Entrepreneurs Survey 2014: the results
The anatomy of an entrepreneur
The anatomy of an entrepreneur
Contents
Foreword by Lord Digby Jones
Page 1
IntroductionPage 2
Risk takersPage 3
Decision makersPage 4
Success is a team game
Page 5
Innovation and vision
Page 6
Adrenaline junkiesPage 7
Education, education, education? Page 8
Passion and energy
Page 9
Reward is so much more than just salary
Page 10
Work ethicPage 11
Nature or nurture?
Page 12
ConclusionPage 13
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Foreword
I am passionate about developing entrepreneurial talent in the
UK and currently spend a significant amount of time mentoring
budding entrepreneurs in the belief that they are the engine
behind future economic growth in this country.
Being an entrepreneur can be isolating, so it is useful to have
someone to act as a ‘sounding board’ and to give them opinion and guidance. Appointing
an experienced non-executive director and having good business advisers can deliver
huge benefits.
As an entrepreneurial business grows, managing that growth in itself becomes a
challenge, and the business founders will need to accept they must adapt and change
the way they operate. Entrepreneurs often struggle to delegate, and it is therefore
important that they surround themselves with good people who can focus on different
aspects of importance for the future of the business. There can be a temptation for
entrepreneurs to chase exciting prospects whilst having a tendency to neglect the more
mundane matters, such as putting in place robust financial controls and systems.
In my opinion, UK entrepreneurs can be too hasty in exiting their business, taking the
money and walking away, rather than focusing on growing a larger, more successful
enterprise. In such businesses, the role of the business owner is paramount – setting out
a clear vision and strategy, earning the respect of their people and understanding the
difference between pressure, that can enhance performance, and stress, which has the
opposite effect.
To those of you reading this publication who are entrepreneurs, I salute you. Your role in
the UK economy has never been so important. You have the ability to create jobs, wealth
and to build a legacy to be proud of. I wish you the very best of luck with all of your
endeavours.
Lord Digby Jones
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The anatomy of an entrepreneur
Introduction
A recent article reported that 83% of 17-year-olds want to
run their own business, rather than be employed. The spirit of
entrepreneurialism is clearly alive in Generation Y, which bodes
well for the future. Indeed, Britain’s entrepreneurs are essential,
both in terms of future job creation and economic growth.
At Saffery Champness, we have a team dedicated to supporting
the needs of entrepreneurs. We recognise how important it is to nurture the UK’s
entrepreneurial talent and to support ambitious business owners by removing barriers
to growth, for example through generous grants and tax incentives. It is in all of our
interests to ensure that the UK remains one of the best places in the world to be an
entrepreneur.
In providing support and advice to our entrepreneurial clients, we wanted to try
and understand the DNA of the UK’s most talented business men and women. This
publication summarises some of the common themes that came out of a series of
interviews with successful entrepreneurs, carried out by Chris Maguire from the
business publication Insider, at a number of events hosted by Saffery Champness during
2014. We were keen to understand what sets these people apart from the rest of the
business world.
I would like to express my thanks to all of our interviewees during the course of the
year, to Chris Maguire for conducting the interviews and to Lord Digby Jones both for
agreeing to be interviewed and for providing the foreword to this publication. As you
will know, Lord Jones was formerly Director General of the CBI and now serves as a
business ambassador for UK Trade & Investment. He is a man whose views and opinions
matter, having immersed himself at the heart of British business for many years.
Whilst this publication can in no way serve as being a guaranteed formula for success, I
hope that you will find it to be an interesting insight into the anatomy of an entrepreneur.
Generation Y take note!
Simon Kite
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Risk takers
“Entrepreneurs don’t see barriers, just hurdles” was how one interviewee attempted to
sum up what defines an entrepreneur.
Another described an entrepreneur as someone who can
“see an opportunity where others see issues”.
A third took the risk factor to a whole new level, defining an entrepreneur as someone
who would “jump off a cliff and build an aeroplane on the way down”!
Wherever you set the bar in terms of an acceptable level of risk, it is clear that
entrepreneurs set it quite a bit higher than the average person. Our series of interviews
did, nevertheless, highlight a recognition that risk has to be managed. The managing
director of a pet foods business commented that he was “a risk taker, but not reckless”.
Another highlighted the importance of “stress testing” ideas with colleagues and a
number of others highlighted the value of non-executives as a “sounding board” for
business strategy. As one put it; “ensure you’ve a co-pilot – a human sounding board for
matters you can’t discuss with staff or the bank”.
The owner of a chain of physiotherapists was not alone in choosing to invest in his
business rather than paying himself, and we have heard many a tale of an entrepreneur
who has suffered financial hardship in the belief that their business venture will reap
significant rewards in the future.
The management of risk is vital in any business and it would appear that successful
entrepreneurs will recognise how their natural optimism needs to be counter-balanced
by adding more cautious individuals to their management team.
