Mark orders a Magners and buys Amy a vodka and orange. Amy talks about how, even when Lehman Brothers fell, she never thought they were vulnerable. She says that there are so many people
unemployed
now that competition for jobs is enormous. Mark tells her to stop being so depressing.
She asks Mark what he is going to do. He says that he’ll either get a job somewhere else through one of his contacts or go on holiday for a while. She finishes her drink and says she’s going. Mark asks her to stay longer, but she says she needs to update her CV. Mark downs the rest of his cider and follows her out of the door and across to the tube station. She tells Mark that she wants to be on her own, says she’ll call him and leaves him standing at the ticket barriers.
He wanders in shock along Bishopsgate and up Threadneedle Street, towards Bank. He then purchases a sandwich and a Mars bar from Boots and sits on a bench outside the Royal Exchange, by the statue of Wellington. When he finishes his lunch he remains there, eyes fixed on the Bank of England, for almost an hour.
A clock chimes to signal two o’clock and Mark strides off down Poultry. He goes into Austin Reed, buys himself a new shirt and tie on his MenDax American Express card and gets on the Northern line back to Clapham.
*
The International Bank of Scotland’s City branch is so vast and ornate that it takes Mark several minutes to locate the customer services desk. Once there, he tells Shelley – who is around forty and has a monotone voice - he wants to meet whoever is in charge of small business loans. She asks if he has an appointment. He says that he didn’t think he’d need one. She asks him to take a seat.
Mark sits and places his red ‘Business’ folder on the table next to him. Shelley knocks on a giant arched door at the other end of the bank and goes in.
Mark reads over his business plan once again and avoids looking at the stream of stern-faced suit-wearers who file past. A cashier is trying to explain to a confused old lady that this isn’t NatWest.
Shelley paces back over to Mark and tells him that someone can see him, but he’ll have to wait an hour. To her surprise, he says that’s fine.
Fred, a slim, confident Scot with short grey hair and a narrow, joyless face, shakes Mark’s hand and welcomes him into his office. The walls are covered with gilt-framed John Constable landscapes and behind the antique mahogany desk is a tartan-covered gold throne. A set of skis are
resting in the corner next to a full-size stuffed tiger. There is no
computer
.
Mark is invited to take a seat and offered a glass of mineral water. Fred settles down on his throne and apologises for keeping Mark so long.
‘That doesn’t matter,’ Mark says.
‘Shelley didn’t really explain why you wanted to see me, so perhaps you could tell me a little about yourself and how you think we can be of assistance.’
Mark has a drink and clears his throat. ‘Basically, I’m a young
entrepreneur
looking for a backer. My background is in high finance and I’ve got a degree in business and I want to borrow a small amount of money to help launch my next venture.’
‘OK,’ Fred says. ‘What is your business?’
‘I’m going to open a chain of luxury ice cream parlours around
London
and in all other major cities in Europe: Paris, Madrid, Barcelona, Berlin, Amsterdam, Los Angeles, Las Vegas.’
‘Right,’ says Fred, with a wry smile. ‘That’s certainly very ambitious.’
‘Obviously not all at once though. I want to launch in London and then build from there.’
‘What’s your interest in ice cream? Do you have any experience of the ice cream trade?’
‘I have conducted extensive market research and there’s a gaping hole in the market to be exploited. Everyone loves ice cream, but at the moment the only places you can buy ice creams from are corner shops or those vans run by pikeys. People don’t want to have to walk the streets eating their ice creams, and the USP of my business is that not only will we sell amazing ice cream - the real luxury stuff in thousands of flavours - we’ll give the customer somewhere luxurious to sit and enjoy it. Think of it as being like a luxury ice cream restaurant.’
‘I think I understand the concept,’ Fred says. ‘What market research have you done?’
‘I carried out a survey in some of the most popular areas of London and the results were almost unanimous. I went to places like Clapham Common, Battersea Park, Hyde Park and I asked people if they like ice cream and everyone said “yes”.’
‘But that’s not a basis for starting a business, that’s just a straw poll. What research have you done into the ice cream market?’
