Business Killers: The Reason Profitable Businesses Still FAIL

Looking into the reasons why businesses that look profitable on the front could still fail and why even the biggest brands cannot hold onto success. I also dive into the traits of very successful businesses and what we can learn from them to deploy into our own entrepreneurial ventures.
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Who am I?
My name is James Sinclair and I'm the founder and CEO of The Partyman Group of Companies. I started building my business when I was just 16 as a family entertainer after that I built up an entertainment agency, then moved into building a leisure and day nursery businesses. Today we operate a £30 million business which includes leisure, childcare, outdoor attractions, commercial property, arts and crafts manufacturing as well as one of the UK’s oldest Ice cream companies; The Rossi Ice Cream Company.
#business #businessowner #entrepreneurship
⌚️Timestamps:
0:00 Introduction
0:03 WHAT CAUSES A COMPANY'S DOWNFALL?
0:30 WHAT IS THE MODEL FOR A SUPER SUCCESSFUL BUSINESS?
5:05 FRICTION
7:54 PROMOTION
8:44 PEOPLE
10:22 PROFILE
11:47 PRICING ARCHITECTURE
13:18 PERPETUAL INCOME
14:23 PROPRIETARY LANGAUGE
15:16 PROPERTY

[@luiskp7173]

Ferrari isn’t a Car company. It’s a racing team that sustains itself selling cars & merch. They don’t have costumers, they have fans.

[@zeropaloobatheuber1572]

I agree, Ferrari started that way. I think now, it’s almost a fashion company. As James said-watches, clothes, Ferrari branded merchandise.

[@mavrosyvannah]

Who makes the racing team costumes then, if they have no costumers?

[@justsomeguy1141]

Good short essay, you nailed the Ferrari thesis

[@justsomeguy1141]

@@mavrosyvannahdon’t be trite

[@jamaludin_x]

Screenshotted this one, very nice

[@BenjaminMazs]

Please don't ever stop making videos James! 🙏🏻 I enjoy them so much. Thanks

[@JamesSinclairEntrepreneur]

Cheers, first comment! I’ll keep making them - even if it’s just for you!

[@BenjaminMazs]

@@JamesSinclairEntrepreneur you have no idea how happy this response makes me! Your content is brilliant. Wishing you all the best mate! 👍🏻

[@seasons7510]

Do you ever worry about going bust

[@himedft]

This a great video, I learn alot watching your videos and it has been helpful to me. building steady income is quite difficult newbies.Thanks to Sophia for improving my portfolio,keep up with good videos.

[@Mavistyio]

wow that's awesome news

[@Mavistyio]

but I recommend Mrs Sophia she's my bitcoin trading manager

[@bennyhinu]

Wow I' m just shock someone mentioned expert Sophia I thought I'm the only one trading with her

[@bennyhinu]

She helped me recover what I lost trying to trade my self

[@akenemabresi]

Mrs Sophia has changed my financial status for the best.all thanks to my aunty who introduced her to me

[@elslopez]

I like the energy you bring in these videos, I assume you are like in your businesses? The complete opposite of all those energy vampires out there!

[@rachelibrahim6130]

I'm so glad I came across your profile. I am thinking about getting into a new business again after a couple of failures over the years and struggling with figuring out what to do. One thing I've learnt from you is to think carefully about what industry to get into to give you the best return on investment and to think bigger than just a having a small side hustle. While I ponder on that and take my time deciding what to do, I'm learning a lot from your videos and find the information you provide, inspirational, insightful and packed full of great advice, so thank you for all of this great wisdom and advice!

[@dotpenji]

Hey there, let me start by saying your insights on business success and the examples you shared really shed light on some key factors that contribute to a company's downfall. It's evident that you have a wealth of practical experience to draw from. 😊 I'm curious about something you mentioned regarding innovation. You highlighted how companies like Lamborghini and Toys R Us could have turned their situations around through innovation. In your opinion, what are some effective strategies that entrepreneurs can employ to foster a culture of innovation within their businesses? Looking forward to learning more from you! 🚀

[@kristineambas]

I agree! Your insights on business success and the examples you provided offer valuable lessons. I'm also curious about effective strategies for fostering innovation within businesses. Looking forward to your insights on this topic! 🚀😊👍

[@aicetaylor8332]

It's wonderful to hear that these discussions illuminated the crucial elements that can lead to a company's downfall. Thank you for recognizing the practical experience that forms the foundation of these insights.

