Tuesday, March 06, 2007

An Incredible Business Started By A Convicted Criminal That Relies On Drug Dealers, Beggars And Drunks.


The Big Issue is probably the best-known social enterprise in the UK. Started in 1991 by John Bird, the concept is simple – a street newspaper, compiled by professionals and then sold to homeless people to sell on the street at profit. However, it is not a charity. The Big Issue is, first and foremost, a business. So whatever you do, don’t called Bird a ‘do-gooder’.

Raised in Notting Hill just after the Second World War, Bird was in and out of homelessness and institutions from the age of five up until his mid-twenties. Consequently, finding ways to make money, legal or not, became part of his survival instinct from an early age.

“I’ve always been an entrepreneur,” says Bird. “I started going down to the market in Portobello and dragging wooden boxes round to people’s houses to sell as kindling.” By 10, Bird was collecting money for refugees – with no intention of actually donating the cash.

“Begging is very entrepreneurial,” he insists. “I would tell the most elaborate stories. I once advertised a book in newspapers which people sent me money for.” The papers never received their fee or the customers their book – but Bird made a tidy profit. He later transgressed to break-ins, shoplifting, benefit fraud and smash and grab thefts, while he’s previously also admitted to arson and vandalism. Several stints in prison followed.

Determined to ‘go straight’, Bird started his first legitimate business in his mid-twenties, selling enlarged versions of Victorian drawings. He then set about learning “everything there was to know about printing and publishing”, and started to publish books and magazines for other people.

The idea for The Big Issue was suggested to Bird by Gordon Roddick, co-founder of The Body Shop. The pair met years earlier, when Bird was “on the run from the police”. Bird’s quick to point out Roddick wasn’t involved in his life of crime, but says the two hit it off instantly. “Gordon was fascinated by me and I was all for telling people what a genius I was.”

Years later Roddick had seen a copy of a street paper in New York and decided it was something to try in London. Roddick asked Bird to head up the project due to his first hand experience of street life, but he was initially reluctant.

“I didn’t want to do it because I wasn’t interested in charity,” he says. Roddick’s solution was for Bird to run the magazine as a business. It proved to be the clincher, and Bird was on board.

The first job was to conduct a feasibility study and estimated start-up costs. Bird commissioned the help of someone who had already written a study proving that a street paper could never work. “I contacted this guy and said ‘look I’ll give you some money, and we’ll just change all the figures around to make it look like it’ll actually work’.

Bird came up with a start-up figure of £30,000, but before long he’d lost control of cashflow and costs had spiralled to £300,000.
Large sections of the homeless community were also initially reluctant and untrusting. “We had our vans broken into and staff attacked as they thought the magazines should be free. My attitude was to explain how it had to work but if they still didn’t want to do it and help themselves, then it was basically fuck you.”

With Roddick worried about finances, Bird had three months to turn it around. He remained confident, however. “At the time I was selling the paper for less than it cost to produce. I wanted to build up the reputation, which I did. It created enormous interest from the sellers who believed in it.”

To cut losses of £25,000 a month, Bird slashed printing costs, let 10 of his 30 employees go, and doubled the price of the magazine. It worked – after three months they were making a monthly profit of £1,000.

The magazine now has a UK ABC-audited circulation of 154,932, attracts advertisers such as Sony, BT and Barclays, employs 250 people and is sold by 2,000 homeless people who receive comprehensive vetting, training and support. Bird reports an 8-10% profit margin.

Much of his time is now spent promoting the magazine. He’s also currently pushing his community loyalty scheme, the Wedge Card, which would offer discounts in conjunction with local shops and businesses. And if that is not enough to contend with, he’s intent on standing for London mayor.

Mayor Bird would dedicate his resources to helping social enterprise among the poor. “We’ve got to start dismantling the road blocks stopping people getting through – the people in prison, and in bad schools and on the streets – and it’s got to be done by encouraging enterprise.

“Some of the most enterprising people I’ve ever met have been drug dealers. I’ve known people that are geniuses of organisation – they’re running drugs so why can’t they run a mini cab business?”

“Look at me. I was a right arsehole and if I met that me now I wouldn’t talk to him.”

Bird believes true entrepreneurs are natural risk takers. “You’ve got to be somebody who takes risks – with your money and other people’s – but you can’t get frightened. I don’t lose any sleep over the risks I take. In fact I wouldn’t describe myself as a risk taker – I’m reckless.”

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