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I turned down £200k and built a spellbinding brand

Phil Pinder shares his top tips on how he successfully grew his businesses, The Hole in Wand and The Potions Cauldron, without the funding or mentorship of a Dragon.

Phil Pinder and Ben Fry have harnessed the excitement for everything magical by bringing their ventures to life.

Not only do they have The Potions Cauldron, a place where enthusiasts can submerge themselves in a mystical world and relish in a captivating concoction or 2, but they also run wizard themed mini-golf venues, The Hole in Wand.

In June 2023, driven by ambitions of expansion, they presented their business to Dragon’s Den. Despite being offered one of the largest sums to date of £200,000 (CA$344,850), the duo opted to decline parting with a third of their company and refused Peter Jones himself.

Nevertheless, they’ve since been tirelessly occupied, introducing new wizarding golf franchises and establishing stores throughout the UK. With their enchanted beverages now stocking the shelves of major retail outlets like Hamleys, HMV, and Center Parcs.

In this episode, find out how the pair financed their growth and confidently paved their own path to success without the guidance of a Dragon and transformed their concept into a magical destination business.

Here’s his unfiltered advice below:

Soft drinks manufacturer or an attractions business?

Bex Burn-Callander:

Welcome to the show, Phil.

Phil Pinder:

Thank you for having me on. Really looking forward to it.

Bex Burn-Callander:

And describe to me what’s behind you. I can see some twinkling bottles, and exciting products that just beg to be…

Phil Pinder:

We’re famed for our magical, drinkable potions. This is one here, so you turn it upside down, you give it 3 gentle rotations, and then the magic comes to life inside. This is our first one, which was Tears of a Wizard. But yeah, we’ve got 7 potions in the range.

Bex Burn-Callander:

Is that glitter? Is that? What is that?

Phil Pinder:

That’s a magical shimmer.

Bex Burn-Callander:

You couldn’t possibly tell me what it is.

Phil Pinder:

It’s all food-based ingredients, and the magic is in how we make them really. So yeah, incredibly difficult product to make.

A bit like how Amazon always say they’re not a retailer, they’re a software company. We’re not an attractions business or a retail business, we’re actually a soft drink manufacturer, and all the other bits add on, and everything ties back to the soft drinks that we make.

Bex Burn-Callander:

Oh, that’s really interesting. I’m going to ask you more about that because that journey into soft drinks had a lot of twists and turns that I want to hear about.

Bex Burn-Callander:

But I want to go back to, so I think originally you started with, was it The Hole In Wand? Well, I know that originally there was a premises that was like a failing The Hole In Wall business.

Phil Pinder:

That’s right. The Potions Cauldron was the first premise we took on. It had been my shop for 10 years.

Prior to doing this, I used to sell cufflinks and shirts, and bits like that, so completely different. And we were in the Shambles, which has been described by Visit England as the original Diagon Alley.

It’s got the overlapping buildings where they meet, you can shake hands upstairs and the windows. Our shop is at the narrowest pinch point of the street, where it’s probably about two and a half, three metres wide. So a really narrow road.

It’s got pavements and a road course as well, so it feels even narrower when you stood in the middle of it.

And it always seemed like it was a film set; it looks beautiful, and you wouldn’t build that today.

So me and my current business partner, Ben, we were wandering up the street one evening, and we were at the bottom, and I said, “I’m going to be giving up my shop, going to take it online as a business.”

And he said, “You’ve got to keep the shop. We’ve got to do something with this shop.”

And the time it took us to walk up, which is a very small street, we’d come up with the idea that, “Let’s create a wizard business where people feel like they’re in one of the films where wizardry is a concept without saying the word.”

And basically, that’s what we wanted to do, make people feel like they were in a movie, not buying merchandise from a movie. I quickly put Ben off the idea of just selling merch because the margins are really low and you’ve got to do lots of it.

And as I simply put it, if 1 item gets nicked [stolen], you’ve got to sell 2 more just to break even. So you’re much more in charge of your own destiny if you can create the products, create the ambience, and everything is of your making.

So that’s what we set out to do in October 2018.

We started with magical drinks that were slushies, and basically, we had little test tubes, I’ve got some of the more poisonous ones behind me, but we’ve got our own test filling machine now, and we used to fill them all by hand, which was fun.

I think there’s a video of me in the early days with this foot pedal machine pressing it and not being very good at filling things, and you accidentally press it twice and you get covered in syrup and things like that. So we had lots of mishaps.

But when we started, the kids would basically pour the syrup into the slushie and make their own magic potion. It was as simple as that, really.

And then we got people starting to ask us for takeaway drinks. So I came up with this really naive idea that, “Well, let’s just get someone else’s bottles and stick our own labels on.”

And I’d done kind of product manufacture with cufflinks and shirts, and it was much easier in that kind of scope of products. And as it turned out with soft drinks, we did actually find somebody who was up for it.

It was a brand at the time, that they’re still around, but they’ve gone into cans now, and they had some glass bottles, really cool flavours. Raspberry lemonade, I think I’ve got some of the early, early stuff down here. Look, so this is the original potions.

This is our Serpents Venom. It’s going off a little bit now, but it’s a real lemonade with cloud in the bottom, and we basically just started white labelling those.

But as I say, they were moving out of glass, and we were selling them really well. We bought, I think initially, 1,000 of each bottle, 4 flavours.

We sold them within about 6 weeks, and we went back and said, “Oh, we need some more.”

And they were like, “We’re not doing any more glass for a few months.”

And we were like, “Oh.” So I said, “Let’s just make our own. It can’t be that hard.”

And that’s when it got kind of crazy…

Bex Burn-Callander:

Famous last words.

Phil Pinder:

Yeah, famous last words.

And we do often joke and call each other Rodney and Del Boy [British TV show characters], the kind of antics from that.

It was kind of one of those moments where, looking back, I’m glad we did it because we now have an amazing product and an amazing business from it.

