What You Can Learn From the Man Who Lost £250,000 Overnight.
September 9, 2007
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If you’ve been reading my posts for a while, you’ll know I often warn against the dangers of trying to get rich quick. So, I had to share this shocking story of the man who lost £250,000 ($500,000) overnight.
Amazingly, despite going bankrupt only a few years ago, former bus driver Andy Banwell was able to borrow a quarter of a million pounds all at once.
It wasn’t an amazing business plan that helped him secure the cash. He simply took out four seperate loans and got himself 17 credit cards. And his idea was to make a million as quickly as possible and repay the money he borrowed.
Before you attempt to do the same, read on to discover what went wrong and why.
He Didn’t Want to Build Anything of Value:His goal was to make money fast. He wanted to make a million pounds and pay off the initial investment as quickly as possible.
He Didn’t Do Any Research:He invested the cash in leases on four pubs for three reasons: a) Someone told him it was a good idea. b) Lots of people drink in pubs, so there must be money to be made in them. c) He drank 20 pints and a bottle of vodka a day himself.
So, he didn’t research at all, he just guessed. And how on earth could someone who put away that much drink be sober enough to run a business? It’s a miracle that he’s still alive.
He Didn’t Do the Maths: Obviously, repayments and interest on that amount of cash would have been massive. But, Andy said that to him, interest rates were irrelevant, because he thought he was going to become a millionaire. And he never even considered the amount of time it would take to build the four businesses.
18 months later, Andy is bankrupt, but he hasn’t given up on his dream of becoming a millionaire. And he’s now planning to move to Cyprus with his family and open a restaurant.
I suppose the one thing Andy has going for him is that he’s not afraid to take risks. Fair enough - it was other people’s money he was risking, but they were stupid enough to lend it to him. Unfortunately, being a risk taker is not enough to succeed - especially if they’re not calculated risks.
What you can learn from Andy’s mistakes: 1)Whilst Andy’s case is extreme - millions of people start a business without doing a single bit of research at all, or even trying to learn a thing about business. And these people are all included in the statistics that measure failed businesses, so the figures are nowhere near as bad as they seem.
And, by educating yourself, and doing your homework, you have far more chance of succeeding than those who don’t bother.
2) It’s dangerous to drink 20 pints of beer and a bottle of vodka a day.
Comments
9 Responses to “What You Can Learn From the Man Who Lost £250,000 Overnight.”
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Poor man…or rather, poor his kids. And once again he is going to start a restaurant ? mhmm, sounds like an idea, but seems like he hasn’t done research again.
What kitchen is he going to serve in Cyprus ? Turkish kitchen or Greek kitchen? And as far as I know, only 10% of restaurants survive and can have a long time business, while the rest, bankrupt or simply decide to sell after they have build trustworthy with their customers.
Anyway, Good luck to him.
P.s. i prefer Gin rather than vodka, but not a whole bottle.
Oh, boy.
Obviously he drinks and enjoys drinking, if he can drink so much a day, and is willing to invest his cash in pubs. If he could have focused on what he would do to make the pub experience the best, he may have succeeded. There are so many restaurants, and amazingly some are really good and some are really bad even on the same street. I hope he has learned from the experience, and next time, focus on really building a USP.
Excellent post with a story that made me wanted to keep reading since the headline was eye-catching.
Calculated risk is what you need to take to make big money, but there is a lot of planning too.
Good post! You will get a link back from me soon for this since it got added to one of my “favorite posts of the day list”
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What a madman. Seventeen credit cards? Gosh. He blew one big opportunity.
Asako - hopefully he will learn by his mistakes. It would be a good follow up story if he did.
Sean - thank you for the feedback and also the link. And I love the Why I Don’t Comment On Your Blog post.
Angel - I don’t understand how he managed to get 17 cards. I thought they ran credit checks to see how much finance you had already.
Sounds like he doesn’t understand that restaurant work is some of the most time-consuming work on the planet. In order to make a restaurant succeed, most restauranteurs must spend long, long hours (like 16 hour days, 6 or 7 days a week) to make a “go” of things. The only time I’ve seen this be different is in the case of people who buy franchises of existing successful companies. And even then, hard work is required.
From his past experiences, it doesn’t sound like this man is ready to put in the months/years of long hours and hard work to make a “restaurant in Cypress” work out.
[...] What You Can Learn From The Man Who Lost £250,000 Overnight: An intriguing story about a man who borrowed thousands on credit cards to start a business that crashed within months. [...]