[@MarkexcelSarsaba]

It's great to know that these conversations have shed light on the critical factors that can contribute to a company's downfall. I appreciate your recognition of the practical experience that underpins these insights.

[@monicasoriano8581]

I found this video quite valuable, Fostering a culture of innovation within a business is essential for staying competitive and adapting to changing market dynamics. I think fostering a collaborative environment is another key, Encourage collaboration and cross-functional teamwork. Diverse perspectives and skill sets can lead to creative solutions. Create spaces or platforms for employees to share ideas and collaborate on projects. Fostering a culture of innovation is an ongoing effort that requires commitment and adaptability. It's not about pursuing innovation for its own sake but aligning it with your business's goals and vision for the future. By creating an environment where creativity and innovation are valued, entrepreneurs can position their businesses for long-term success and adaptability in a rapidly changing business landscape.

[@markanthonymanayan2136]

This video on 'Business Killers' offers valuable insights into the challenges that can undermine even profitable businesses since this reminds us the importance of addressing these issues proactively. Thanks for sharing this informative content!

[@adancewithgod]

I totally agree with owning your own building. I've seen a recession and all that's left are the empty strip centers. Tons of mom-and-pop retailers come and go and the building and landlord are still there.

[@sophiemoconnell]

LOVE this video! Some of what you mentioned is what Mattel are doing now with the 14 films in their pipeline. They have so many well known IPs under the Mattel umbrella that they're now specialising in selling those IPs. It's a smart move to go away from being a simple toy company as it's been a notortiously volatile kind of business, particularly over the last few years. As for Ferrari vs Lambourghini, there is one more thing that makes me think why Ferrari have the staying power. Ferrari is fiercely protective over their brand in a way Lambourghini isn’t. Ferrari is all about EXCLUSIVITY. Not only do you have to jump through a bunch of hoops and waiting lists to buy a new Ferrari. Oh, and if you’re even accepted, if you resell your Ferrari, mod it or do anything Ferrari deems as devaluing their brand, you're blacklisted forever.

[@bert2thejack611]

James, with the Toys R Us example you missed the part where the investors brought the company with a leveraged buyout, and then saddled the company with the debt it used to buy the business. Leading to its downfall...

[@JamesSinclairEntrepreneur]

I did mention it was laden with debt. I absolutely did.

[@ranjithpowell6791]

I think his point is that ladening the Company with debt wasn’t the Management’s fault.

[@bert2thejack611]

@@ranjithpowell6791 I think he means it doesn't play into the video's wider narrative. So it's conveniently left out for explanation's sake, it's not good a method of histography though...

[@DJWESG1]

​@ranjithpowell6791 I can't think of a few football clubs over the years that tried a similar approach..

[@LatinosOver40]

All good info James .... Gracias Amigo !!!

[@MoctezumaStudios]

When you first start off and you don't have loyal customers yet you need to know what demographics will buy your product and where the money is. As soon as you know where your money is you either settle your business in that area, if its too expensive then you have to focus your marketing to where you clients for your product are. Once you have enough cash flow to be sustainable you can then FOCUS on growing your client base to a larger audience and this also might happen while you focus on your demographic by word of mouth. If you have a good product customers will then follow you despite the distance. If anyone can relate.

[@georgepresley5120]

DSTV suffered the same fate just like blockbuster. They were all over Africa with no competitor and they got so comfortable and didn't innovate..then came KZbin, Netflix,showmax,etc. If it were not for supersport I don't think DSTV would be in existence..they exist with heavy losses though

[@brentmitchell7115]

Great Stuff James! You are giving me a reason to come to London to listen to you in person. I especially like it when you share what hasn’t work along with what has. Very helpful.