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The anatomy of an entrepreneur
Decision makers
The owner of a marketing business highlighted the importance of trusting one’s
instincts:
“Think through decisions, but it is important to make them quickly. Some of my mistakes in
business have been a result of taking too long to decide on something.”
Another interviewee agreed that, when an entrepreneur sees an opportunity, they may
only do limited market research – noting that demographics, and hence the results of
market research, may often be out of date.
Whilst these two interviewees promote the advantages of
acting quickly, a third added a note of caution: “you don’t
have to be the first; just be quick and be better”.
Entrepreneurs also need to know when to walk away, as acknowledged by Lord Digby
Jones in his interview, whether it be from an onerous contract or an unacceptable offer
for your business. This advice is not always as easy to act on as it may sound.
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Success is a team game
A number of our interviewees spoke of surrounding themselves with people who they
described as being “better” than themselves. The founder of a digital agency admitted
that his tendency to generate new ideas constantly makes it more difficult to maintain
focus on a particular project. As a result, he relies on his management team for many
operational matters. Another entrepreneur spoke of the importance of being able to “let
go” and not be a “control freak”. She did however add that this is only possible if you are
surrounded by good people.
Surrounding yourself with good people was also recognised by our entrepreneur
interviewees as being an integral part of their exit strategy, so developing and retaining
talent at the senior management level is seen as a priority.
It was interesting to hear our entrepreneurs speak about the importance of staff at all
levels in their businesses. “Respect your staff” was a common theme. The managing
director of a photographics business started her working life on reception. She was
keen to highlight the important role that front of house staff have to play: “Reception is
a conduit for everything in the business. They get to know all of our clients”. The founder
of a car dealership told us that he has personally paid for three staff to have heart
surgery, stressing the need to look after staff working in his business, which includes
paying them well.
The mantra that he expects all of his managers to live by
is “be caring, be honest and be proud”.
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The anatomy of an entrepreneur
Innovation and vision
Innovation and vision is clearly seen as a key driver
of business success. As one interviewee put it, “it’s
important to be a disruptor”.
On the matter of vision, one business owner spoke of the need to “see the bigger picture,
whilst still getting involved with the detail”. The owner of a branded textiles business
spoke of the need to constantly look for “the next big thing”.
Whilst our interviewees were fairly unanimous in their quest for innovation, their
methods were more varied. The founder of a bathrooms business has changed the
structure of one-to-one meetings with his management to focus less on KPIs and more
on asking the questions “what can we do better?” and “how can I help you do that?”
The managing director of a family brewery regularly seeks ideas from staff on how to
improve the business, at monthly lunches. With 20,000 followers on Twitter, social
media is another excellent forum for him to test out new ideas. We also heard how one
business owner organises innovation days for his management team.
Research points to a strong link between reading/learning and creativity. The owner of
a dairy business told us that “entrepreneurs keep learning”. The founder of a healthcare
recruitment business told us that he tries to “learn something new every day”. If
knowledge is power, our interviewees certainly demonstrated a thirst for power in their
businesses, to inform their strategic thinking.
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Adrenaline junkies
There was a clear theme amongst our interviewees in having an obvious passion
for sport and, in particular, gruelling challenges that help to satisfy the competitive
instincts of an entrepreneur. We heard numerous accounts of marathons, triathlons,
long distance cycling, mountain climbing, trekking, sky diving and other activities that
challenge them and provide a “buzz” when completed successfully. One interviewee had
even attended an event which culminated in all of the attendees walking over burning
coals!
It is perhaps unsurprising that successful business
men and women seek to push boundaries, challenge
themselves, and have a competitive nature.
In many cases, this thirst for adventure was matched by a desire to “give something
back”, by taking the opportunity to raise significant amounts for charity at the same time.
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The anatomy of an entrepreneur
Education, education, education?
Whilst some of our entrepreneurs excelled in the education system and studied at
university, a significant proportion pointed out how they simply did not fit in with the
routine, structure and conformity that comes with attending school and studying for
exams. Indeed, a significant number said that they had bunked off school and many
dropped out of the education system at a relatively young age.
Even in their adult lives, our interviewees admitted to being “hard to manage” and
described how they would not be able to survive in a large corporate culture. They
recognised how larger businesses require a completely different skill set from smaller,
more entrepreneurial businesses. Indeed, the owner of a dairy business told us that his
father had advised him to “grow a business, put a manager in and then take a back seat,
whilst taking money out every year”.
We spoke to the managing director of a sixth generation family business, who had
received a very privileged upbringing, which included private education and attending
university.
When asked if he would encourage his children to go to
university, his view was that university does not matter,
commenting that “talent will out”.
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Passion and energy
Without exception, all of our entrepreneurs were passionate about their businesses.
This enthusiasm will inevitably translate into an ability to inspire and motivate their
people. One interviewee told how he chose to buy his first business before buying his
first house.