‘Lots. Do you know how many places there are exclusively selling upmarket ice cream in London?’
‘No.’
‘I’ll tell you - none.’
‘But why do you think that is? What proof have you got of the demand for an upmarket ice cream parlour?’
‘The sales of ice cream are going up and up every year in shops and supermarkets. The average person in Britain consumes one hundred litres of ice cream a year yet there is no shop or restaurant that caters exclusively for ice cream lovers.’
Fred purses his lips. ‘One hundred litres? That sounds like a lot.’
‘It is a lot. If I can attract just a fraction of that custom I’d have a massively profitable business. Also, two hundred million rich tourists visit London every year. I’d absolutely clean up in the summer. I aim to make my chain an iconic luxury brand. I’m not selling them ice cream; I’m selling them a lifestyle. It’s a lifestyle brand. If you buy one of my ice creams, it says something about you as a person.’
‘What is your target market?’
‘The rich. That’s why I’ve already decided where I’m going to launch my first outlet.’
‘Where?’
‘On the King’s Road, in that row of shops between Sloane Square and the Saatchi Gallery. It’s one of the richest streets in the world.
People
who shop there have lots of money, and a lot of them have children, and children love ice cream.’
‘Shop rents on the King’s Road are very expensive.’
‘Three hundred and fifty thousand a year.’
‘How are you going to get these people into your shop?’
‘By being a luxury brand that rich people would want to be
associated
with. It’s essential that the business attracts the right sort of
customer
which is why I’d place my products right at the top end of the market. I’m not going to be selling cones for a pound, I’ll be selling the best ice cream money can buy at prices only a select number of people can afford.’
‘But aren’t you limiting your market that way, if only a fraction of people can afford to buy your product?’
‘No, I don’t think so. If I made it too cheap, my shops would be
overrun by teenagers and people with nowhere else to go. I want to make it look and feel more like a Bond Street jewellers. I want people to think twice before coming in.’
‘How much are you planning to charge for your ice creams?’
‘A cone would be at least ten pounds. A bowl of ice cream and a seat at a table would start at around twenty-five pounds per head.’
‘And you think people would pay that?’
‘Yes, definitely. My target customer is the woman who has just spent three grand on a handbag, or the man who’s just bought himself a new Jacob Perville suit in Peter Jones and needs to take the kids somewhere for a treat. If people will pay three grand for a handbag, or two hundred grand for a car, they’ll pay a tenner for an ice cream.’
‘What makes you so sure?’
‘I know how the rich think.’
Fred links his hands and brings his index fingers to his chin. ‘Would you just sell ice cream? Do you think that people would buy ice cream in the middle of winter?’
‘Ah, I’ve already thought of that. You know how in the summer
Star-bucks
sell iced coffee, frappuccinos and other cold drinks? Well, I’d serve ice cream warm.’
‘Warm, how would that work? Surely by its very nature it’s a cold dish?’
‘No, warm ice cream would be a huge seller. It would obviously still be cold to an extent, but I’d create new flavours which would warm
people
up, using brandy and other ingredients. Think of dry white wine. Wine is wet, but it can be dry at the same time. My ice cream would work to a similar theory. We’d have a designated winter range. People would love the innovation and the novelty. I’d also serve drinks of course: coffee, lemonade, tea, whatever people wanted depending on the time of year. Another factor is global warming. Scientists predict that in five years’ time the average temperature will increase by around three degrees per year and when the weather gets hotter, people want to eat something that cools them down.’
Fred clicks his gold pen. ‘Who’s actually going to supply the
product
?’
‘I’m in negotiations with several suppliers at the moment. One in Manchester and another based in Cornwall who makes bespoke flavours.’
‘And how far have you got with negotiations with them?’
‘I’m in the process of drawing up contracts.’
‘So you already have some financial backing?’
‘Yes. I have two private investors who have put in three hundred thousand each.’
‘And who are they, may I ask?’
‘My uncle and his business partner.’