[@JamesSinclairEntrepreneur]

See you there!

[@EnhancedNightmare]

Blockbuster actually was on verge of entering streaming but got busted by debt of its owners. Such a backstabbing problem lol.

[@johnedwards1229]

Content so good. I love it. Thank you!!

[@Markmywordschannel]

I don’t have a business but I love your videos and your passion

[@stickyman7585]

I have found the advice here really useful for a non-profit community enterprise I am involved with. We are trying to create a 'product' in the form of disused railway viaduct transformed into a raised garden. He ideas and advice James gives can be applied as we need to sell the idea and keep 'customers' coming back for repeat visits. Thanks James I shall be watching more of these.

[@wellardme]

Just come across you and subscribed with so much ferocity! Brilliant info from a top teacher. You explain everything perfectly!

[@tarmaralyndsey]

Brilliant quality content tonight! Thoroughly enjoyed and very informative.

[@JamesSinclairEntrepreneur]

Very kind of you to say!

[@rocastro37]

Your videos are gold James, but can ever brigth more if you team set a index in the description.

[@freedone.]

Love your vids and your energy! Disney is an example of a company that had a lot of success and now is struggling due to poor decisions, pushing a social agenda instead of entertaining and taking on too much debt.

[@Anthonybrother]

Other rich pedos will give Disney money if Disney start to actually struggle

[@Ragnar6000]

Been binge watching the channel great content...Keep up the great work, cheers from Aus : )

[@JamesSinclairEntrepreneur]

Welcome aboard!

[@the_failed_states]

I think an issue for Toys R Us was that they had no choice when it came to property, in that in Australia at least retail happens in malls and the rents in these are hugely expensive- but the bigger issue for Toys R Us was that kids were/have/are leaving physical toys for virtual toys - computer games. The only time we ever shopped in a Toys R Us was for a birthdays gift for a kid's friend, and we were hardly going to spend hundreds. They should have gone on line, or massively sold computer games. Also, excellent video as always.

[@crocopie]

I believe there might be a comeback for physical toys. First, they can diversify their products for dogs, especially for intelligent breeds like corgis and dobermans. Secondly, parents are increasingly becoming concerned that digital exposure makes kids more "dumb". I have strolled a LEGO store and both boys and girls enjoy playing these blocks we all love.

[@wild4fp]

They were always way expensive

[@Anthonybrother]

Only thing i ever bought from Toys R us was Beyblade toys. Also, i now think that being into collectibles is a mental illness.

[@Ruxxnation]

Speaking of friction, it would be great if you could include links in your video description to your best videos or videos to 'get to know you'. E.g. a video on where you started out. My partner and I really enjoy your videos - thanks for all your hard work putting them together.

[@mm3dgraphics]

Fantastic educational business videos. I really like this "short course" or "analysis" format too. I'm currently reading your book on customer acquisition - if it works I look forward to attending a seminar one day! Thanks.

[@JamesSinclairEntrepreneur]

Great to hear!

[@stevewhite5395]

Great Video thanks James!

[@melike1984]

Just to let you know James that i really enjoy your channel having only just discovered it, great tips and advice thanks.

[@JamesSinclairEntrepreneur]

Glad to hear it! Thanks for the comment.

[@ReActiv8R]

Thanks James, good info!

[@hakankaya]

Lots of gold nuggets in this video. Thanks James,

[@mirandawalsh1143]

Thank you for your great content, it is always educational and entertaining. I would add in some minor points about tracking your competition and the marketplace itself, looking to keep at the edge of digital marketing, and building in a culture of staff perks and rewards. I think you cover these points in other content. Thanks again.

[@wild4fp]

Toys r us was expensive. Hence the quietness in the store. There was probably Age UK charity store selling the same toy £25 toy for 50p

[@JayTG123]

Very interesting to hear about toys r us. So much potential and you explained it very well. Hopefully it makes a come back.

