Twenty years ago, I decided to go freelance and set up my own design company with a £3,000 bank loan.
I sat in a room above a garage, looking after clients all day and working all night. I had no experience of running a business beyond being an employee.
From day one, I wanted to build a business and not just earn a living. You get people who start a business who want to earn a living by working from home. They want the freedom and so called work/life balance that can bring. They pull every bit of money they can out of the company.
For me, it was about making something. Indeed, the advice I give to people is that if you want to build a business, take as little out of the company as you can to live on, and plough it back into the business. Come the end of the year, if you’ve done well, then you get a dividend. You don’t get rich owning a company, you get rich selling it.
As that company grew during the next six to seven years, I won a lot of contracts with the big advertising agencies in Leeds. That became a problem when the recession kicked in at the beginning of the 1990s. We were doing so much work with the agencies and then they cut costs.
I’ll never forget it. One agency was paying us around £25,000 a month and on 20 December they just said ‘goodbye’. That was a nice Christmas present.
I went on for another six months but unfortunately I went down. I paid off all my debts. I’ve always been a people person and tried to do good to people, so I didn’t run the company down so that it couldn’t pay off what it owed.
The first thing I learnt from that experience was to ensure that it would not happen a second time. I would never be in a position where anything could hurt me that badly again. In a way, I would say it held me back in business as I’ve probably been overcautious.
Not a lifestyle business
I started another design company and that was going well until I decided to make an acquisition.
We didn’t take legal advice or employ an accountant. We didn’t want to get people involved like that as we wanted to grow the company quickly. There wasn’t a great deal of money changing hands – about £20,000 – and we thought we could grow the company rapidly.
It didn’t work because there was a cultural clash. Everyone there was trying to pull as much money as they could out of the business. The attitude was: “Let’s have ten pints a night – the company will pay for it.”
That didn’t suit how we worked. There was a clash straight away. We couldn’t understand each other. My working day is still from 7:00am to 7pm. They were in at three minutes to 9:00 and then they left at 5:30.
Within five to six months it was a nightmare. You were going into work knowing there would be an argument. So we just walked out, myself and three others. Since we left, the whole thing went bust within 18 months. It didn’t work for them either.
Getting it right
I see that as a past life now. At ICM we’re looking for acquisitions. What’s happened hasn’t scared me as I’ve learnt so much from my past mistakes. Without doubt it’s made this company stronger.
I now realise there are people out there who are so much cleverer than I could ever be. So, for instance, I would seek professional advice when making an acquisition. Fortunately, we’re in a position now to employ smart people as opposed to bringing in juniors all the time and training them up.
As we know, the economy is going into a downturn, but this company is in a strong financial position and we’re very confident. A lot of companies out there will unfortunately go to the wall. If they’re working on high borrowings, they’ll be in trouble. We’re not. We’re cash rich and that is going to help us.
We probably have three major clients that make up just under 50 per cent of the company’s £1 million turnover. But if those three walked out the door tomorrow, we would not go down.
The only concern now is to move to larger premises. I took on a 25-year lease as a personal guarantee. Back then, you could sell a lease for a profit and I was advised that this was an asset to the company. I didn’t realise it was going to hang round my neck for 22 years.
That’s probably had one of the biggest impacts on my life, knowing this lease has to be serviced. No matter what happens, the quarterly payments have to be found. We have someone who is interested in our offices now and we want to move on. That’s another really exciting development.
For me, now, it’s about making sure the team of managers I have is ready to take over the company when I exit during the next few years.
Someone once told me that you should go into business to make yourself redundant and, effectively, that’s what I’ve done.