But it’s not something we should have gone into lightly or naively, but I think by doing so, and sometimes by making mistakes in business, you can actually create an amazing product.

Because had we been soft drink makers, we’d have listened to everybody telling us that you can’t put shimmer in soft drinks because the biggest issue is it gets stuck in the production lines.

You’ve then got a polluted production line, and you have all these issues. So nobody wants to touch the products, and we eventually found somebody who would do small-scale bottling and would do it handmade.

The luxury for us was that we sort of created a whole new sector that it’s a giftable soft drink.

So it’s not just a soft drink, where at the time the price limit in the shops was probably about £1.80 [CA$3.11] for a soft drink, being of the Red Bull variety, and that was sort of the ceiling on a soft drink.

I think more recently we’ve had Calypso and Prime coming into the sector, in glass and fancy bottles, where they managed to push it up to a much higher level.

But actually, at the time, we were breaking the margin by charging £3 [CA$5.18] a bottle, but it was because it wasn’t bought as a soft drink, it was bought as a gift, and it was bought to put that wizardry and that magic back into people’s homes as a takeaway present.

And the good thing with it, and I think the 2 things we’ve done really well, is 1, it’s a sustainable gift. It’s not more plastic tat to fill your house with that your kids are going to get bored with in a few months.

It’s a sustainable drink, it’s in a fully glass, fully recyclable bottle. Glass can be recycled forever, unlike plastic, which can only be recycled 3 or 4 times.

So the myth that plastic can be recycled endlessly is a nonsense and something that a lot of consumers have to wake up to, sadly.

But not only that, we’ve also created a product that is a luxury product, and you can buy it time and time again because it is consumable.

So if you’re buying somebody a gift and you don’t know what Harry Potter toys they’ve got, you might not buy them something like that because you might be worried, the grandparent might be worried, that they’ve already got that toy.

But with this, if they’ve had it before, it doesn’t matter because they’ll still enjoy it and still love it.

So that’s the kind of market we’ve broken in to, and I think that’s been our success as we’ve rolled the products out.

Your business is flying and then a global pandemic hits…

Bex Burn-Callander:

So you started this business in 2018, so when did your own-made, own-manufactured soft drinks hit the market, and how many of them have you sold?

Phil Pinder:

So basically, we’d sold out the white label ones I showed you before. We’d sold out of those at the end of 2018. We had a good Christmas with those, and we wanted more for January.

So between January and April, we started planning, and that was our number one priority was to find and source new bottles. So they launched, I think it was the second half of the Easter holidays, which was around mid-April 2019.

As we always do when we do something new for the first time, we expected to have queues down the street, and we expected it to sell out within a week, so lots of naivety.

But I think that’s the confidence that pushes your head in business is that you know it’s a good idea, but you just got to get the message out there. And just because you know it’s a good idea doesn’t mean everyone else does because they haven’t yet discovered it.

But we pushed ahead, we had a really good 2019, we were doubling our takings as we got to October on the previous year. And then we entered into 2020, and we can all remember what happened that year.

But obviously, it all started in York [UK], where we’re from. Then COVID had actually hit York at the beginning of March, 3 weeks before the national lockdown, the first case was discovered in a hotel here.

And there were lots of retailers getting worried at the time. I was the chair of the retail forum in the city, so lots of people were starting to mention it to me, and we were all a bit, “I’m sure it’ll be fine, they’ll put some restrictions in place, but I’m sure it’ll be fine.”

Masks started making an appearance, and there was all this kind of nervousness.

And then, I think, the first 14 days of March, we’d already done one and a half times the previous March turnover. So we were flying. We were heading into what was definitely going to be our best ever year. January and February, I think that first 9 weeks of trading, we’d done our first quarter of the previous year.

So we were really, really flying. And then COVID hit.

And we didn’t have a website. We tried to sell them online, but being glass bottles, they broke. The other limit was there was 4 bottles, and they weighed exactly 2.1 kg when you packaged them up.

Now for Royal Mail for small parcels, if you’re just posting ad hoc, the weight limit is 2kg, so we’d gone over that.

Bex Burn-Callander:

Oh, no.

Phil Pinder:

We were like, “Ah.”

So a few would slip through, but then some customers were getting that big red sticker on the front of their parcel saying, “You must pay a charge.”

And then COVID hit, and we didn’t know what to do really. It was, thankfully, I think about a week after COVID, we got told there was going to be a furlough option.

So we furloughed our staff, we closed the shop, and moved forward really and we did actually launch a website.

We met somebody from Royal Mail who was really good at bringing us on board and explaining that if you have an account, the 2kg doesn’t matter, they just bill you pro rata.

So we launched a website. And we actually had a new drink launching in March that we’d already spent all the production money on.

So we launched that on Facebook Live, and it went really well, and we actually managed to sell about 1,000 bottles of that online, even though we had no shop or no physical outlet, and we were doing deliveries around York.

And people were really supportive of small businesses at that time, which I think was really good. And it was that real community spirit that happened during lockdown that helped a lot of small businesses through.

But we also brought forward ideas. We always wanted to do attractions, and to make this concept of making people feel like they were in a film and that there were actual wizards, we wanted to take it even further.

One of the ideas we’d come up with was to do a wizard themed mini golf. Every mini-golf you do is either dinosaurs or pirates. I don’t know why. And you’re laughing because you know it’s true.

And everywhere you go, that’s always been the case. And that seems to be the family-friendly version of mini golf, it’s dinosaurs or pirates.

And often the gift shop or the kind of shop attached to it doesn’t even match the theme of the golf, and none of it makes sense.

But we wanted to do it, where it was totally immersive, it was actor-led, and that’s when we came up with the concept.

So basically, we signed more premises in lockdown, did another deal on a premises, launched a crowdfunder, which is something I definitely would not recommend for people to do.

Is launching on Facebook Live an established route?

Bex Burn-Callander:

Wait, wait, I’m going to stop you. I’ve got too many questions, and I’m going to forget them all if I don’t ask you now. Number 1 was you said you launched a product on Facebook Live.

