Making money and keeping money are two different skills
You may have read recently that Jamie Oliver’s restaurant empire has gone into administration. The talented TV chef had rapidly built up a chain of around 50 restaurants over the last few years. Like his new restaurant branches, Jamie seemed to be popping up everywhere on television, in the newspapers and on the Sunday Times Rich list.
We don’t know exactly why his restaurant business went wrong. Some say that his prices were a little too high for basic Italian food, but I think it also has a lot to do with the expensive city centre locations and over expansion.
Jamie apparently put in £30 million of his own money when the company was on the rocks over a year ago. Evidently, he could not let it go and tried to rescue a sinking ship.
What this proves is that it is far easier to make money, or start a successful business venture, than it is to keep it.
When you’re on a roll like Jamie was you have a tendency to want to jump into the next venture and the one after that.
It’s easy to believe your own publicity and think you’re invincible. Instead of concentrating on what you have and consolidating your business, you want to conquer the world.
Would all like to emulate Richard Branson, the serial entrepreneur who has made billions from several different businesses, but we forget that he spent years building his virgin Empire before branching out into other ventures. In fact, he didn’t start the virgin airline business until after he had sold the virgin record business to EMI for several hundred million pounds.
Branson also works with partners and people who have expertise. He doesn’t bear all of the risk or trying to do all of the work himself.
Just because you’re a good chef, it doesn’t mean you can become a good restauranteur, as other celebrity and many lesser known but talented chefs have found to their cost.
Restaurants, like most physical businesses, are enormously expensive to set up and the difference between success and failure can be subtle and fickle.
A good friend of mine had a successful Turkish restaurant in a nearby town. Due to his first venture going so well, he decided that he would start up another restaurant in the same area. This one was to be a little bit more “classy”.
He spent over £200,000 converting the building into his fancy new, restaurant. It was really plush inside; the food was great and it was his pride and joy. Unfortunately, the paying public for some reason did not agree and the restaurant failed.
New owners took over and remodelled the restaurant based on their proven formula. The Turkish food was almost exactly the same, but they opened out the layout and put long tables in instead of smaller tables with white tablecloths. The new restaurant immediately took off and to this date is still nearly always full.
I have since seen a number of restaurants come and go in the same High Street. I know that each time a restaurant or shop closes down it has cost the owners hundreds of thousands of pounds, which is all gone down the drain.
My tip to anyone starting a new business from scratch is not to start a physical business or open up a shop. From day one you would’ve spent tens of thousands of pounds and have to make thousands of pounds every week just to cover your rent, rates, taxes and staff.
In my book, Yes, Money Can Buy You Happiness, there is a section on the celebrities who lost it all. There are countless stories of sports and media celebrities with quickly made and lost fortunes through mismanagement of their money and for advice. I’ve personally assisted form of popstars, I used to see performing on Top of the Pops, who could not obtain a mortgage due to a poor credit history and being behind with their current mortgage. Sam had lost their marriages and families. It was sad to meet once wealthy and famous people end up broke.
Then they were the megastars like Michael Jackson who had sold 700 million records and had repeatedly signed $1 billion contract yet was in debt when he died. Stars like Marvin Gaye, rapper 50 Cent, Toni Braxton, MC Hammer have all been declared bankrupt despite earning millions in their careers. MC Hammer received $33 million from one album alone, but blew the lot spending lavishly on cars and a $12 million home.
There are others in my book, some of whom will surprise you, like the fact that even Presidents of the United States have either been bankrupt or had money problems.
I also cover the common themes running through the lives of those who have made and lost millions. These include:
- Poor investments
- Bad management
- Not taking care of the taxes
Another theme is that most of them came from poor backgrounds and perhaps could not cope with large amounts of money or had a low money consciousness.
This is the type of money consciousness which I cover it in the book is about how you feel about money and how comfortable you are around money. If you think that all rich people are evil and bad this will have a negative effect on you when you obtain a lot of money.
I’ve seen this over and over again when people have money but seem to want to push it away and go back to being broke when they feel more comfortable. Take a look at some of the lottery winners who have spent their way through tens of millions of pounds on houses, cars boats, lavish holidays and investing in any stupid venture that then asked to sink their cash into.
I go through my advice on watching your back and protecting your assets in the book. I also talk about the difference between the way rich people and poor people manage their money.
Check out Yes, Money Can Buy You Happiness on Amazon.