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From ice cream vendor to Dragons’ Den millionaire.
What business can be learned from Duncan Bannatyne’s first ice cream venture?
Duncan Bannatyne is best known for his appearances on the hit BBC show “Dragons’ Den.” The British business show is the basis for the popular American version, Shark Tank.
Duncan Bannatyne has had a long and successful career as a businessman.
However, he wasn’t always as wealthy and powerful with a rich network.
His first venture was his small self-operated ice cream van business, which not only provided delicious treats to customers but also taught valuable lessons in entrepreneurship.
In this blog post, we’ll take a look at some of the greatest business lessons that can be learned from Bannatyne’s ice cream vending venture.
Also Read: Duncan Bannatyne’s Path to Wealth, Net Worth, Books, Daughters, Twitter
Duncan Bannatyne’s Humble Start
Duncan Bannatyne was born on January 2, 1949, in Clydebank, Scotland.
He grew up in a working-class family and had a difficult childhood, marked by poverty and family struggles.
Most importantly, he mentions in his book, Anyone Can Do It, that his family did not have any hunger to strike it big.
“Working-class people like us do not go out and open businesses,” his Dad would say.
After leaving school at the age of 16, Bannatyne began working in a variety of jobs, including as a welder in a shipyard and as a clerk in the navy.
Rebellious and Purposeless
Duncan Bannatyne hated every moment of serving in the navy.
Particularly, he did not like his commanding officer, Lt Stuart Hall, who used to single him out for punishments for minor infringements.
Duncan was dishonorably discharged from the navy after throwing the commanding officer off the ship deck in front of his colleagues and guests at a party onboard.
After leaving the navy, Bannatyne returned to Clydebank, Scotland, and did whatever odd jobs a person without education and experience would find.
The work led him to a reckless life of partying and living a carefree surfer life on the beaches of Jersey.
After years, it wasn’t until he realized that he was the oldest person at the party the previous day that he understood he needed to take control of his life.
How do I become a millionaire?
While on his reckless living in Jersey, Duncan Bannatyne had read an intriguing story in the newspaper.
The story was about how a man had started from nothing to become a millionaire.
Duncan Bannatyne later said that the story must have been about the business magnate Alan Sugar.
This story, plus his desire to have something bigger for himself, led him to leave Jersey with his then-girlfriend.
Ice Cream Vendor
After leaving Jersey, Duncan Bannatyne started his own business, an ice cream van.
Duncan had experience selling ice cream on the beaches of Jersey. It was one of the many odd jobs he did there.
He then bought a used ice cream van for cheap at an auction, at the price of £450.
This was when he set on his journey, and unknowingly, to the path of lifelong entrepreneurship.
Greatest Business Lessons from a Small Ice Cream Vendor
Lesson 1: How to start with no money and connections
Duncan Bannatyne did not know anyone who had started a business.
None of his friends or working-class family members had ever done anything like this before.
Duncan also did not have the money nor the contacts to help him in his venture.
But he needed contacts to meet ice cream manufacturers and suppliers to make this small business work.
However, unwilling to submit to his circumstances, Duncan looked up ice cream suppliers in the Yellow Pages.
He simply phoned every single one of them, until he had hunted the best deal.
This trait of Duncan Bannatyne has been consistent throughout his prolific entrepreneurial journey that followed.
He later delved into bigger and more diverse sectors as he progressed, without education and contacts.
Refusing to hire a middleman or a law agent, he had to read every single government document to make sure his companies passed government jurisdiction and abided by legal standards.
This is a valuable lesson for all wannabe entrepreneurs and start-up founders.
Often, we get entangled in the complexity that comes with legal stuff and countless small decisions to take in the early phase of a business.
But by manually putting in the work to scour the best suppliers, and learn the legal mandates, and the ins and outs of running a business, Duncan Bannatyne has taught us that anyone can do it.
Lesson 2: How to find the best deal in business
Duncan Bannatyne had the option to sell ice cream manufactured by the big brands or from the smaller companies.
Duncan Bannatyne realized that these big companies spend excessively on marketing and subsidizing, so much so that it would hurt the final profit margin.
Meanwhile, lesser-known manufacturers gave as much as 80% profit margin on some of their products.
Of course, Duncan chose the lesser-known suppliers. This allowed him to earn a higher profit even if he sold a smaller volume than his competitors.
Lesson 3: How to manage your business the smart way
Inventory management is very important in both small and big businesses. If you order too few from your suppliers, you lose potential sales on any extra order you receive.
Meanwhile, if you have too much stock, you lose cash flow and carry the risk of the products never being sold.
After deciding on his supplier, Duncan first ordered a small quantity of ice cream products.
He then sold them on a weekend and worked out how much he had to order for a given time period.
If you had started the same ice cream venture, what would you do in that situation?
Would you be as bright as Duncan or would you be boggled down by the seemingly unsolvable problem of how much stock to hold?
In Duncan Bannatyne’s ice cream business, it was the inventory problem that needed careful consideration. In other businesses, it may be a product launch, customer service, or issues of complaint handling.
Even if you do not have an educational background or knowledgeable contacts, you do have the ability to be smart and use common sense.