I want to know, did you choose to do that on Facebook because that’s where your biggest community is? Because I’ve not heard of people doing launches on Facebook.

Maybe I’m just an old dinosaur, but is that like an established route to launch?

Phil Pinder:

I think it was simply because at the time we had about 2000, 3000 followers on Facebook.

Ben, who comes from the radio side, Ben used to work in local radio, and he’d done lots of Facebook lives and stuff, and he said, “Let’s just do it as a Facebook Live. We’ll say this is happening.”

And we basically did the advertise. We got the local radio station to help us by promoting it as well.

And we did it in the back room of the shop, which we’d already decorated. So the back room of the shop, at the time, was very much a selfie space. That was the whole concept of it, it was experience-led.

And the idea was you’d buy a potion, you’d go in the back room, you’d take a couple of selfies, you’d put them on social media, and our customers would market our products.

But obviously, we were quite nervous during lockdown of this back room because we were like the entrance to the backroom.

Bex Burn-Callander:

There’s no ventilation.

Phil Pinder:

Well, the entrance was two foot wide, and people had to come in and out of this long corridor through a 13th-century building.

And we were like, “This is going to be tough work after lockdown.”

We didn’t even know about restrictions and 6 people and all these rules that were coming in.

So we were like, “We’re going to have to think what we’re going to do with this room.”

So we actually launched an experience where we sat people down, we sold them a drink, I think we charged them £1 [CA$1.7] more, but an actor led an experience.

So we had to come up with a booking system and a new website, and all these things were done in lockdown, really.

And thankfully, our web guy was also short of work during lockdown. So he was very helpful, he built our own custom booking system that we actually used for the golf as well.

Ask landlords to help fund your business

Bex Burn-Callander:

And wait, how did you fund all this? Because people would be listening, thinking you were going to shut down your previous business because it wasn’t working.

So presumably, that wasn’t making a huge amount of money.

Not only is it an enormous overhead; usually you expect to bring out a soft drink, but then you’re also investing in premises during lockdown. Where is the money coming from? How did you fund all this?

Phil Pinder:

Beg, borrowed and stealed.

Up until this point, we’d all self-finance, we’d use credit cards, we’d used everything available to us to fund.

And as you say, launching a soft drink just to get to that stage, the development of the flavour, because you own the whole recipe when you make a soft drink, and it costs easily £20,000-£30,000 [CA$34,501-51,752] just to do the testing.

And we didn’t just launch 1, we launched 4 soft drinks.

So yeah, we were quite heavy in.

Luckily, you got R&D tax credits, so you can claim lots of that back.

So we also had a really, really helpful accountant, Andy, who is still with us to this day. And he really helped us with claiming stuff back earlier and saying, “Well, let’s just tell them we need to do another VAT return because we spent a lot of money on VATable stuff we can claim back.”

So basically, it was thinking on our feet and trying to find new opportunities.

But the other opportunity, and one that I would say to new small businesses, once you’ve got a good idea, landlords are really helpful as well.

Landlords will actually give you some cash if you ask. The big brands know this.

I mean, to give you an example, I was recently up somewhere in the North East, and it was a former Marks & Spencers, it was going to be a B&M, and the landlord, who was the local council, were paying for the entire refurbishment of the B&M store to B&M specs.

Bex Burn-Callander:

Just so it wouldn’t be empty.

Phil Pinder:

Just so they didn’t have an empty shop on their high street. And the big guys are used to this.

So you can ask landlords for contributions towards fit-out costs. You can ask them for help, you can give them a list of what you want them to do to the building before you take it on.

And actually, at that time, the kind of gravitas shifted massively from landlords having lots of power to them being really worried about what the future was going to be.

A lot of the big brands didn’t get any help during COVID. All the ones that were already in debt were going to really struggle after COVID.

And we actually took premises from Patisserie Valerie, who were already in trouble pre-COVID. The landlord in that situation had already taken legal action against Patisserie Valerie and the premises we took because they hadn’t paid the rent for the previous quarter.

So we took their building from them during lockdown.

Basically, the staff had locked it up, expecting to go back post lockdown, but they didn’t because we got the keys, the landlord had to change the locks, and we’d signed the lease in that interim. So that was huge.

And to be fair, we were heading towards Christmas, we expected to open The Hole In Wand probably in the latter half of the year.

We did the crowdfunder to raise some money, that raised probably about four, I think, £30,000-£40,000 [CA$51,752-69,005].

We took a COVID loan to help with recovery and we ticked the box where we said, “We’ll use this to survive.” By survive, we meant grow.

But we took the full £50,000 [CA$86,257] available to us and we used that to fit out The Hole In Wand and triple our staffing, but the problem was that they decided that attractions could not reopen.

So we had this extra premises for Christmas 2020, and we took the decision that we needed to do something with it.

In hindsight, this was our best ever decision during COVID and one that probably saved the business. And that was, we opened it as a hot chocolate cafe.

So we do a hot chocolate frog, as we call it, which is a hot chocolate with a chocolate frog on top. And so we launched a hot chocolate cafe.

We did it Willy Wonka style, we had a menu just of hot chocolate. There was old York themes, there was a Kit Kat one etc.

And we did it for the 6 weeks of Christmas. And it wasn’t as successful as it could have been, but it brought in much-needed cash flow, that basically saved the business.

And the other thing it did was because we’d opened those premises as a cafe, we then qualified for the next grants that were sent to premises.

Bex Burn-Callander:

Oh, wow.

Phil Pinder:

Had we not done that, the building would’ve been empty, and we wouldn’t have gotten the next grant.

Bex Burn-Callander:

It’s mad, isn’t it? You just think that you kind of line yourself up. You can either line yourself up to fail or you can somehow manage to shift all the pieces on the board so that you are actually going in a positive direction.

If your business can startup and survive during a recession, you’re onto a winner

Bex Burn-Callander:

And your point about investing during COVID and being bold and speaking to landlords and asking them to fund, refit. I mean, it always comes back to that saying, “Be greedy when others are fearful and fearful when others are greedy.”