[@brunosmith6925]

ToysRus may come back - or at least try to... the challenge is that kids seldom play with toys - unless they are (usually expensive) gadgets that tie in with other technologies - like the kids' phones. Personally, I don't think there is a viable business model for something akin to ToysRus - certainly not in the traditional retail model.

[@Church_Of_Kloppism]

​@brunosmith6925 yeah exactly that toys r us has still been operating in India even when it closed down in the UK and USA

[@SM-od2jh]

Thanks for your energy

[@OilBaron100]

Just found your channel recently James and I love your content. How did you start your first business? Have you done a video on that yet?

[@JamesSinclairEntrepreneur]

Yes I have…. There’s lots on the channel.

[@arteidiomasmalintzi]

Really great videos with high value. Background informations and really good knowledges about different businesses and strategies to increase my own business. Great stuff! Keep going! Thanks and cheers from Mexico.

[@nicke6394]

In property terms, sadly private equity will sell any freeholds and take the cash leaving a business highly geared. They’re never in it for the long term!

[@raphaelklijn6358]

These videos really sharpen my mind.

[@morgo5000]

Tons of gems in this

[@Oakdogg]

I recently discovered the channel and just find it really interesting.

[@JamesSinclairEntrepreneur]

Very kind of you!

[@easy4x4]

Some great classic ideas. I'd change the title to Fail .... and also Succeed.

[@rami270984]

Great content. Thanks

[@dannyholder1359]

As always an interesting and informative video with very professional presentation. Thank you.

[@JamesSinclairEntrepreneur]

Glad you enjoyed it!

[@figurehousedesignagency631]

I have a feeling perhaps James Sinclair himself has bought back Toys R Us!....am I right? haha

[@clubtokyo_jeans]

Good job 👍 thank you

[@edwardndalo]

Well explained sir.

[@CastlewoodStudios]

Speaking of businesses investing in their property, do you think that a CEO of a publicly traded company is motivated by different things than a privately owned company? It seems to me that the owner of a private company is more about building for the long term rather than focusing on the short term idea of increasing value for the stock holder.

[@JamesSinclairEntrepreneur]

I think you can never be too broad in assessments. I will say this though….. Private companies usually have the captain steering for a lifetime; so will naturally think longer term.

[@TAS_CNX]

Fantastic content as always James! I really appreciate you putting out these videos which are so packed with value and presented in such a positive and passionate way.

[@JamesSinclairEntrepreneur]

Thanks so much; glad you like them

[@derekbarnes370]

You talk alot of sense young man

[@JamesSinclairEntrepreneur]

Thanks!

[@flavorsofparis753]

I didn't know what "naff" meant. I had to look it up.

[@redcherryit]

I can't believe Blockbuster refused to buy Netflix during the early 2000's and (more or less) laughed them out of the boardroom - what's that saying? He who laughs last laughs longest!

[@SteveSpendsaPenny]

Just thinking, does Marsh Farm have some branded characters? Could you create some then you could create merchandise with their images on to sell. Soft toys, T-shirts, whatever else. Then they could be sold at your play centres as well. You’re a smarter business man that me I’m sure so it might something you’ve considered but just thought it was worth mentioning. I’m happy to take a cut of any sales if it works 😂

[@kknn523]

VW has superior engineering capability(best or tied for best economy car maker), strategic capability, and marketing capability, and other superior capabilities. Capability is probably 60% of business. 20% is strategy. 20% is implementation. If you fail in one of those(capability, strategy, implementation), then you would inevitably fail against above average competitors.

[@leemoffat159]

superb content 🔥

[@JamesSinclairEntrepreneur]

Cheers!

[@timklein185]

I think that Sears took owning property too far. Huge stores that they couldn't support or unload. It will be interesting to see how it plays out in big cities as commercial space stays empty.

[@james1b14]

Excellent…..that is all

[@JamesSinclairEntrepreneur]

Thank you Sir!

[@Butlinsgvn6]

You’re a brilliant communicator. Thought about writing a book?