Duncan Bannatyne proved in his first venture that good old common sense beats all MBA business models and systems.
Lesson 4: How to innovate in business
Duncan Bannatyne has never owned an invention patent in any of his business ventures.
He has always done the same old, boring thing of any industry, but in an improved way.
However, even though he did not invent a specific formula or product, one can not say that he lacked innovation, as his story proves.
The problem with buying from lesser-known suppliers that gave a lucrative profit margin was that they supplied hard ice cream. This made it difficult for Duncan to scoop the ice cream, as it took time to melt.
In contrast, many ice cream vendors were serving soft ice cream, which was convenient and fast.
To not let this hinder his competitiveness in the market, Duncan did something very visionary for an ordinary ice cream vendor: he imported better scoops from abroad.
This special scoop that he imported from America did not have trouble scooping the hard ice cream.
But how did Duncan know about this special scoop? He had once used it when he was selling ice cream on the beaches of Jersey.
Notice how what he did even when he was living a reckless life helped somehow in his first venture. In life as a youth and early-stage founder, we often wander aimlessly and wonder whether what we do today will ever add up to anything.
But the thing to realize here is that our goal right now should be to make as many dots on our chart of experiences as possible. With time, these dots will connect in one way or another and make us stronger than our competitors who never wandered away aimlessly.
The more you f*** around, the more you find out, this is a meme that’s viral on the internet right now, and Duncan Bannatyne would probably love it.
Lesson 5: How to create a competitive advantage
Duncan’s ice cream venture was simple, but do not mistake thinking it was ordinary.
While using his special scoop imported from America, he noticed that the scoop left a little mark on the ice cream, one that looked like a smile.
Duncan filled the smile with strawberry sauce and added aniseed balls for eyes.
BOOM!
He had created a premium product out of plain, boring ice cream. This allowed him to charge higher for his ice cream than his competitors.
Such business acumen! You may be wondering.
Furthermore, Duncan Bannatyne gave names to all his ice cream products himself, calling them Muppet Bear, Raspberry Ripple, and even Frog Smoking a Cigar.
However, the story does not end at that.
Duncan Bannatyne also clicked photos of children who bought from him and put them up on the van. This made the kids feel special when they saw their own picture the next time they bought ice cream.
Of course, all the children wanted to keep buying from Duncan.
Lesson 6: The art of spotting growth opportunities
When Duncan Bannatyne was constantly innovating and trying to beat the competition, his competitors were comfortable with just doing the bare minimum.
But Duncan Bannatyne had a hunger to do more, and be more, and this is one of the biggest lessons that resonate with an ambitious person.
He once saw an advert in the newspaper that local parks are selling contracts to ice cream vendors. This meant that, at a fixed fee, only one vendor could serve park visitors.
But note that Duncan Bannatyne was still new to the area. So he bought a map and located all the parks.
He bought into the contract at Stewart Park for £2,000. In one summer, he had made £18,000 in that park alone.
Easy money.
Why did other vendors who were familiar with how much profit the parks could generate not jump at the opportunity?
They were not proactive, and they were satisfied with what they had.
The lesson here, therefore, is to always be proactive as a business owner. Always be at the edge of your seat and the tip of your toes, and pounce at the right opportunities as soon as they come up.
Speaking about pouncing on opportunities, notice how reading the local newspaper had already helped Duncan Bannatyne: once in motivating him with the story of a millionaire, and then with knowing about this contract opportunity.
People with shrewd business acumen stay on top of recent developments around them. Today, the internet has made opportunities far more accessible.
Being a millionaire, as the millionaires themselves say it, is easier now than ever before.
As a business lesson from Duncan Bannatyne’s story, ask yourself: how can I use the internet to find growth opportunities and kickstart my business legacy?
Lesson 7: The next step in business is always to scale
The world would never hear about Duncan Bannatyne if he had stayed happy with his one ice cream van.
He would make a living for himself but live an unremarkable life.
The story became real only when he saw other ice cream vans for auction during winter when they would be offered at low prices.
He did not consciously make a decision to scale his business, but with common sense, he asked himself,
“Why would you not want to buy something that made you more money?”
With this, he was investing in more vans and multiplying his cash flow.
Duncan Bannatyne’s Ventures After This
Long story short, Duncan Bannatyne delegated, scaled, and created a very successful ice cream chain.
This increased size allowed him to overdeliver more than his competitors.
He would then venture off to establishing elderly care homes, childcare centers, and health clubs, eventually becoming the person he became today.
But one thing has been consistent: in every venture, he started small, with one institution, one health club, and one care home, and has used the learnings to scale.
More details about his ventures after the ice cream business will be discussed in upcoming articles.
Wrapping Up
Bannatyne started his own ice cream vending business with little money and no connections business in the 1970s.
Despite facing numerous challenges, including a lack of start-up capital and limited experience in the industry, Bannatyne persevered and built a successful business.
He would go on to use the profits from his ice cream van to invest in other ventures, eventually becoming one of the most successful entrepreneurs in the UK.
While his first venture was small and insignificant, there are precious business lessons in this journey that he used later to create a bigger legacy.
We can also take inspiration and lessons from his first ice cream vending business to start something of our own and get started with creating our own legacies.