It always seems to be the time to invest is when no one else is.

Phil Pinder:

You’re spot on there, Bex, because I’ve read a lot of, as you probably have as well, entrepreneurs, autobiographies.

And Duncan Bannatyne, is one that stands out, he was the same. He’d done a thing where he took on a huge risk during the recession, because actually that’s the time to invest, because if you can make it during a recession, when the good times come, you are going to be good. You’re going to have a great business.

And that was always the thing that if we can actually turn a profit during this, what’s it going to be like afterwards? It was amazing that we managed to get the cash flow, which then propelled it forward.

We expected to open in February, and I think it was eventually May 17 2021 when hospitality businesses that were attractions were actually allowed to open.

So it was a long way down the road from when we’d taken on the premises in June 2019, and we didn’t actually open for almost a year. The building was fitted out.

And the other great thing we did for cash flow was we launched a business where people pay you before they come.

It hadn’t even dawned on us, but as soon as we put tickets on sale in 2021, we sold out for the first 3 months. People were that desperate to come back out and do stuff.

Bex Burn-Callander:

To get out! Yes.

Phil Pinder:

So we were sold out for pretty much the full year after COVID, and we just rode that wave.

But it was brilliant for cash flow because people are paying us in advance. And to this day, we still do very well with pre-bookings at least 1 to 2 weeks ahead.

And it’s an enormous relief on your cash flow if you can find a business model where people will pay you for stuff before you’ve even given them the service.

Your first idea won’t always be your best idea, so don’t be afraid to pivot

Bex Burn-Callander:

Okay, let me just distil some of this for our listeners. I feel like we’ve had so much diamond advice in the last 5 minutes.

So firstly would be, as you’ve just said, to try and get cash flow in first. So either with pre-bookings or I think some people use subscription models, but a way to get the cash in first, because then you know can forecast and that you’ve got money to run the business.

The second point was about in downturns, recessions, times when other businesses are being cautious and maybe not spending. try and invest and find a business that works in the dark times because you will definitely flourish when the recession ends.

And then you were saying about pivoting, and I love this, the fact that if you have an idea that can’t possibly work right now or that you need to hit pause on, you just have to come up with something else to fill that time to bring in money.

And then you can always come back to that idea. And we had another guest, Lynne Franks, OBE, say exactly the same thing at the start of the season.

So it feels like that’s just really timely that people need to remember, don’t give up, just think of something else that will just bring in some cash flow, and then you can go on with your business.

Phil Pinder:

Your first idea is not always your best idea. And that is my kind of pinnacle advice I now give because my first idea was cufflinks.

And it was a good business, as the dragons would say, “It was a lifestyle business.” It was a good lifestyle, it was easy to do, it was easy to run.

But it was never going to be a million-dollar business, and it was never going to enable me to step above a level—I actually used to earn more money when I used to work in the city. So I probably should have parted with that company sooner.

And I think that’s the advice I’d give to others is that your first idea is not always your best idea. Don’t be afraid to step away and start again with something new.

Because actually people will go, “Oh, that’s a brilliant little business,” and they see you ticking along and think you’re doing fine. And it wasn’t easy putting to sleep, for want of a better word, a business that was actually ticking over and doing okay and making a leap.

And I did that because, at the time, we were employing staff into this business to run the shop, and it would frustrate me.

So I already had staff in my other business to work weekends. So I came across and worked on a Saturday, and it was very obvious to me we had the wrong staff, so we’d gone for staff that were very retail-led.

And to this day, it’s not about the retail in our premises, it’s all about the story and it’s all about the magic and that you demonstrate the products, and it’s all about engagement.

So for us, we don’t just let you walk in, every customer is engaged with as they walk in or as we try to. There’s some stories coming there later about how that’s become a problem, but that engagement is great for 2 things.

One thing I would say to a simple business, even if you’re selling clothes, engage with every customer because shoplifters thrive off not being engaged with. If you engage with a customer, shoplifting will completely disappear from your shop because shoplifters walk in there and want to not be seen.

And the thing is, don’t try and think of things that are open-ended, “Can I help you?”

No, that doesn’t work because everybody, especially British people, will say no.

What you need to say is, “Have you been in before?”

And then, first of all, if they’ve been before, show them what’s new, if they haven’t been before, show them your signature products and start with that.

And then, basically, you’ve got your own little script, and that’s retail in a nutshell. You need a script that sells your shop, and then repeat, mirror, copy, repeat.

Can you eradicate shoplifting with a good and consistent customer engagement strategy?

Bex Burn-Callander:

That point about shoplifting. Sorry to stop you there, but it’s a real scourge on retail at the moment.

When you look at the stats, the amount that retailers are losing right now, and I know there’s a cost of living crisis, but it’s never been this bad.

So is that something that you have to be really careful of, or have you eradicated it with this customer engagement strategy?

Phil Pinder:

Yeah, I think we pretty much have. Obviously, we’re going to always get the occasional bottle that gets stolen, but nothing like the scale of the ones that are suffering the most. Which are the shops where they’ve put in checkouts where you don’t even meet a customer.

You can go into a Tesco Metro or a Co-Op, or one of these little kind of convenience stores, and you don’t even see a member of staff. It’s no wonder shoplifting is going to be on the increase.

So I think a lot of shops have got themselves to blame, they’ve seen the future that we don’t need staff, you do need staff, you need staff to engage. And actually, we all enjoy that kind of engagement.

And I think Booths have recently taken the bold step to put staff back into their stores and take out the self-checkouts.

And I think service-led businesses will realize that that is actually the way to go. People want engagement, and that’s clearly the signs from post-COVID recovery that people are moving away from spending online.

Yes, online is always going to be massive, and it’s always going to be convenient, but it’s always going to be price-led. People will quickly search for the cheapest of that product available elsewhere.

Top tip: Amazon is not the cheapest anymore.

