There Is a Market for Bad Coffee, Burned Toast, and Cheap Tinned Baked Beans.

Just make sure you burn the toast every time.

This is from a lesson my father taught me as a young budding entrepreneur. I used to sell my own homemade peanut butter cookies at school. I was 11. On realizing I wasn’t making the right margin, I took it upon myself to reduce the amount of peanut butter and switched from butter to margarine.

If I couldn’t make enough money, I wasn’t going to continue baking the cookies. That in itself is a good lesson to remember. Vanity projects do not pay the bills.

I had one or two complaints regarding quality when I arrived with the first revised batch. So I went to my dad after school and asked his advice. His reply was a life lesson that I have kept throughout my business life:-

Bad coffee and burned toast have a market. But if that is your market, never make good coffee or perfect toast. Because the moment you do, the customer will expect that as the standard.

I changed nothing. And carried on selling all my production. I learned the value of a captive market too.

It’s akin to understanding price points. The cheaper your product, the bigger your market, but equally the greater your competition. There are millions of street cafes throughout the world. But only a handful of 3 -Michelin star restaurants.

I used to go after the bulk market. My ego loved volume. However, my bank balance, not so much. Having been in business for my own account since I was 11, some 40-odd years ago, I changed my tune in my late 30s.

I started to sell fresh Australian Rock Lobster, in my UK restaurant, plainly grilled with garlic lemon butter, and chips, for £60.00 a lobster.

As a price comparison. At around the same time, I ate lunch at Gordon Ramsey’s restaurant on Hospital Road — it was a 2-star then, and he was cooking. Lunch cost around 50 quid.

60 quid for one lobster was an obscene price.

At first, I was embarrassed. Literally. I was importing live lobsters and selling them for a massive profit. But my restaurant was in a well-heeled part of the UK, and each lobster had a metal tag attached to its shell. We clipped off the tag and put it on the plate of food. Every purchaser got a metal tag with a number stating how and where that lobster was caught.

That simple, stupid USP created the demand. Customers started collecting tags. They became a status symbol. Carrying them with their car keys as a memento. A talking point.

And the conversation ended with this statement — “The best lobster I have ever eaten …”

No it wasn’t.

It was very good lobster, but when you pay 60 quid for a meal, and you get a tag telling you it’s special, your brain informs your taste buds that you ARE going to enjoy this meal.

I had customers phoning to make a booking and telling my manager that they had heard about the rock lobster and wanted 3 or 4 or however many they wanted for that booking. We literally could not import enough. Which in turn created demand.

As a result of that one product, I began changing how I marketed myself to customers. I studied the markets and watched how brands behaved in downturns. I invested early in the LVMH Group. And today I note that the Chairman of LVMH is the wealthiest person in the world.

It is no coincidence that his ascension to the heady title of ‘world’s richest man’ is linked to the timing of the “Cost of Living Crisis”.

While the burned toast and lousy coffee brands struggle … the top brands get stronger. Wealthy people spend in both recession and BULL markets. They ALWAYS have money. LVMH doesn’t need to sell a billion handbags to make an obscene profit. They only need to sell a few.

Some may say I am talking against my own title.

I am not. What I am saying is that you should look at your own skill set, not what others are doing, and define your market based on YOUR skill set. If all you are capable of is cheap tinned baked beans and burned toast, that is OK … it can still be a business at the right price point.

Open that operation 24/7 in the right location, with music, and watch late-night revelers pour into your establishment for a cheap coffee and something to soak up the alcohol. You will make money.

Or what’s in your backyard?

People always look afar for products. Look locally first. Often the product is staring you in the face … but you see it every day. You glaze over it. So open your eyes and look properly.

My mate bought into Nando’s Chicken. He wasn’t Portuguese. The guy who sold him the brand and recipe was Portuguese. He didn’t think the product was so special. It was JUST Portuguese chicken.

As a Portuguese, he didn’t see the USP. It had been under his nose his whole life. Not in his wildest dreams did he think it could become a global brand. But my mate did. He knew.

He opened his eyes.

During my military training, we were taught to scan the bush from right to left. It changes perception. You see things you do not see when you look left to right. Because your eyes are USED to seeing from left to right.

It is how 90% of the world reads. It is what your eyes are used to.

Change your process and you will change what you actually see. It took an outsider to notice Red Bull … the product was under millions of people’s noses. And had always been there. Therefore they did not see it as special.

What product is special and under your nose?

I recently listened to a podcast by some young entrepreneurs who were going to buy dog collars from China and sell them locally. They live in Scotland.

I couldn’t help thinking, why not make or have something made that’s local to you? Instead, you are joining a few million people selling cheap Chinese products.

If they had been clients of my consultancy business, I would have asked them a few questions:-

What is Scotland known for?

What are YOUR skill sets?

What makes you unique?

But if they remain hell-bent on dog collars, this would be my advice:-

Scotland is known for its product quality. It also has one of the iconic beef brands, Aberdeen Angus Beef. A good dog collar is made from leather.

I’d be selling a dog collar HANDCRAFTED in Scotland from 100% pure Aberdeen Angus leather with brass buckles and studs. I would have my logo stamped into the leather. It would be a THISTLE and something more. Or our family crest or coat of arms. All scots have one. Or I’d incorporate a HIGHLAND TERRIER.

A dog known for its characteristic no-nonsense strength and spunk. It’s a perfect brand ambassador for a serious dog brand company. And as part of the packaging, I would include a tartan box with 6 dog biscuits sized for the dog collar in question. As a gift.

The cost of my dog collar would be obscene. I am not in the volume market. But I know my product will be spoken about at all the right places and word of mouth will ensure I get repeat and new business. A customer who buys one for themselves will definitely buy one for a friend. They want to show off. And the best way to do that is to be part of a collective clique.

Nobody wants to own the only Louis Vuitton bag in the world. That has no value.

I would have 3 sizes of biscuits made using organic pure Scottish ingredients and I would fashion those biscuits around Scottish shortbread treats. They would be healthy.

And I would sit back and wait for the biscuits to be ordered separately … because that is going to happen. And when it does it is not a push product, it is a pull product, and pull products command a superb premium.

Final Questions:-

Who are your competitors now? Maybe a handful around the world.

I prefer those odds.

How difficult is it to follow you to market?

They’d have to be Scottish. Your competition has suddenly gone from 8 billion to 4.5 million possible competitors. Take out old and young and non-entrepreneurial and we are down to a few hundred thousand.

I like those odds too.