It’s simply to reconcile all the money that’s coming in and out of the business. We basically want to record every transaction that takes place.
So for an Amazon business that really only happens in two places. One of them is on Amazon itself. So on Amazon they will take their monthly fee out of your your balance that’s on there. When there’s a customer
return they’ll deduct that from the balance. All the FBA fees all the closing fees come out of that balance. To add to the balance goes in all your sales. Every two weeks they’ll reconcile it out and come up with a number which they’ll send to your bank account.
That happens separately for every country you sell in with Amazon. So every two weeks in my bank account
I will receive a transaction from Amazon UK, Germany, Italy, Canada, Spain, America, etc.
Then you have to work out all the transactions that happen at your bank account or on your PayPal or whatever other kind of financial instruments you’re using. So those will be the transactions you’re getting from Amazon but
they could also be other expenses such as paying a supplier or paying your freight forwarder. Paying your car fee or whatever else you can get away with.
Once that is all reconciled on your bookkeeping software we’ll know exactly what every transaction is that’s happened on your bank account. So is you can just give that information to a normal accountant and he’ll produce all the stuff needed for government submissions or for your VAT return.
It’s quite straightforward. Most accountants will recommend you have a bookkeeping software anyway regardless of what your business is. Whether it’s a coffee shop or an Amazon business. Or you’re a plumber or whatever. They recommend using something like zero or QuickBooks. So I’m not going to talk too much about them in too much detail because they’re quite general and
they’re not particularly Amazon focused.
They’re very simply a case of having all the information coming in which will be feed from your bank it will be feed from Amazon and then reconciling each one off yeah.
The other thing you do need though is some way to get the information from Amazon into that software. Currently, Amazon doesn’t just plugin. Amazon does have all the transactions, all the statements you need but they don’t do it in the format that we want which is really annoying.
What we want is for each of those payments that gets made from Amazon to your bank account and those ones that happen every two week. We want to know the exact breakdown of what goes into that. Amazon doesn’t provide that. You have to use a third party software which will plug into Amazon and translate all those records and then import them into Xero yeah.
The software that does that is called A2X. I think stands for Amazon to Xero. But it works with any kind of software. I’ll put a link to them in in the show notes. Along with Xero there is also Quickbooks.
A2X kind of plugs in and so when it comes to doing your reconciling you will simply go on to A2X. It’ll have a list of all the bank transfers that have happened from your Amazon accounts into your into your bank account. You’ll go through each one and then basically label what each transaction is.
It will give you a breakdown of what’s going on. So, for instance, it will have your advertising spend. These bookkeeping software a very versatile so for instance the way I do it is I have it broken down by each country and so I’ll go onto A2X and I’ll select which country it is due for. But you don’t need to do that at all. You can just have this is an income this is an expense.
For instance we are VAT registered which means that every three months I need to produce a report that says how much of VAT we owe. So every three months my process is: I go to A2X, I check each transaction, each statement has come across correct. I press yes yes yes yes. They then appear in Xero where I match them up to the bank transfers that come in from my Santander account. Then I’ll click file VAT and It’ll produce a VAT report and it will say I owe this amount. It takes about maybe an hour an hour every three months.
It’s quite simple. Then at the end of the year my accountant will log on he’ll probably have a few questions for me. He will ask me how much stock we have left and how much that stock is worth. And then he’ll file all the
reports. That normally takes a few emails and it’s quite straight forward job.
What happens if you forget to do your three months VOT?
You get fined. The first time you miss it you are allowed to get away with it. I don’t really want to labour the VAT
point because most UK businesses won’t need to be VAT registered. My general habit with this kind of stuff is
you can do it backwards. Don’t let this put you off starting your Amazon business.
Yeah because you don’t need to think about accounting until you’ve got something to account for. Yes so
these are headaches but they’re only headaches if you’re doing well. You can look back if you’ve done a year and you’ve only made like a thousand pounds you probably need to do anything because it will be below threshold of what you need to report to the government.
It’s good to look at those thresholds. On the other hand you do really well and in your first month you turn over fifty thousand pounds it’s time if you start thinking about accounting. Yes so currently in the UK threshold for VAT is about £80,000. Which means if you turn over less than £80,000 in a 12 month period you don’t need to bother.
There are consequences for messing up. But also HMRC are very understanding. I remember with my coffee shop we shot past the VAT threshold by about double before we realized we had to register.
I was bricking it because what if we received a huge back-dated bill. They said no it’s okay, we’ll just start
taking VAT from now.