Amazon already now have the market share. You can find things a hell of a lot cheaper than shopping with the biggest retailer out there now learned that they can put their prices up, they’ve got the audience.

Bex Burn-Callander:

And people don’t notice.

Phil Pinder:

Yeah. And things at Amazon are actually really expensive now.

And that’s because they’ve built a market that is convenienced into this.

So I think as that happens, more and more people will start to switch back to the high street, which is actually a really cheap place to shop as well.

But also it’s a pleasurable place to shop. Who doesn’t enjoy going into a shop browsing? You find things you might not expect to.

We’ve all got horror stories of going into shops that are not well run and some of the bigger chains where they don’t have your sizes, that kind of thing.

But shops done well will always beat the internet, in my opinion.

Bex Burn-Callander:

And we’ll come back to that because I’m interested about your kind of digital growth as well, that was kind of the cornerstone of your response during COVID.

How Sunday trading laws could effect your business

Bex Burn-Callander:

But I just want to make it quite clear to our listeners that because you’re based in York, maybe not everyone knows this, but York is a massive tourist hub.

So when you’re based on the Shambles, if you go down the Shambles on a Saturday, you can barely move. I mean, sometimes it’s literally like it’s carnival in London, but on every weekend.

I think it’s something like 9 or 10 million tourists come to York every year.

So do you feel like a business like yours could only work in a high-footfall, high-tourist city, or is that kind of the niche that works for you?

Phil Pinder:

In terms of does only high footfall work? I think high footfall only works anywhere, and I think that’s the reason why some high streets are really starting to suffer.

Some shops will always thrive, and they’re always going to do well with just a handful of customers. Things we need regularly, consumable products, convenience stores can always work almost anywhere.

But at the same time, in terms of our kind of products, you want to be in areas where people are coming that are not just tourists but locals.

And I think the average local comes into York now less than once a month, so that’s changed massively, and that’s the fault of people shopping online, shopping in supermarkets.

But shopping is now a pleasure, and it’s not a chore that people do every Saturday. So Saturdays are still the busiest day of the week, but that’s probably got more to do with the fact that we have Sunday trading laws still.

So people think they’re always, I mean, I always say this about trade shows and things and events like that is, “Why they always cut the last hour off on the last day because people don’t buy a ticket for the last day because they think they’re getting less value for money?”

Because they can only go 10am ‘til 5pm, most people leave by 2pm, but they see that last day, with same price ticket and they go, “Oh, I’m not coming on the last day. I get less value for money.”

And that’s why people come on a Saturday, not a Sunday. And I think that’s something that’ll probably need to change moving forward. I mean, it doesn’t affect us. We actually fall below the threshold.

Bex Burn-Callander:

I didn’t know there was a threshold, I should have known that. I didn’t realize.

Phil Pinder:

It’s a massive threshold. It’s something like 300 square metres or something random like that. But yeah, so small shops don’t actually qualify.

Bex Burn-Callander:

Sure.

Phil Pinder:

Under the old rules, it was if you sold consumable products, but then we had the situation where B&Q started selling oranges and apples on Saturdays so they could say they had consumable products and crazy things like that.

And bookshops were allowed to sell pornography, but they couldn’t sell the Bible and strange things like that.

So they changed the law, but they put a threshold in to help small businesses, but then the supermarkets have just switched.

Bex Burn-Callander:

You are a font of information.

Phil Pinder:

So this is why the supermarkets have switched to opening Tesco Metros because they fall below the threshold in size, they can open when they want on a Sunday.

So the legislation again has created Tesco Metro, which is a beast that’s changed our shopping habits. And this is where legislation needs to keep up with the consumer because, actually, if legislation doesn’t keep up, like business rates, which totally do not work anymore, then actually behaviour will change to favour some businesses over others.

And actually, Sunday trading law is one example of that because the supermarkets have gone, “Well, if we can’t open our big shops, we’ll build some small shops. We can open those instead.”

Bex Burn-Callander:

And we’ll charge consumers loads more for the product in our small shops.

If you’re not an admin person, you might want to avoid the crowdfunding route

Bex Burn-Callander:

We touched on when you did a crowdfunding round that didn’t go terribly well.

And you were also on Dragon’s Den.

So, can you talk to me about fundraising? So in the early days, you mentioned credit cards, beg, borrow, steal if you have to get your business financed, but you must have hit a point where you needed to get a bit more money in.

So talk to me then about what happened next and who you got to finance the business?

Phil Pinder:

So we looked at crowdfunding, and we were launching an experience. So the obvious thing for us was to get people signed up to a family package. So a £60 [CA$103] family package, we’ll give you a box of drinks as well and things like this.

And the problem with it, I said at the beginning, was it’s the bureaucracy of it. So I think we got about 900 people signed up, ranging in donations from £6 to £60 [CA$10-103], but then it’s all that bureaucracy, 1,000 people to manage orders is really hard work.

We still have people email us up until a few months ago. I mean, we could still have some in the future who knows that say, “Oh, I didn’t use my voucher from the crowdfunder.” And we’re like, “Okay.”

And you’ve got to kind of dig into the offer and find out what you did. We actually said there was no expiry on the vouchers and things like that. So it’s crazy.

And just simple things like missing things like that is really hard work, and obviously because the opening was delayed, we had to keep them updated.

So there is a lot of admin involved, and if you’re not an admin person, definitely avoid crowdfunding.

Bex Burn-Callander:

But how much did you raise through it? Was it valuable in terms of a short-term cash flow boost?

Phil Pinder:

Yeah, no, totally. There was no other options available to us. And we did raise probably about £30,000-£40,000 [CA$51,770-69,026] through it.

So for us at that time, it was the only way to source money. Would we do it again?

Not while retail and shops are able to operate normally, I wouldn’t because there are much simpler ways to get the similar kind of money.

Turning down Peter Jones’s largest ever personal offer of £200,000 (CA$344,850)

Bex Burn-Callander:

And then, how did you end up in the den?

