Martin Webb: Risking It All
The People's Pubs founder on the value of failure, social enterprise and making millions
There’s more to Martin Webb than his TV persona of business mentor. When not guiding wayward start-ups back on track in Channel 4’s Risking It All, he runs his own businesses. But that’s not all. These days, he effortlessly traverses the roles of entrepreneur, adviser, father, presenter, columnist, author and, recently, patron of social enterprise.
His lesser-known persona is that of fully-fledged philanthropist. After selling his £24m turnover business C-Side for £14m in 2001, Webb says he saw the light. Not content with helping budding entrepreneurs on screen, he now extends the courtesy to the inhabitants of his home town, Brighton.
In 2004, he set up People’s Pubs, announcing that the company’s first venue would give all its annual profits to good causes in Brighton and Hove. Appropriately, it is called The Robin Hood. Three years later, around 40 groups – from schools to HIV charities to women’s groups – have benefited from the £75,000 generated. The common thread to the diverse range of recipients is that each is people-related, fulfilling Webb’s aim of reaching out to every segment of the local community.
“It’s a very personal thing, but I feel just from a moral point of view that I’ve done well out of being in business and there’s something slightly soul-destroying about making money purely for the sake of making money to buy boats and cars,” he says. Although he admits going through a “phase” of liking those things, he insists that these days he’s more of a “simple living” kind of guy.
From C-side to A-list
Being an entrepreneur is what Webb does best. With his former business partner, Simon Kirby, he grew C-Side from one pub to 27 venues – bars, clubs and restaurants – in just eight years. He has similar ambitions for his numerous current ventures, which include bar chain the Medicine Group, People’s Pubs, another pub company in London, another in Brighton and a 500-acre holiday retreat in France. Unsurprisingly, he expresses a love of trying new things and if a free minute does happen to crop up in his day, he’s not one to waste it. A keen sailor and traveller, Webb has also recently completed a three-week course to learn French. “In my eight-day week there’s a lot of multi-tasking going on,” he says.
And, of course, he’s also been busy sharing the secrets of his business success, both on screen and off. An eagerness to help his fellow entrepreneurs recently inspired him to write his second book, Make Your First Million: Ditch the 9-5 and Start the Business of Your Dreams.
However, when wearing his business mentor hat, his advice is not just for start-ups. The book contains a lot of advice for those with ambitious growth plans in mind. “A lot of people start up businesses that just aren’t expandable,” he says. “If you want to make a million pounds, for example, you need to start something that can be rolled out. It can’t be a business which is reliant on you doing everything, you need to be in a position where you can expand it and employ other people and get new premises.”
He adds that his experience on Risking It All has also fl agged up the fact that many entrepreneurs are starting up businesses which they have no experience of. “People have a dream – they want to run a restaurant, bar or shop. But most of them have never done it before and they think they can learn while they’re setting their business up, which is financial nonsense really. Go and work in McDonald’s, Costa, Starbucks, Marks & Spencer, whatever, but get experience from someone who’s successful in the area you want to go into and observe their systems and ways of doing things.”
Experience of new products and markets is central to established businesses too, he adds, particularly those which aim to diversify. He insists his own experience working for a range of businesses made him more prepared to go it alone than a stint at Brighton University Business School. “I don’t think it’s necessary to go to business school. I enjoyed my time, but I kind of wish I’d done something more academically stimulating. The best experience is hands-on education.”
Down, but not out
However, Webb has also tasted failure and neither experience nor a business degree was enough to arm him suffi ciently to prevent his and Kirby’s fi rst business going bust in the early 90s. The prologue of his latest book relates in frank, painful detail the story of the ill-fated Helsinki, one of Brighton’s first DJ bars, and Webb often uses the experience as a point of reference to prevent other entrepreneurs from making the same mistakes he did.
So what went wrong? Webb says the concept was sound. Helsinki opened in 1989 long before the era of mass-produced style bars. Webb and Kirby created the type of venue they wanted to go to, offering a change to the “grotty” pubs which dominated the town. “It was rammed straight away,” he recalls. “But one thing led to another and we made the typical youthful indiscretion of mixing up turnover with profi t” – a mistake he has since seen many other business owners make.
After spending money that should have been set aside for matters such as VAT, things got out of hand. “It was a huge psychological shock having a business that failed and it knocks you on all sorts of levels: it knocks your confidence back, it knocks you back financially, it makes you believe that perhaps you can’t do it. But we had a strong enough belief in what we were doing to come back in a more mature way.”
