Nobody wants to fail, but it happens to everyone – even Richard Branson himself – and, to put a positive spin on things, failure teaches you like nothing else. In our series ‘Learning from Mistakes’ we explore what these experiences taught entrepreneurs.
Ricky Spiers is the founder of The Salad House, which was a healthy takeaway restaurant based in Tunbridge Wells, Kent. Here Ricky reflects on what making the difficult decision to close his restaurant taught him.
My business failed pretty much within one year of starting. Becoming part of a well-known start up statistic kind of hurts - you obviously don’t expect it to happen otherwise you wouldn’t start in the first place. However, when you put a positive spin on it, you can only really see the value the experience bought.
So here are three things my failure taught me…
Start small and test the market
I jumped straight in at the deep end with The Salad House and signed a lease for a fairly large property. So from day one, my overheads when it cam to rent and rates were high. I realised pretty quickly that the footfall wasn’t as good as I had made myself believe and this, combined with a niche product, got me off to a slow start. I had overestimated the size of the healthy takeaway market in the Tunbridge Wells area. I also underestimated the amount of time it takes to get established and build trust with enough customers. Were I to try again I would probably go for a mobile street food set up which would have smaller overheads and allow me to learn and grow with the breathing space a new business needs. So before I could identify the biggest problems and adapt, pivot or improve my business I had run out of money. Which leads me into the next valuable lesson…
Have all your financial ducks in a row
After a slow start I realised pretty quickly I did not have enough money. I had not left myself enough working capital after start up costs – even when sales are slow, the rent is still due! There was not enough money to allow for much of a burn rate, which is something I did not see coming. Whilst word of mouth is great it just takes time, of which my funds just could not sustain.
Also, and perhaps more importantly, my personal finances were not going to survive the amount of time it were to take to be able to draw a wage. I had a personal survival budget of about seven months and in hindsight I should have had at least a years' worth budgeted for. Having my company running out of money, as well as personal money running out and with a personal guarantee on the lease, I experienced some of the most intense stress I had ever felt.
Having opened a healthy food restaurant my personal health was already one of my highest priorities, and I knew that if I let it the stress would begin to affect my physical health. I made a decision that no matter what, I would not let this happen. Two things helped – a firm belief that stress will only manifest itself negatively in the body if you believe it can, and the second was meditation. I used an app called Headspace and it really did help me to handle some extremely stressful times. Being able to take action and think clearly under stress is so important, and it did catch me out for a while.
Not everybody shares your passion
Not everybody eats like I do. I still believe to this day there is no better balanced lunch than a salad - but the word salad conjures up images of boring food for a lot of people. To me a salad is a never-ending possibility of different combinations of great food; it is completely tailorable to your taste and specific needs. You can have it with or with out carbs, as much or as little greens as you like, high in protein, high in fat, low in fat, with no dressing or with loads of dressing – I could go on…
When you are really passionate about something your life tends to be immersed by it, and this made me blind to the fact that there are so many people that have no interest in the things I have interest in. In a bigger marketplace my business may have worked, but when you are providing a niche product in a relatively small marketplace you can expect not to sell too much.
So after running out of money and being at my limit for borrowing,I decided to call it a day. I could write a book on the mistakes I made and lessons I learned, and deciding which to write about has been quite difficult. But it doesn’t really matter which ones I chose because most of it was learned from doing it for real and not reading about it. So for those of you who haven’t started yet, do it - go and make your own mistakes, because the lessons can’t truly be learnt any other way!
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