[@helicoilpro3389]

Right at the end you built your funnel...nothing that pays like a subscription business

[@peanutbutterisfu]

2:55 The Toys r Us that closed a couple years ago near me costs 45,000 bucks a month that’s rent with taxes when you rent commercial properties like that they are triple net leases which basically means you are financially responsible for everything on the property all repairs, maintenance, property taxes you basically have the responsibilities of owning but you don’t own it. Now I don’t live in some massive city just ur average city so the 45k per month will be much higher in areas but if you use that number for the average and back 6 years ago ish they had 739 store just in America and the amount per year spent on rent for all the American stores is 399 million yeah just one year and don’t forget they have the same financial responsibility as if they owned it because of the lease so it makes zero sense to rent that many stores. I worked for a chain of 30 auto repair shops it was owned by one man and he owned all 30 shops. One day he said screw it he closed the business down and has been renting all the shops for years now which many are leased by big chain stores like Monroe and ur talking 10,000 bucks a month in rent. The reason he did this is obvious ur talking hundreds of thousands in rent every month definitely more then he was making running the businesses.

[@saginata]

A lot of businesses die because they are killed off by people who don't have the company's wellbeing in mind. Assets are sold off and debt is taken on to fund stock buybacks and dividends. Lots of people make tons of money, business dies, employees and credtors get the shaft.

[@paulwilson7581]

Great info, and you’re very successful, you know your stuff…….thank you for sharing but, having met you, your ego gets the better of you.

[@nextgenuser]

How about your take on evolving a business with the new generation trends

[@moorabinda]

Actually Blockbuster was close to beating Netflix until Carl Icahn came along, had a dummy spit, put in the wrong manager who starved it of cash. Epic management fail nonetheless but not due to Netflix.

[@djtreyboogie1476]

Hello, James I was wondering what you think about Recording Studios as a profitable business. I like your videos very insightful keep up the good work!

[@VincentRE79]

I have been involved in a music business, would be careful here as most musicians have very little money. They always go for the cheapest option.

[@brunosmith6925]

The days of recorded artists making billions from record sales are over. Most (successful) music artists make their money from live gigs. Also... 99% of aspiring musicians have no money, and what little they do have they invest in recording apps that run on a PC. These apps can be quite good. Top-notch recording equipment is VERY expensive, and unless you have the good stuff, no professional musician will use you.

[@VincentRE79]

@@brunosmith6925 Agree I still own a music business. I receive 20 plus page royalty statements that brings me in an income of £3.50 to share with the musicians.

[@Church_Of_Kloppism]

Blockbuster were offered the opportunity to buy "Love film" for less then a million lol

[@rabbishekelstein]

owning the property is the best part of business

[@Dr-Shlomo-Cohen]

What are your thoughts on becoming a local distributor for a manufacturer?

[@paulfri1569]

Ego by the boss should be number 1...

[@robbie609]

asset management!

[@michaelheyes1023]

worth doing seminars up north? selfish request as I hate driving 😂😂

[@_Half-A-Beas.T333]

Kudos for saying, "I do the dew". Demerits for saying, "lubricant for business"

[@danieltravor]

@JamesSinclair, am just here wondering why go to college when I have your KZbin channel? 🤔

[@FredSimpson]

the day care is not the same as fun parks so customers are by that very fact not the same as not all customers who go to a fun park would need to use a child care. yet most child care customers could we overlap in to the fun park.. there for the cash should go to ads for the fun park more than child care..

[@marcussmith3830]

❤

[@TwitterasX]

Genius

[@shobhitsadwal756]

Hi james, I am on a seed stage of my business and these videos are really helping me out. Just one thing, starting has been a little rough for me (running to cash problems) but my vision is too big. Do you recommend talking to investors at an early stage, if yes then what are the things to look out for ?

[@Gixxk4]

James has just done a podcast with someone wanting an investor. Definitely recommend a listen

[@VincentRE79]

Be careful about taking on a business partner unless you have to, it normally does not work out in the long term.

[@shobhitsadwal756]

@@Gixxk4 i will look into that, thanks.