Phil Pinder:

So yeah, the den, so we turned down Peter Jones’s largest ever personal offer. So he offered us £200,000 [CA$344,850] for our business.

We went on Dragon’s Den, as most people do, because you’re going on TV, it’s a good publicity opportunity, you’re not going to turn it down. And they didn’t approach us, apparently, they do approach some people. It seems to be one of those things.

And we’ve had this chat before Bex about the London bubble, so obviously, all the producers are down there, so they chat to people, but it is actually filmed up here in the North in Manchester.

So I’m a huge Dragon’s Den fan, I haven’t actually watched it since we’ve been on. I’ve got it all taped on my Skybox, and I’m like, I should go back to it, but it’s just so painful.

I’ve watched all the episodes up to ours, and then I haven’t even watched our episode. It’s like I can’t watch it again.

Bex Burn-Callander:

Oh, you didn’t have a screening party or something?

Phil Pinder:

No, no.

Bex Burn-Callander:

Everyone has a screening party for their episode.

Phil Pinder:

No, we were both very fearful of it.

Bex Burn-Callander:

But you got this enormous offer. Why would it be painful? You must be so proud.

Phil Pinder:

Well, it took 4 hours to film, and I have actually seen the edit of it because I’ve watched it on YouTube, just our cut. I haven’t watched the whole entire episode.

But it took 4 hours to film. You’ve got no glasses of water to hand, you are under hot studio lights, and you’re there in front of 5 entrepreneurs who properly grill you and insult you.

We started off and Peter Jones was actually was very insulting to us. He called us two idiots in white coats, and looking back on it and being a huge Dragons Den fan, I can clearly see it’s a tactic he played at the time in that series, the previous series, he’d lost out on a lot of deals.

He was always the investor in the den that got the most deals, but he’d lost out on deals because of other dragons being like, “Oh, this looks like a good deal, Peters maybe, right? Maybe we should make an offer.” And undercutting him.

And I think he realized that his new tactic would’ve to put the other dragons off. So he came in, he found a hole in our accounts, that we’d only made the day before, because we literally, from the whole process of emailing at the end of the last series to filming was about a month.

Bex Burn-Callander:

Oh, wow.

Phil Pinder:

The due diligence we had to print off was about 2 old Argos catalogues thick of paper like this to send in. So we had to print off nearly every invoice of everything we’d ever bought and sold, which was bonkers really thinking about it.

And yeah, it was a huge process. Ben took all the work on, and full credit to Ben for doing all that.

I was like, “Let’s just not even bother. Let’s not even bother.” He’s like, “We’ve got this far, we can keep doing it.”

And I think that’s one of the things I’ll say as well is that a good business partnership really works like that. I am minded to give things up if they get too difficult, and I think that’s where we push each other well.

But yeah, so we got into the den, and Peter insulted us, and I think we were both really annoyed at that, and we had to be very defensive.

Then there was this random chat that went on for about 40 minutes, and the issue was, we’d spotted it before we went into the den. Our accountant had done the accounts on Friday night.

Because they said, “Oh, you can’t go on unless you do your latest accounts.”

But our year-end only ended 3 days before we filmed. He literally emailed him into Dragon’s Den that moment and said, “Here are our accounts.”

We were looking at them at the same time and as we walked into the den, I said to Ben, “He’s got the stock figure in the warehouse. He’s put £2000 [CA$3,450] of stock.”

I said, “We’ve got a 50,000-square-foot warehouse. There’s more than £2000 [CA$3,450] of stock in there.”

And Peter Jones went in straight away, asked us a few questions, and he went, “So where’s the £30,000 [CA$51,768] gone?”

And he just did this whole thing about where’s the money gone and called as idiots in white coats.

And we knew where it was. It was stock in the warehouse, the figure in the accounts was wrong, but you can’t admit to having the wrong accounts because you’d look even more stupid.

But I said they were produced in a haste for a TV company. They weren’t final accounts, they were draught accounts.

And then he persuaded all the other dragons to go out over this hole he’d found in the accounts, and then he went, “I’m going to make you an offer.”

And we were like, “What?”

I am super positive, I think that’s one of my mental attitudes that if we go to an award ceremony, I just think we’re going to win. That’s me. And it’ll take me 2 days to get over the fact we didn’t win.

And going into the den, I knew we were going to get an offer. So I’m glad to prove myself right on this occasion.

But yeah, we got an offer, and I think even I was a little bit surprised when he went, because obviously at that point you’re thinking 4 Dragons are out, he’s not going to make you an offer.

But he was scribbling with his posh Montblanc pen throughout it all, and you’re like, “What’s he thinking? What’s he thinking?”

Bex Burn-Callander:

Why would he bother if he wasn’t interested?

Phil Pinder:

I was like some hysterical fanboy, just giggling at them when they were joking. And I think that’s why most of the stuff got cut out of the edit, because I was joking. I was telling 2 crows wearing a Hawes & Curtis shirt, which is one of the brands that he owns.

And yeah, it was all great fun. But then Peter came in, he wanted a third of the business, which was…

Bex Burn-Callander:

More than you were offering.

Phil Pinder:

An incredibly cheeky offer, and we were never going to agree to that. We’d asked for 5%. We were already turning over, I think we turned over £1.2 million [CA$2 million] at this stage the previous year.

We were just about to open Blackpool, even though Deborah was telling us that was a stupid decision. And she had friends who run Blackpool Pleasure Beach, and they didn’t operate all year round.

Subsequently, just to say, we operate all year round. So we’ve done something that Blackpool Pleasure Beach can’t do.

And yeah, we made Blackpool a success, but they were very nervous of it. And we were pitching to open another mini-golf in Edinburgh.

We never actually found premises to open a golf in Edinburgh, so we opened a shop instead. But we’re still going to roll forward with the golf outlets, we’re opening 2 new venues this year.

I’m in a secret location on Monday with our designers looking at our next venue that will open.

Invest in clever (and cheaper) advertising strategies

Bex Burn-Callander:

Because how many have you got now? How many shops and how many?

