Staring into the abyss and seeing the summit — lessons learnt from a serial entrepreneur
Lesson #1: Believe in yourself
Over the last 18 years, I have learnt a huge amount about starting, growing and selling entrepreneurial businesses.
This article is potentially the first of a series that aims to illustrate the lessons I have learnt, and those from other successful entrepreneurs, to help you avoid some of the same mistakes and accelerate your growth plans.
To say I have had an eclectic professional life is an under-statement. A few examples from my recent past include:
- Started/co-founded 8 entrepreneurial businesses
- Acquired 2 businesses with personal savings plus bank debt
- Built a Professional Services business to over £20m turnover and 120 Consultants
- Sold 2 businesses to trade buyers
- Raised over £6m of commercial bank debt with no Personal Guarantees and paid it all back in full with interest
- Started a successful special education needs school from scratch and then sold it
- Worked with some of the leading UK PE houses and their portfolio companies on cost reduction programmes
- Advised and Chaired a number of SMEs on their Growth Strategies
The rest of this article starts to explore key lessons learnt about growing entrepreneurial businesses and the practical things you can take away to accelerate your growth plans.
Lesson #1: Believe in yourself
In 2006, I came across a once-in-a-lifetime business opportunity. Two very talented guys I knew were looking to sell their successful business and we managed to construct a deal that worked for all of us. As part of the acquisition financing package, I convinced one of the big UK commercial banks to put a loan into the SPV I had created.
For those of you involved in raising debt, I managed to secure the deal with (limited) personal savings and no Personal Guarantees. In hind-sight, this turned out to be one of the best negotiations of my life.
So, why is the Lesson learnt “Believe in yourself”? At the time I entered into the negotiations with the vendor, 90% of my friends and business contacts thought I was literally “crazy”. People close to me were saying things like:
- “what do you know about buying a business?”
- “why would you risk your savings on a venture like this”
- “it’s too good to be true, there’s a catch somewhere”
A few trusted friends and advisers believed in me, understood the logic, and the risk I was taking and said “if you believe in yourself and you have thought it all through, then you should go for it”.
So, my advice is, when you see a market opportunity:
- Write a business plan
- Test it to the point of destruction using desk based research and talking to trusted business contacts
- Get to know the industry sector really well, talk to people who run businesses in that area, learn quickly what they have learnt over years of toil
- Make sure you have an angle, something that puts you at a unique advantage
- Make sure if it fails, it won’t kill you in the process
Lesson #2: You don’t need eyes to see, you need Vision
I have always been a huge fan of Maxi Jazz and Faithless. One of the key lines from Reverence really struck a chord with me and similarly with many entrepreneurs. It’s one of the easiest lessons you’ll learn but one of the hardest to apply day to day.
It’s critical that you know where you are going, before setting out on what will undoubtedly be a difficult, intense and hopefully rewarding journey. The practical things you need to think about are:
- What is my vision 3–5 years out (or longer)?
- How will I know I am heading in the direction along the journey?
- Like a ship at sea, you need to be prepared to tack towards the Vision, or if need be, change course/pivot mid-adventure if you are heading into The Perfect Storm
Lesson #3: You’ll need courage and clarity of thinking to make it through the nightmares
The 24th Nov 2010 is inscribed on my memory. I was sat, alone, in my office just off Oxford Street in London thinking “this could be the end of my business career”. My heart sank and my shoulders dropped, it felt like my Armageddon was just around the next corner.
It was the height of the global financial crisis, we owed the bank over £3m, we had pumped several £million pounds into new ventures and we had just breached our banking covenants. I knew that if I couldn’t convince the bank that I had a credible recovery plan, they would “take the keys off me” within 3 months, leaving my business investments and career in tatters.
These are the times when you need clarity of thinking, honesty and the ability to sell a practical plan of action. I can’t explain everything we did due to confidentiality, however, the key elements included:
- Getting the right advisers on side
- Writing and delivering a credible work-out plan
- Re-negotiating the loan agreement/payment plan with the bank and a number of unsecured creditors
- Restructuring the entire business and re-focusing on the core
- Meeting the bank every month to demonstrate progress against the plan
My practical advice to you if you find yourself in a similar situation (apart from the obvious point about avoiding getting into this position in the first place):
- Don’t fool yourself or let others convince you it’s ok. It won’t be unless you take control and put together a plan
- Be honest with creditors. Tell them the real situation and how you plan to work with them to get to the other side
- Build a plan, get all the stakeholders to buy-into-it, then deliver relentlessly and report progress
If this article gets any interest, I will continue with my next three lessons learnt across the many years of starting, growing and exiting entrepreneurial businesses.
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