“You’ll never raise that much!” This was the response from most of my friends and family when I shared my plans to crowdfund £500,000 to take my wine importing business to the high street.
I’d been importing wines directly from boutique vineyards for five years – selling them to private clients and hosting tastings for corporates. Many of my clients had suggested that a wine bar or shop would be a great way to showcase the wines and connect the winemakers to the customers. So, in May 2014, I looked into crowdfunding and felt that this would be the best way to raise some cash.
A few spreadsheets later, I’d decided that £500,000 was the amount required to cover the premium for the site, the first six months’ rent and other running costs, with a big chunk left over for marketing and potentially a second site soon after.
However, of all the challenges I’ve faced in business, funding was the easiest to overcome. The real challenge, and one I hadn’t considered would be a problem at all, was to find a site.
There seemed to be lots of sites available in central London, and after registering with a few agents, potential sites were emailed to me on a daily basis.
We were looking for a central London site, with Shoreditch as our favoured location. The agents were helpful enough, although none of them explained how the process really worked. They simply encouraged us to pitch. I fell in love with the first site we saw in Shoreditch, which was an old bank.
Immediately, as with finding a new home, I’d mentally moved in. I’d imagined where the bar would be, the tables, even designed the sign in my mind. But a few weeks later we were informed that the landlord had decided to go with another bar brand.
We continued looking and pitching. Each time we refined our pitch. Yet each time we were rejected. It seemed no landlord would consider us, because we were a new concept. It makes sense with hindsight. Why would a landlord gamble on a new venture, headed up by someone who had no experience running a wine bar, when they could opt for an established brand instead?
Nearly a year later, after we’d pitched for dozens of sites, our investors started asking questions. They were losing faith in us and some were even asking for their money back. We were starting to worry that we’d let them down. I was losing sleep. I registered with more agents. I scoured the businesses-for-sale websites and we kept pitching and pitching.
The market was booming and big brands were always given priority. All that was left for us were sites with huge premiums, £300,000 to £1m for the right to a lease. Our brand is Humble Grape. Our ethos is making great wines accessible to all. Only concepts with huge profit margins could pay back a premium like that, something I was not prepared to do. I knew I had to stick to my principles and not compromise the ethos of the brand.
Eventually, after yet more sleepless nights, I decided to take matters into my own hands. I ditched the agents and started walking the streets looking for bars and restaurants that might be failing that I could approach. As you might expect, the owners weren’t thrilled. They thought I was an agent and told me to go away. When they found out I was a business owner looking for a site they seemed even less receptive or else quoted a crazy sum to sell for. One small, and very empty, restaurant offered to sell for a £900,000 premium.
I finally had to accept our wine bar would not be in central London.
The following week, in February last year, my wife and I got chatting to a lady whose restaurant was behind our house, on Battersea Rise in south-west London. She told us she was in financial trouble and desperate to get out of the restaurant business. Straight away I made an offer, and she accepted. I spoke to the landlord the following day and he was happy with the arrangement.
It wasn’t the ideal site; in fact, it was a big risk. It’s on the corner, at the top of Battersea Rise, without much footfall and had changed hands many times. However, I was determined to make it work. Within three months of opening, Humble Grape wine bar was buzzing. We quickly climbed to the number one slot on TripAdvisor and within six months word in the industry spread. Landlords started contacting me directly asking if I’d be interested in their sites.
Then an agent approached us about a site in central London, just off Fleet Street, formerly the Press House Wine Bar. It was stunning and offered to us with no premium. It opened in May and has been a huge success.
Now it seems we can have our pick when it comes to sites. Yet if I hadn’t faced that initial challenge, I wouldn’t have realised that our offering worked as a neighbourhood wine bar, something which has heavily steered our future plans. And in desperation, I may have been tempted to compromise our ethos, which would have been suicide for our brand. I’m glad I kept it Humble and will continue to do so for all future sites. Whatever it takes.
James Dawson is founder of Humble Grape
Sign up to become a member of the Guardian Small Business Network here for more advice, insight and best practice direct to your inbox.