Phil Pinder:

We got The Hole in Wand in York, The Hole in Wand in Blackpool, Potions Cauldron in York, and Edinburgh.

And then we’ve got The Potions Express, which is our little pop-up in the train station in York. Which actually serves all of our other locations by having advertising on the outside of it, advertising all our venues.

Bex Burn-Callander:

Oh, that’s clever.

Phil Pinder:

Well to get the big billboards in York Station, it actually costs about £60,000 [CA$103,536] a year. The shop in the station, I mean, even despite the train strikes, it runs at a break even, so without the train strikes it would probably run at a small profit.

It’s a tiny little kiosk. It was called Kiosk Under The Stairs.

So when I saw it come up, I was like, “We’ve got to have that, haven’t we?

Bex Burn-Callander:

That’s such great advice. Take a really tiny shop at the train station. So everyone coming in for a day out in your city or town sees you as they come in, and then you can advertise all the premises you’ve run there. That’s amazing.

Phil Pinder:

And even when it’s closed, we’ve stickered the shutters. So when it’s closed, it’s nicely decorated, and it advertises Blackpool, advertisers York, and tells people to book with QR codes and things.

So yeah, I’m not sure if we planned it or if it happened by accident, but it was a good little concept in the journey, and it’ll help as we roll out in other locations as well.

But 2 new venues at least opening this year, and an extra 1 in York as well. We’ve just signed last week.

Make sure you have your own IP and don’t encroach on anyone else’s

Bex Burn-Callander:

And can we talk a bit about Harry Potter? Because we need to say that you aren’t actually affiliated with Harry Potter. We need to make that clear.

You are a place for fans of magic, which meets in the great Venn diagram of society, lots of Harry Potter fans, but it wasn’t specifically there.

Phil Pinder:

And lots of people have tried to cash in and do things on their franchise, which is completely not fair. We’ve obviously had chats with Warner Brothers, usually caused by the media, we might get it again after this podcast, who knows?

But for example, we opened in Blackpool and the local paper put “Harry Potter-style golf to open in Blackpool.”

And a legal letter came to us. Our IP lawyer said, “What’s the trouble, wizards?”

And she emailed back, that’s how she talks to them.

And they emailed back, and they said, “Oh, didn’t realize it was you guys. Best of luck. We look forward to coming up and seeing it soon.”

And that’s the kind of relationship we’ve got with them now, where Warner Brothers realize we’re not going to step on their IP.

We’ve got our own backstory, which is our founder, Phileas Fry. So my business partners called Ben Fry, obviously, I’m Phileas.

And Phileas Fry was born in the 13th century. Our shop in the Shambles dates back to the 13th century, and it tells you the story if you look on our website of how he fought in the Battle of the Crécy.

And he came back with some potion recipes and started brewing the potions in the back of his shop in the Shambles, as an underground world.

Then we got the shop, we found the secret recipes under the floor, and we’ve recreated those recipes for you today.

And every venue we open ties into the story of our wizarding journey, and we tie it all together.

So our fans can tell us the things we’ve messed up and missed out.

How to land big retail partnerships

Bex Burn-Callander:

And with the drinks, the magical drinks, you don’t just sell them in your shops, you sell them through other retailers. I’d like to hear about how you landed some of these partnerships.

Because you’re in partnership with quite big household brands now, and I’m sure our listeners would love to know how that came about. So tell me a bit about that.

Phil Pinder:

I think by accident, again, really. To be honest, LinkedIn is an amazing tool.

So we were buying a product called, I’m trying to think of its name, Flying Cauldron Butterscotch Beer, which was the only drink available to Harry Potter fans that had the approval of Warner Brothers, but it was made in America but claimed to be from England.

And we were buying it. Its very, very sweet, it had an enormous amount of sugar in it at that time, and we were buying it on import, but then the sugar tax came in and it started to get more difficult to import.

The prices were going up, and we just suddenly went, this was back in 2020, this was the drink we launched in lockdown.

And we said, “Why do we not just make our own? We’ve got 4 other drinks, let’s have a fifth.”

So we launched our own butterscotch beer, and we launched this during lockdown. It did really well.

And so, then we went after the wholesalers who were wholesaling us the product before, and we thought they’ll be having trouble selling this drink. Let’s sell them our Spellbound, as we call it, and see if they’re interested.

And we signed up a company called Creme d’Or at the time, who were our sweets’ wholesaler. And they put the products in front of Hamleys, who snapped at the chance, and we started picking up people after that.

We supply ourselves directly to lots of the kind of Harry Potter-style shops because, again, for them, it’s an extra product in their shop that’s got a higher margin than the products they’re selling and helps them out as well.

So we’ve lost a couple this year that have fallen by the wayside, which is always sad to see. And we’re always sad to lose customers that the business hasn’t worked.

But we always picked up extras. And our biggest one this year that we’ve been working on for, I think Ben was working on it for about 18 months, was HMV, and what a turnaround business that is.

Doug Putman has done an amazing job of turning around HMV from being this brand that was having a grey audience buying CDs and DVDs, to now it’s just full of young kids who love the kind of Comic-Con vibe and want to get merch and products, vinyl collectors in there.

And so if you’ve not been in a HMV for a while, go and pay it a visit because you will not recognize it.

It’s an amazing store, lots of different products.

And they actually have a section called Spellbound, which is all things witchcraft and wizardry, and we supply them through a wholesaler who’s now our new wholesaler, and they’ve helped with getting product into 120 HMV stores.

It started in October, November last year, it’s gone really, really well. And to the point, we’ve just come back from Las Vegas last week because we supplied to America as well.

And it turns out HMV honed 200, and something stores across there as well, called FYE. So we’re going to be doing a deal across there as well.

Your business will always face difficult periods—but there’s always a new solution

Bex Burn-Callander:

Well, I was going to ask you what next for the business I thought in international dreams, world domination, is that the sort of big focus now for 2024 and beyond?

