How did you get involved with the New Covent Garden Soup Company?
The business caught my attention and I persuaded the founder that I should be involved. At the time it was really struggling, but I was given a job for a month due to my farming background, rather than any qualifications or prowess.
The first question I was asked – and the one that got me hired – was: “Do you know where to buy cheap carrots?” I grew up in East Anglia, so I did. I soon set about trying to buy raw materials more effectively. It’s what the business desperately needed at the time. It’s probably the single most useful thing I’ve ever done in my business life. After a month, the backers of the company asked me to run it. The business did worse before it did better, but we made a profit in 1993.
What attracted you to Green & Black’s?
I met someone at a party with a small organic food business – and with a smaller chocolate business attached to it. My business partner, Nick Beard, and I ended up buying 80pc of it. The “small chocolate business” was Green & Black’s.
It was a fantastic brand and much easier to turn around, because we had learned so much from the New Covent Garden Soup Company(CGS). I learned that you didn’t have to make everything yourself – you could contract out the production. So we had dozens of products being made in factories all over Europe and focused our energies on marketing and sales.
One of the first lessons I learned at CGS was that a team can’t all just be chasing a ball mindlessly, because then there’s no one to pass it to and carry it forward. I applied that learning right away. I over-invested at the beginning and created a team where people were able to run a much bigger business than Green & Black’s was at that time, so we were ready to scale from the start.
What’s your best piece of advice for start-ups?
You need a really good finance person. A minute without one is a minute wasted. It’s vitally important to have good numbers. Even as a relatively small business in food and drink, you have millions of sales units each year. You need to keep account of all of them; you need to know where they’re going; and you need to know if your supermarket promotion is working. You also need to know if selling on promotion is going to cut your margin down and impact on cash flow.
You can’t make decisions on brands, sales or investment unless you know what the figures are and can see what’s happening right now. It’s no surprise that my best and long-standing business partner has been a fantastic commercial finance director who challenges enthusiasm with real figures. You need them like you need a navigator on a plane – they’re essential.
How do you create a crack team at a start-up business?
You should make an environment where people who enjoy the idea of being in charge can feel at home. If they’ve joined what feels like an exciting business, but then they’re not allowed to take decisions for themselves, they will leave. Not only that, word will get out that your company isn’t a great place to work. The entrepreneur’s prejudice that “you can never find the right people” can become self-fulfilling.
The purpose of the leader is to create an environment that attracts good people, so a team can develop. Then you’ve got to get out there and persuade people to join you. Go for well-qualified staff, but not people who are so superior that they aren’t prepared to make their own tea or clean a toilet – people who can roll their sleeves up.
People who might know how to work at a multinational, but who would like to work somewhere where the whole team goes to the pub after work – those are your target management candidates.
What do you make of the climate for start-ups at the moment?
It’s easier in some ways and harder than others. In groceries, for example, it’s tougher. When I was selling into supermarkets with CGS, the big chains were going through massive expansion and they were desperate for new products. There was none of the crushingly-hard data analysis that you have to do now. They were quite nurturing. I remember presenting to Sainsbury’s and accidentally using a Tesco header on a slide and everyone laughing
For a small business with a good idea now, the chance of someone even taking a call [at a large supermarket chain] is unlikely. It’s really tough for food and drink, but the internet is presenting new markets.
More generally for start-ups, the tax environment in the UK is very good – and mainstream investment looks pretty grim. So people are tempted by new businesses, as they can get tax breaks and possibly make cash by investing in a new venture. They won’t get much return on their money elsewhere.
Also, the people leaving university in their twenties are now much more excited about a career in an early-stage business. It used to be really hard to attract junior and middle talent, but now it’s very different. The “job for life” has gone. People want more than just a job; they want to feel fulfilled by their work.
Is it difficult to move on from a business?
Losing [selling] your first business, which really is your baby, is very difficult. For me the regret I have over [the sale of] Green & Black’s was [that it lost] its potential to be a business that’s a positive force in society.
It was a great illustration that a business that is trying to make profit can also try to make the world a better place. Sometimes I would get frustrated that we were made a poster-business for a benign kind of capitalism. All businesses should behave well and look after their supplier base. It feeds into a feeling I have that in Britain we’re selling our businesses too readily. We define success by how much you sell a business for, rather than longevity. Everyone shouldn’t just be talking about the exit from a business. It’s about more than that.
[Source:-Telegraph]