HMRC are small business friendly and they want you to succeed. When I’ve spoken to HMRC and all these
people they’re quite friendly they’re not as scary as they make out.
If you do do your own accounting you can do it all online. It’s quite easy where you can just look at your Xero
reports and then go on and just input the numbers. You can do it and that’s why we do it for our smaller businesses where it’s not worth paying an accountant.
That’s kind of one of the advantages of using something like A2X. Because they will have all the guides on their website. They’re a company whose sole purpose is to make your accounting for Amazon businesses easier.
I was on A2X today just doing a bit of research for this episode and they’ve got a page of a full of partners they
recommend. Accounting companies who focus on Amazon FBA businesses. The problem is most are American focused and generally I think they’ll probably be a little bit expensive. I think they’re probably worthwhile especially if you’re expanding to the US and you’ve got to deal with sales tax and a lot of other nightmare stuff there.
While the UK is very friendly for new businesses the US is a bit more complicated because every state has a slightly different rule set and there’s a lot of like grey
But don’t let it hold you back because I do know a lot of people get so intimidated by this side of it. The bookkeeping, the accounting, the legal side. So intimidated that they just won’t ever start.
The software is easy enough to use that anyone can work it out. I don’t have an accounting background and I do some of my accounts completely myself but a lot of people the best is that it’s better to pay someone. But it’s better to find someone affordable who can advise you and then leverage software to the max to do most of the hard work for you.
That’s another thing. You could employ an expensive accountant and then they actually have no idea anything to do with Amazon. They’ll charge you £200 pounds an hour to sit their looking through their reports, copy and pasting things. Filling out their spreadsheet.
Or you can pay $50 a month for a software.
Another option people do is they’ll hire a virtual assistant and find someone in somewhere like the Philippines. They’ll pay them 250 pounds a month to work kind of halftime doing all their accounts. There’s probably a level where having someone in-house to do your bookkeeping is worthwhile. But definitely for me the hassle of training up someone with no skills from the Philippines to e good enough to do all this accounting is a waste of time. Plus there’s also going to be lots of human error,
We’re doing this for the lifestyle behind it not for the hassle not for the hassle. And you could easily run as a
six-figure profit business this way.
It’s only once you hit seven or eight figures profit where you’re doing large amounts in in certain countries that have a lot of legislation.
You could be VAT registered in every country in Europe but pretty much all of them have a distance selling threshold. We’re business here in the UK we’re selling in Germany. When someone buys something from us here it will get shipped from an Amazon warehouse in the UK and they’ll still get next day delivery because we’re not that far away.
From the German government’s point of view the sale is coming from the UK. They say that you don’t need to be VAT registered unless you hit that Distance Selling threshold.
I think for it’s about a hundred thousand euros. So yeah that’s quite a lot of money.
Now I am VAT registered in Germany and again this is all very simple to do because Amazon has some VAT services themselves. And A2X will still do all the transactions over and Xero will still do all my bookkeeping.
Alright we’ve gone around in a few circles here so let me bring it back just talk about what is accounting
how we do Amazon FBA accounting.
Accounting is simply reconciling all the money that comes in and out of your business. Every expense that happens and every sale that happens. It is then tying them up so on all your accounts that have balances such as Amazon or your bank account, all get balanced.
Xero or Quickbooks generate all the information we need profit and loss or balance sheets. That type of stuff.
So how does that relate to Amazon FBA bookkeeping? It means we need to link up our Amazon accounts to our bookkeeping software. Using something like A2X.
My advice is for most people you is to hire an accountant. Just as a local one who knows how to use
Xero or QuickBooks. They can tell you when you’ll need to register for VAT or when Distance
Selling becomes an issue. Because that stuff they will know.
Can you believe it, we’ve spoken for 25 minutes on accounting? Thanks for listening and I’m sorry it’s a bit more of a dry topic today but hopefully you found it useful. And if you do have an Amazon business or you’re thinking about doing it then don’t be too intimidated. In the show notes I’m going to put links to all the stuff I’ve talked about. A2X, QuickBooks and also some more in-depth articles I’ve written on these subjects. Both on how to do accounting yourself regardless of the type of businesses and how to do accounting for your Amazon FBA
Thank you very much.
Luke goes into depth on how he built a £500k turnover company selling tea towels.
I found talking to Luke very interesting as his business is very different to any of mine. He had to build the demand for his product and find creative ways to get it in front of his audience. Well worth a listen.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast: