The story so far: the author has sold his house to finance a manufacturing project in the hope of making a small fortune to finance his old age...
Entrepreneurial maths 101. You need a firm grasp of the figures, the BBC's bullish entrepreneurs of the Dragons' Den tell us. You've got to have a fanatical grip on every component, every fact, every cost, every variable if the project is to work. I don't care for generalisations myself but this advice is, generally, rubbish. I mean, what if you're not like that? What if it doesn't suit you?
Here are some fanatical questions. How much is this product going to cost to make? How much storage space do you need for 2,500 units? What will be the marketing costs of reaching two million ABs five times?
The answer is the same in all cases: I really couldn't say, exactly. I'd guess that when the goods arrive, if they ever arrive, they'll be about the size of quite a large car. How much do they cost? Landed here? Lord, I'm not sure. Under a tenner? That would be a good effort. The cost of reaching two million posh people? I'm hoping 8p will do it. I thought I'd make a few calls and see what turned up; ring the Shopping Goddess at Tatler and see what she says; send her a sample and ask her to stick it in the mag.
And what will the profit be? Ah, now we're on firmer ground. By the end of Year Three the enterprise will have grossed £2.8m with a profit extraction at 62 per cent. The unit manufacturing cost will be £4.26, and we'll be approaching American preachers in the South-western states for the religious maniac market (it's a versatile product, and goodness knows there's no shortage of religious maniacs in America). No, no, the future is as solid as a rock.
But how can I be so sure that it will cost so much less, and be at that precise figure? Stop asking these maddening questions. I'll hire someone and tell them that's what it has to be made for.
You can see why I ducked out of the Dragons' Den auditions. You couldn't get through their interrogation with this sort of attitude. The producers would only let you on screen to be torn to pieces.
I interviewed a man for a political project we were running; he had a lot of money because he had bought a railway system in one of the world's smaller countries. Still, it was a whole railway and there were billions involved. And because he'd got the figures right, he sold it well. On the wall of the downstairs lav there was a paper napkin framed with half a dozen numbers and a bit of algebra. "What's that?" I asked. "That's the business plan we drew up to buy the railway," he said.
Yes, I know: don't try this at home. But enterprise operates in many different ways. The standard formula may work for standard enterprises - if there is such a thing as a standard enterprise - but this is one of the loosest projects I've ever done and easily the most likely to succeed. Easily!Reuse content