[@shobhitsadwal756]

@@VincentRE79 thanks, I will keep that in check.

[@VincentRE79]

@@shobhitsadwal756 Partners nearly always fall out, only take one if you really have to.

[@sarahfranco6802]

3:00, 5:50, 7:10, 8:50, 11:15, 13:20, 16:00

[@mustafatvs]

Is business best way to become rich? Also can owning equity in businesses also make u wealthy?

[@brunosmith6925]

Investing in the right companies can make one very wealthy - look at Warren Buffet, Ron Baron, and others like them. The key is knowing what is a good business and what isn't. Sometimes, this isn't obvious, and before investing do your own research - LOTS of it. Steer clear of "advisors". Also - NEVER ask an accountant for investment advice - or a bank... Accountants and banks are the least-reliable advisors, and are responsible for more business failures than successes. In 2019, I bought $14,000 worth of shares in Tesla (ticker TSLA). I have been following Tesla since 2008, which had their IPO in 2010. It took me 9 years of watching this company before I felt it was on a cusp of viability and profitability. My $14,000 investment is worth today (16 Aug 2023). $220,000. So in just 5 years, my stock in Tesla has grown 15 times my original investment. I am not offering financial advice... Tesla shares are on a downward trend right now... but in my case, I invested at a good point - and held on.

[@Goldbaboon]

what are R & D?

[@JamesSinclairEntrepreneur]

Research and development

[@jsnmad]

Rolls Royce and Bentley also run losses like Lambo

[@flex1661]

What business would you invest today with a 100k budget?

[@jamessmith4455]

You made me want to buy toysrus and turn it all around.

[@lewis72]

4:47 You bought Toys R Us ? 😀

[@darrenstango9376]

im going to say when they become stagenent and dont move forward

[@droidgracie4121]

Another important lesson from Disney: Don’t play politics and virtue signalling or you will lose at least half of your loyal customers.

[@walkingmanvideo9455]

Lambo failed when they mass produced aventador and their cringy SUV. The SUV cheapened the brand.

[@sophiemoconnell]

Great point. Ferrari are fiercely protective over their brand in a way Lambo isn't.

[@walkingmanvideo9455]

@@sophiemoconnell People purchase iconic brands for exclusivity. When the average joe is buying an aventador, it becomes ............cheap and un-appealing.

[@vlachyna]

Padáte stále hlouběji... To , že někomu obtěžujete život, tím nic neřídíte... Jenom padáte hlouběji :D A vykrmit chudáka Frantu vašema legendama je jenom další dílek si skládanky vašeho upadání do větší hloubky... Padáte stále hlouběji.... Stále hlouběji....

[@EM3Finance]

The reason profitable businesses fail: they stop being profitable

[@brunosmith6925]

So true... another faultless truth is that the prime cause of divorce is marriage.

[@ivansmith4242]

Key take away: befriend a billionaire.

[@davidwestwood351]

Are you buying Toys R Us? I can read between the lines.

[@bomberbolton]

Say eco system one more god damn time

[@healthguy79]

Go woke go broke

[@brunosmith6925]

Agree totally...

[@crocopie]

I wonder how Playboy and Penthouse would stay relevant in the age of Pornhub and Onlyfans? What I had in mind are auction houses. These brands go beyond pornography but also a particular lifestyle. Playboy has made mainstream writers and journalists famous. To compete against Sotheby's, why not auction vintage adult materials that go beyond magazines (a hard sell nowadays)?

[@sirrodneyffing1]

Never mind all that "profit" 🥱 stuff James, when are you going to go for 'B Corp' Certification? so your business can really take off, instead of being the, so last week, no hoper profit centers they are? Never mind all that creating jobs n stuff, what are you doing to reduce carbon emissions in China? You need to get with it James!😉 (Great video again mate, thanks)

[@fit6673]

Explain how his enterprises create carbon emissions in China please?

[@sirrodneyffing1]

@@fit6673 It was a joke. Check out what 'B Corp' is.

[@freddie_mvp]

@@fit6673it’s satire dude