Fred writes that down on his pad and then scribbles something else out. He looks intensely at Mark. ‘You said you were an entrepreneur, Mark, but what actual experience have you got of running a business?’
‘Yes,’ Mark says and drinks some more water.
‘Can you tell me what exactly?’
‘At the moment I’m a junior director at Runoff Investment
Securities
.’
‘Yes, but that’s not
your
business is it?’
‘No, that’s my nine-to-five job. I’ve worked there since university to get experience in a corporate environment as I thought that was vital to my development as a businessman, but I also have another company that I run in my spare time. I’m a property developer.’
‘And how long have you been doing that?’
‘For a couple of years. I buy properties, mostly abroad, renovate them and then sell them on.’
‘And you do that on your own?’
‘No, with a business partner, Craig Tennant, he looks after the
business
on a day-to-day basis. I’m the majority shareholder and make all the big decisions.’
‘And has your property business been making a profit?’
‘Err, yes, we turned over £1.34 million last financial year.’
‘That’s a lot for a two-person operation.’
‘But we have a team of contractors employed almost twelve months a year, so it’s far more than just the two of us.’
‘And you posted a profit?’
‘Yes. Last year it was five hundred thousand.’
‘You made a five hundred thousand pound profit on a £1.34 million turnover? And I would be able to see the accounts of this business would I?’
‘Err, yes, I’ll bring them in one day.’
Fred pauses. ‘You seem very young to have had such a successful career so far. How old are you?’
‘Twenty-six.’
‘That is young.’
‘Yes, but look at Alan Sugar or Richard Branson, they were much younger than me when they were millionaires.’
‘Perhaps. So I take it that you have already invested heavily in this new idea?’
‘Yes. Thousands.’
‘And you want the bank to invest some extra capital just to push you over the line?’
‘Exactly.’
‘Can I see your business plan?’
‘Yes, of course.’ Mark opens his folder and hands Fred a single sheet with a single paragraph printed followed by a short column of figures.
Fred reads. ‘Mark, this isn’t a business plan.’
‘That’s the simplified version. The long plan runs to over ten pages.’
‘That would have been what I wanted to see.’ Fred glances back down at the sheet. ‘It says here that your running costs would be over one million pounds a year. You’d have to sell a lot of ice creams to make that back.’
‘Yeah, but I’ve factored that in, haven’t I, in the figures.’
‘Yes, you estimate you’ll sell, on average, one thousand ice creams a day at an average price of twelve pounds.’
‘Yes, that gives me an income of four million three hundred and twenty thousand per outlet per year. That’s a massive profit.’
‘Mark, experience tells me that people just won’t buy any kind of luxury product at that price in that quantity.’
‘They will. Think about how much money people spend on alcohol.’
‘Yes, but having a drink is all part of socialising. People will not sit in your ice cream parlour all night and have ten ice creams.’
‘They will when I build it. You wouldn’t have thought people would sit around drinking coffee or eating pizza or fish and chips but they’re all successful markets.’
‘Yes, but a pizza or fish and chips is a substantial meal at a far cheaper price. Also I think there’s the health aspect to consider. People are very health conscious these days. They won’t want to be seen to be pumping
themselves and their children full of ice cream.’
‘The average person in Britain is morbidly obese. I don’t know if you’ve been to an Asda or Lidl recently. Those people would lap up my idea.’
‘But the average Asda or Lidl customer isn’t your target consumer, or am I wrong?’
‘No, that’s the genius. They would aspire to eat at one of my
parlours
. They’d save up and go there as a special treat. Once they were inside, they’d be so blown away by what was on offer they wouldn’t be able to help themselves.’
‘Mark, I’m finding your pitch very confusing. I simply cannot see how this would be a viable business.’
‘How about Starbucks then? Do you not think that’s a viable
business
either?’
‘Starbucks would not sell many coffees if they were in excess of ten pounds each.’
‘You don’t know that. They have a loyal customer base that would go there whatever it cost. People in the City who queue up at Starbucks every morning haven’t got a clue how much it costs, they just hand over the cash.’