How These Brothers Went From Cleaning Toilets to Billionaires

Amardeep Parmar

https://img.particlenews.com/image.php?url=2XtlxH_0ZQqOAUw00

You’ve probably never heard of the Issa brothers but they are worth over $4bn each and together they run The EG Group. The picture shows them smiling after winning EY’s Entrepreneurs of Year award. All this despite coming from humble beginnings where their father worked in a textile factory in North England.

Neither went to university and you could be forgiven for thinking at 18 they weren’t likely to get to where they are. When they were teens, their dad bought a gas station and they started learning the ropes. They spotted opportunities that others didn’t and today they run over 5,500 gas stations as “forecourt convenience retailers”. They completely transformed the industry.

They are proof that hard work and creativity can take anyone to the top. Here is their story.

The hard yards

You won’t see Blackburn, where they grew up, on any postcards. It was voted the tenth worst place to live in the UK in 2019.

It was here they worked in their father’s petrol station including all the dirty work. As well as doing the stocktake, they had the glamourous job of cleaning the toilets. It was because they rolled their sleeves up, they knew exactly how to run a gas station and started daydreaming about their own business.

They worked long hours for several years together to save up the money to buy their own station in 2001. They spent their entire life savings, around $200k, and they had nothing to fall back on if things went wrong. Would you spend your life savings on a gas station?

Simple but revolutionary ideas

It’s a good job they believed in themselves as it didn’t take long for them to realize their revenues were way higher than expected. They had access to the previous owner’s numbers and made a mockery of them.

They made small changes that seem obvious to us now but other owners weren’t doing it at the time.

  • Make a fill-up a full-on shopping trip
  • Multiple fuels at one pump
  • More lights at night to make people feel safer

The items they sold at the connected shop had high margins as customers were willing to pay for the convenience. It makes perfect sense in our busy lives to get the milk at the same time as filling up.

This success meant they raised money for more sites and replicated their success there. They had proof their ideas were working and banks were more than willing to invest in them.

Partnerships with major brands

Convenience retailing was a great money-maker but it wouldn’t make them billionaires. Their network of stations was prime real estate for big companies. These companies wouldn’t want to start a single shop or restaurant in the middle of nowhere. Yet when tied in with a gas station, the logistics became easier and footfall guaranteed.

Of course, none of these companies would want to learn the gas station business themselves. The Issa brothers' knowledge gave them negotiation power. As their network grew, the scale made other companies take them seriously.

I could not count on my fingers and toes how many times I have stopped for a Starbucks or KFC at a gas station while on a long drive. They’ve also got deals with Subway and Burger King. These are natural choices for tired drivers but somehow their competitors didn’t catch on and their empire grew.

Debt fuelled expansion

Some internet experts consider borrowing a sin but rarely are they billionaires.

The Issa brothers’ track record allowed them access to the debt markets and they took full advantage. Their $8bn in debt makes them the fourth biggest borrower of collateralized loan obligations in Europe! This money was used to buy 1000 sites in America and 560 in Australia. It’s a true giant with 30,000 employees and $26bn in annual revenue.

Their love of debt means they haven’t had an IPO yet and each owns a quarter of the company even at this large size. The other half is owned by TDR Capital, a private equity firm. If they had gone the traditional route of listing, it’s unlikely they’d still have stakes as big as they do. Their brilliance can shine through without needing to answer to shareholders.

What you should take with you

The Issa brothers are an inspiration to many entrepreneurs born without privilege. Their growth shows no signs of slowing and they may finally list the company this year.

Their success was built on:

  • Knowing their industry inside-out from the bottom
  • Taking risks on innovative ideas no one else was doing
  • Partnering with big brands to draw customers in
  • Backing themselves to expand rapidly and apply their model worldwide

This can be used as a blueprint to mimic their success. In a world where everyone wants to make a shiny new app, they were passionate about a less sexy industry and it paid them handsomely.

Comments / 0

Published by

Redefining productivity through mindfulness

104 followers

More from Amardeep Parmar

Comments / 0