Always stay in the driving seat
We’d had some experience of employment tribunals while expanding Done bookmakers, learning some valuable lessons from an awkward employee taking us to a tribunal. So, we were very interested in turning this experience into a business opportunity.
Rather than running this new company ourselves, we decided just to financially back the venture. We invested £800,000 in the existing firm with the aim of making it profitable within a year. In hindsight, we were naïve to invest all that money and let others run the business. Generally speaking, that’s a recipe for disaster. Over the course of the next three years, we invested a further £400,000 but never saw a return. Our accountant advised us to get rid of the business, but I decided to take a bigger involvement to try and salvage our investment. This made all the difference, proving that the management team is often the biggest determining factor in a company’s success.
Meet people, make sales
It sounds obvious but there’s really no substitute for getting out and meeting people in business. When I took over hands-on management of Peninsula, it became clear that there just wasn’t enough work coming in. So we made generating sales a priority and sent everyone out to meet potential and existing clients. It took a lot of work, but once we had 3,500 customers we returned a profit. Now Peninsula’s net profit is £9.1 million and turnover is £40 million. The fact is, if you’re not generating enough sales, you won’t survive – which we nearly learnt to our cost! You can worry about your marketing strategy and how to spend your revenue further down the line, but first you’ve got to earn enough.
Weigh up the risks
Never rely on your business plan. It might sound controversial but in my experience, even if it’s a conservative plan you’re not likely to hit all the targets. You have to be prepared for the unexpected. I’ve made a lot of acquisitions over the years, both in the betting business and Peninsula, which has made me wary of business plans that promise the earth and can’t deliver. Looking back, I’ve probably risked more personally and financially over the years than I should have. But it’s taught me the importance of considering the worst-case scenario. It’s vital to weigh the worst possible outcome against the potential for the best result.
Then, if you think it’s worth the risk you should have no regrets about going for it.
Take in fresh blood
I think it’s far too easy for growing businesses to recruit internally, rather than looking outside the business to hire fresh talent. In the early days we thought it was sensible and simpler to promote from within, but on occasions you can be missing a trick. Bringing in people from other companies, particularly from competitors, can really boost your operation. Your company doesn’t have a monopoly on good ideas! Very often we’ve found that just a tweak to a system here or some extra attention there has saved time and money and dramatically increased productivity.
The only way past problems is through them
As a CEO, it’s very tempting to delegate difficult decisions or shelve complex issues to tackle at a later date. I’ve done that a few times in my career and the truth is, they fester when left unresolved and come back as much bigger problems in the future. Obviously, not everything should be your responsibility, but if you hide away in your office and don’t get involved you won’t have a comprehensive understanding of the key issues facing your company.
I really believe you should tackle problems that are clearly your remit head on, rather than hoping someone else sorts them out. A proactive approach will set an example that filters down through the company and your staff and management team will respect you more for it in the future.