Webb and Kirby resolved to start again, this time armed with some valuable lessons, and in 1993 the first venue of what was to become the C-Side group opened. They started C-Side on just £5,000 and a £20,000 brewery loan, but with the intention of running it as a business rather than “as a laugh”. Paying attention to margins this time, they knew exactly how much money they made with every shot of vodka and what outgoings had to be accounted for.
“The big lesson we had learned is only spend money that is proper profi t, as opposed to spending your turnover,” says Webb. Virtually all through C-Side, they drew out very little money from the business and there was a constant process of re-investment. The first time around they didn’t have a plan, whereas the second time they had a distinct objective, which was to get another and another and keep on ploughing the money back in.
Webb says: “I’ve never been particularly flash, so we never thought it was necessary to have huge salaries. We still had modest salaries even when we sold in 2001.”
The approach paid off. Because the pair could always afford to expand into the venue they wanted, they racked up 27 sites in a short time. Webb believes another signifi cant growth-driver was the angling of the business towards their own peer group, which they knew very well, and the decision to retain that focus. “When we had a bar, we then opened a restaurant aimed at the same people, then a nightclub that was aimed at the same people, so there was a lot of cross-pollination of ideas and we were trying to get the same group of people to spend their money in our businesses in different parts of their day-to-day activity.”
He admits though that diversifi cation was a challenge, in particular branching out into the restaurant business, which he concedes did not generate much profi t in relation to the time put in.
That said, key successes and clear growth strategies meant the business as a whole performed exceptionally well. In 1994 the pair struck gold with their third venue (and Webb’s personal favourite), the Fortune of War on Brighton seafront. “We paid £45,000 for it and in about the third or fourth week that we had it we took the same amount of money over the bar,” he recalls.
However, Webb and Kirby risked it all several times to expand C-Side at such rapid pace. Their biggest hurdle was an objection to their alcohol licence application for a seafront venue, the Beach Club, from neighbouring site the Zap Club. Undeterred when their application failed, they borrowed £500,000 and bought the rival venue. Needless to say, it was worth it.
The founders spent their last few years at the helm preparing to exit and gearing up the business for sale. In 2001 they relinquished C-Side for around £1.4m to a private eqquity firm. Unfortunately, the did not fare well under new management – in 2005 C-Side reported losses of more than £2m and in April this year the company merged with pub group Zelgrain.
Not that Webb harbours any regrets about the deal.”On a personal basis it is sad to see a company that you’ve built up suddenly collapse, but really it’s no skin off my nose because I’ve had my money and it’s none of my bbusiness.”
He believes the new owner’s big mistake was to allow himself and Kirbby to leave thebbusiness as soon as the deal was done. “When we put the company on the market we did think that we would bbe asked to stay that’s normally what happens.If you’ve got entrepreneurs running somewhere, you don’t want to lose all their management skills, you normally tie people in for a year or six months. But they didn’t.”
Following the sale of C-Side, Webb took a couple of years off and indulged his passion for travelling by walking the Inca Trail in Peru, sailing around Australia and completing a Yacht Master sailing course.
However, after two years of focusing on learning new skills, the entrepreneurial itch returned and in 2002 he got bback into the bar business, buying into the Medicine Bar, a popular music-orientated venue in Islington. Webb owns two thirds of the shares in the now the Medicine Group, and has since set up another venue in Shoreditch.
People’s Pubs followed in 2004 with the launch of The Robbin Hood as a charity project. Webb is now keen to help other entrepreneurs set up similar venues.He says: “It’s a bit of a cliché but I have done some charity things because did find having worked for all that time in the nightclubb and bar business it was slightly superficial and was keen to do something more substantial.”
And he has.He was recently appointed to the board of management at Brighton-based children’s charity The Rockinghorse Appeal and he is also involved with a safehouse for teenagers.
As if that wasn’t enough, Webb is also renovating a derelict hunting estate in France that he purchased two years ago.The site, named Le Puy, now has accommodation forholidaymakersandfor holidaymakers andand plans to launch country sports holidays are under way.
A key to Webb’s success is his ability to juggle many projects without letting one drop.So what is the secret to this aptitude for time management? Simple “Write lists and get up early in the morning,” he says, before conceding that his personality also plays a large part: “I’m very determined. I will just work and work and work until get something done.”
For now though, he hopes to spend the majority of his time getting back to business and focusing on being an entrepreneur. “I’m going into a new mode of entrepreneurial energy at the moment, setting up lots of new things and looking at lots of business ideas.” Expect big things.