It was with some trepidation that Martin Webb and Simon Kirby bought a run-down bar in Brighton in 1993. Only a year before, despite pulling in £20,000 a week, they'd had to hand in the keys to their first business venture, a pub called Helsinki. What went wrong? The £20,000 "probably went to our heads a little bit and we made the classic entrepreneurial mistake that people sometimes do when they first start, of confusing turnover with profit", says Webb. "We thought just because we had loads of money in the bank we were making loads of money. And we didn't make much allowance for insurance, corporation tax or paying the rates. We were a bit sort of taken in by the whole lifestyle, went out and spent the money on cars, mobile phones, sharp clothes, all that sort of stuff."
After that first hiccup, the two decided there was little point in rushing headfirst into another venture until they'd taken some time to think about their experience and, of course, get some money together again. Then they saw the pub in Brighton. "We actually had a game plan. That was to plough as much money as we could back into the business, to live on next to nothing, to live in rooms above our pubs where possible and expand as quickly as we could with a view to selling the company." With not enough money to hire builders, they stripped it themselves, then plastered and painted the place over a six-week period. "We were absolutely exhausted by the end of it, but we came out with this bar that cost us about £10,000 and was suddenly taking £10,000 every week."
Six months later, they opened their second bar, and began expanding at the rate of one every six months or so. It was a risky growth plan, but "when you're young and starting out, you want to do things as quickly as possible", Webb says. "You want to achieve a lot in a short period of time. And if you've got nothing,you haven't got a lot to lose. I think you've got to take the risks." However, "I wouldn't really recommend that as a business practice".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
By 2001, the C-Side chain had 28 pubs in Brighton and Hove. It was turning over £23m a year and making £2.3m. "We were quite lucky in that we started our business, and the expansion, during the 1990s, a period of time when there was a mild recession. It wasn't difficult to get leases." Still, when a £15m offer came in for the chain, they took it. Webb and Kirby walked off with £7.5m each. "I took two years off, bought a boat, sailed across the Atlantic, went travelling, did the Inca trail, learned to speak French and bought a place down in France." Then Webb got back down to business. He established the Robin Hood pub, which donates all profit to charity, in Brighton, and set about starting another chain in London.
Then he got the opportunity to front a new Channel 4 programme, Risking It All, where he took budding entrepreneurs through the process of starting a business. "That's been really good fun. It was a completely different tangent for me. I'm a strong believer that you shouldn't spend your whole life just doing one thing."