Phil Pinder:

I think the best thing about our business and what I would say to anyone is, as a business, you are always going to have periods when it’s difficult.

So we try and have different angles of the business that will always do well. So wholesale, some of our accounts run on 30/60 day payment terms.

So Christmas is a really great period, it makes January a really bad period, but all the people ordered their drinks in December have to pay in January.

So actually, we ride through a pretty even cash flow because of this. The first quarter is always tough and always will be, but it helps by having the wholesale business.

And so we want to try and grow the wholesale business this year.

We are also going to be opening new attractions because that also grows the wholesale business by having more people connected to the brand.

So it’s a very complicated business to explain when you say we’re a soft drinks manufacturer, but actually, by having all those different angles to the business, I think it also comforts us a little bit.

Because our big worry post-COVID was that Hamleys wouldn’t come back, they cancelled a huge order the day the lockdown was announced, for 4 pallets of drinks.

And we had the option of we could hold them to the PO, they’ll pay us, but they’ll never stock our products again.

And I, in my ever optimism, went, “It’s only going to be a 4-week lockdown. We can sell these products, they’ll order them again in 4 weeks.”

Little did we know at the time it was going to be a 3-month lockdown, and the products have been nearing expiry date by the time we were allowed to sell them again.

So luckily, we sold them online and through pop-up markets and things like that.

So we don’t always think the solution that seems finite is finite. You can always find a different solution to the problem. And I think that’s the best advice I could say.

Make sure your employees are well looked after and feel connected to your brand

Bex Burn-Callander:

And just finally, when you are growing a business that is all about customer engagement, it must be quite tricky to keep that feel where you kind of make a fuss of every customer that comes in, and it’s that sort of very inclusive, I don’t know, very personal, authentic vibe.

How have you managed to keep that going as you’re increasing the number of stores and experiential premises? You mentioned earlier it’s quite hard to greet every customer these days.

Tell me a bit about how you’re keeping that authentic vibe.

Phil Pinder:

I think the most difficult thing is because we went viral on TikTok in China.

We have lots and lots of Chinese customers turn up every single day at the shop for our Spellbound butterscotch beer served with cream and caramel.

We used to sell maybe a few hundred a year. Now I think we did over 30,000 or so last year, through the shop, for a shop that’s 18 square metres.

And we physically can’t fit any more people into the shop on a Saturday, hence why we just signed new premises across the road.

So the experience room that’s in the back of the shop can now be moved into a different location. So people will still finish their experience by being told to go and collect something from the shop, and we’ll still tie them to the shop.

But the experience is in a different premises, still in the Shambles and still only a stone’s throw away, but it stops that kind of bottleneck that we’ve created by maximizing the shop and doubling and tripling its turnover since we first started.

Difficult problems to have, but always fun when you can solve them.

And in terms of how we’ve done some of the other stuff you mentioned, obviously it’s always going to be hard to keep your staff engaged and keep them in trust with the brand. There’s always going to be people that don’t buy into it.

So we have induction periods, and we don’t usually, for want of a better word, sack people, but people realize themselves that it’s not for them.

So we have a great recruitment process. We’ve signed up to the Good Business Charter. We pride ourselves on paying good wages, paying the real living wage.

We give bonuses and the staff get a gift box when they arrive to try all the products.

Because the last thing I hate is when you go into a store and you ask somebody, “Oh, what does this taste like?” And they go, “I don’t know, I’ve never had it.”

You want your staff to be ambassadors for your product. So if we launch a new product, everyone gets a bottle, we want them to try it we want them to love it.

We give them huge discounts on buying the stuff themselves so they can fall in love with it. We’ve recently had our first ever annual staff day, for our, now I think we have 46 staff now, which is terrifying.

But we’ve got everyone from HR people to we’ve got a whole team here at Wizard HQ, Natalie upstairs, who does a job with the staff and helps with mental health and goes and checks if people are feeling okay.

Because obviously there’s things that can happen in your everyday life that will affect your day job, and then you then get upset because it’s affecting your day job.

So we try and help people out in those situations as well. Trying to be that listening ear where we can and help people through the tough situations in their lives is one thing I think we all do, and trying not to be a big business is the thing. It’s trying to be a loving, caring family.

So having that annual staff day, despite having the huge bill, and I did jokingly put to the board, “How much should this cost us?”

But we launched this year, we launched our own houses, so our houses are tied to our 4 drinks, and each of the staff member is tied to a drink.

I’m apparently a Serpent, so that means I’m a little bit devious apparently, and I’m all the team Serpents, and they can get house points based on good customer views where they’re named.

We do a mystery shopping location every month. So if you score highly in that and you are the mystery person, you get house points for that.

I think we’re currently in last place, the Serpents, we’ve been stitched up, but we also have the least number of staffing in our house, so I can guarantee it’ll be rectified very soon.

I’m not allowed to give out house points, apparently. Because I would cheat because that is the devious nature in me.

Bex Burn-Callander:

Yes, you are devious. That’s hilarious; I love that.

Phil Pinder:

But that’s what it’s about. It’s about making people enjoy.

I think you’ve got to enjoy your job. If you don’t enjoy your job, you’re in the wrong job.

I would say to anyone listening, go and find a job you’ll enjoy, because that’s what we spend a third of our lives in our jobs, and it’s got to be something you love and enjoy doing every single day.

And if you don’t, then there’s something else out there that will make you feel that way. And I think that’s it really. And I love being the director of Wizardry at the Potions Cauldron, it’s a great thing.

I’m apparently in charge of acquisitions, which is another word I love. So we have acquired another business this year.

We bought Wizards Gold, which was a brand of alcohol, and we already sold alcohol, but now we’ve got these cool, I don’t know if I have any behind me, cool wizard-shaped bottles, and we put the magical shimmer into the alcohols as well.

So it appeals to our grown-up customers as well as the kids. But everything we do is family-friendly, everything we try and do is affordable.

And it all comes back to those key principles that we have in our vision and values of the company.

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