A “serial entrepreneur” is just someone with a lot of money
The thing I’m often asked since walking away from Lashbrook Lassis is, “so are you going to set up another business?”
This question is based on the assumption that starting a business is an inexpensive pursuit.
This is something that often frustrates me. Starting a business costs a lot of money. If you want a half decent chance of turning into a medium sized business, you’re going to need about £100,000. This is before you even make a sale. I always thought that once we had managed to win our first big order, that it would make up for the shortfall in the upfront capital we had. However, the fact is most businesses often lose money on their first big order, especially in manufacturing. Seth Goldman, who is the creator of an American ice tea company, Honest Tea, openly stated that his first contract with Wholefoods made them a loss; however they were just happy to be on the shelves. I’m not entirely sure why, but we genuinely thought that when we won our first contract, the opposite would be true.
So when it costs money to set up a manufacturing business and it even costs money to fulfil a big contract, how is it possible that someone could just start up another company if their first business fails. A “serial entrepreneur” may be creative, but ultimately their defining characteristic is that they are already wealthy. Even if such an entrepreneur relies heavily on bank loans to fund their businesses, you need significant assets to offer as collateral. The best Jo and I got when we set up our account with HSBC and provided them with our professionally-bound, 30 page business plan was a small overdraft facility.
The ability to come up with original ideas is relatively easy and cheap. However, to become a serial entrepreneur and implement these ideas is much more expensive.