Whilst such energy and enthusiasm can be infectious, entrepreneurs need to know when
to let go. Succession planning strategies require second tier management to be provided
with the opportunities to develop their own leadership skills and to demonstrate that
the business can prosper without the original shareholders’ input.
The durability of some entrepreneurial business leaders
has to be admired; their passion for their businesses has to
be an obvious factor in their longevity.
One interviewee, who has Betfred founder Fred Done as an investor in his business,
mentioned that Fred told him of his desire to work until he is 100. Apparently, he aims
to be in the gym twice a day to ensure that his health won’t prevent him from this goal!
Similarly, the head of one family business that we interviewed is still going strong at 76
years of age and appears to have lost none of his passion.
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The anatomy of an entrepreneur
Reward is so much more than
just salary
A quest for wealth is a common trait with entrepreneurs and our interviewees were
no exception. Our series of interviews did, however, demonstrate that this can come in
many guises.
One turned down a very well paid job on the grounds
that he didn’t envisage ever being offered equity in that
business. He commented that “equity is worth more than
any salary”.
Whilst all of them were focused on building value in their business, it was evident that
this is a motivating factor only up to a certain point. One in particular said that he used to
be driven by money, but now that he has some financial security he derives satisfaction
from being an angel investor/mentor in other entrepreneurial businesses.
Some of our interviewees were asked about their specific exit plans and two were very
clear in saying that they thought having an exit strategy “can be a big distraction”. The
majority, however, recognised the need to groom their business for an exit, keeping all
options open, and with a reasonably clear indicator of the value of the business that they
were aiming for on exit.
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Work ethic
Our car dealership owner was keen to emphasise that
“luck and hard work go together”.
Like a number of our entrepreneurs, his work ethic was formed from an early age.
Having parents who are good role models was a common thread in our interviews. One
entrepreneur was inspired by his father, a long distance lorry driver who was frequently
up at 5.00am and back home after 9.00pm.
Another was the only child in her school from a broken home and cited her mum as her
inspiration. In her words, her mum had a “massive work ethic”, which clearly rubbed off
on her daughter. This included, aged 12, working in a pub washing potatoes in order to
buy a pair of new shoes that she wanted, but which her mother couldn’t afford.
Entrepreneurs are evidently self-starters. As we have already noted, being an
entrepreneur can be a lonely experience and there is often no-one in the background
to get them motivated. A recruitment business owner described himself as “first in and
last out” of his business premises. A number of our interviewees also spoke of personal
sacrifices in their work-life balance, in particular in the early years of growing their
business. Whilst inevitable, perhaps, during the start-up stage, it was recognised that
this can result in entrepreneurs being trapped in the detail of business operations,
without stepping away from the business to consider business strategy and the bigger
picture.
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The anatomy of an entrepreneur
Nature or nurture?
Throughout our interviews, entrepreneurial traits were
evident from an early age. We heard school yard tales of
selling sandwiches, sweets, ice-creams and other goodies
for a profit.
One had a business venture at school selling fake letters from parents, excusing their
child from PE. The owner of a digital agency was already building his own website at the
age of 14. With its Manchester United themed content, it became so popular that he
arrived home one day to find a message offering him a job.
The question of whether entrepreneurs are a result of nature or nurture has long
been debated. Our interviewees came from a diverse range of family backgrounds
and there was certainly no evidence that their family trees are laden with successful
entrepreneurs.
The views of the two family businesses on the nature versus nurture debate were
particularly interesting. One of them spoke of how he recognised the need to continue
nurturing his business and leadership skills. He told us of the value he had got from
attending a Tony Robbins weekend event in London. The key theme was ‘why have a
ceiling on your life?’ This was a message that he immediately implemented on returning
to the office, when he increased the targets for his sales team. Another cautioned that
budding entrepreneurs within family businesses should not report to their parents:
“Don’t have your kids reporting to you. If they report to someone else, they can make
mistakes and develop.”
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Conclusion
Whilst in many countries failure is accepted as being a valuable learning tool, our
interviewees agreed that in the UK there is far more of a stigma to failure. So, whatever
your views on the nature or nurture debate, it is clear that entrepreneurial talent can be
stymied.
At Saffery Champness, we advise and support the entrepreneurs behind some of
Britain’s fastest growing businesses. We take pride in our true partner-led service,
which means our clients always have direct access to the key point of contact dealing
with their affairs. We also recognise that entrepreneurs need something a little different
from their advisers, which is why our services encompass all of the everyday compliance
aspects of doing business (accounts, tax returns, VAT, etc) but we can also offer much
more valuable strategic advice to help you grow your business – we can be the sounding
board for your big ideas.
Saffery Champness is a true partnership and so each of
our partners knows first-hand just what it’s like to be in
business today, and the challenges you face.
We hope that we will soon be able to include you amongst our growing list of
entrepreneurial clients.
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