Money makers

Sep 22 2008 by Jez Davison, The Journal

FOR a region still labouring under a cloth cap image, the North East has spawned some remarkably successful – and extremely wealthy – individuals. Jez Davison saw the colour of their money.

DUNCAN Bannatyne is the rugged face of North East entrepreneurial talent. The cash-rich businessman-turned TV Dragon and author got fed up with being a beach bum and decided to reinvent himself as a successful, go-getting entrepreneur.

A former stoker in the Navy, Bannatyne is now the 267th richest person in the UK – and the second richest in the North East – after building up a business empire worth a cool £310m. Now he’s on a crusade to help wannabe entrepreneurs do the same.

His new book, Wake up and Change Your Life, is Bannatyne’s typically in-your-face assessment of the tools and techniques necessary to create successful, sustainable businesses for those born not so much with a silver spoon in their mouths, but with a trowel to dig themselves out of the pit of relative poverty.

Through simple steps, case studies and his own unique brand of “Den-Budhist” advice, he provides practical information and tips on establishing a business and how, crucially, to make sure it remains profitable.

In today’s illiquid climate, that’s easier said than done.

Simon Pearson, who has built Middlesbrough-based Pearsons into one of the UK’s biggest independent recruitment and marketing companies, says many failed businesses forget the crucial maxim that cash is king in any economic environment.

He says: “A successful company needs to have tight credit control policies, such as invoicing immediately after a job has been completed.

“It’s also good practice to chase money that’s owed to you. It doesn’t matter if you have cash in the bank or not. If you give an inch to some clients they will take a mile, especially in tough trading conditions where money is tight.”

Although he declines to reveal the value of his own substantial wealth, Pearson clearly knows how to look after the pennies. Since leaving school at 16 with four O-levels, the son of a Teesside solicitor has transformed Pearsons into a £16.1m turnover business that employs 60 staff. The Middlesbrough born and bred entrepreneur believes strongly in ploughing profits back into the business to boost its value and distributing spare disposable income across several investment pots to reduce risk.

Like many other cash-rich entrepreneurs, he’s made the odd mistake and even with around four decades’ experience in the industry, admits he’ll “still be learning the day I retire”.

He squirms when he recalls the painful day he apologised to a potential client simply for being raised on Teesside.

“When I told him I was from Middlesbrough I hastily added ‘but don’t let that put you off’,” he says. “What a fool I was. Later I thought: what have I got to apologise for?”

He believes his home town – once dubbed the worst in Britain – is beginning to throw off an inferiority complex that once shackled entrepreneurial activity. But figures show that old habits die hard – particularly among young people in the North East.

According to a survey of 16-30 year olds by the Princes Trust, 44% of young people in the North East think the odds are stacked against them, especially if they come from non-white, less well-off backgrounds. Almost two in five said they would like to start their own business but believe only the financially better off can afford to do so.

Less than 6% have gone into business, with just under one half (43%) citing high start-up costs as the biggest barrier. More than 70% believed that schools and colleges encouraged conventional careers rather than supporting aspiring entrepreneurs, while 82% of young people said their careers advisers never mentioned starting a business as an career option.

North East business leaders are working feverishly to change this gloomy perception. Terry Owens, the founder of start-up support agency Inbiz, believes unemployment, lack of income and a dearth of entrepreneurial flair are no barriers to a successful business venture.

He says: “Cash, confidence and credibility: the three Cs still hold today. People think they can’t start a business without money or entrepreneurial talent. It’s a fallacy.”

More often than not, people just need an injection of confidence and some training – then they’re flying.” After creating business advice firm Inbiz in June 1990, Wingate-born Owens has helped more than 22,000 start-ups. Only 10% have failed while 80% were still trading after three years.

His journey from school zero to wealthy hero resonates with Bannatyne’s “anyone can do it” mantra, regardless of background or academic talent.

Owens left school at 15 to become a car mechanic at Fred Dinsdales in Stockton before honing his sales patter at motor retailer Cowies. A quick learner, he went on to manage a main dealership and a car auction at the tender age of 23. A year later, with a wife and two kids to support, he chose to go self-employed and started selling cars from home before establishing The Used Car Centre at Thornaby. He also launched Dryden Insurance Brokers before selling up to a major plc in 1985.

After five years he founded Inbiz and the wealth that followed has allowed him to indulge in his long-standing love of classic cars.

His latest toy – a sleek, black Bentley parked up outside his leafy Yarm headquarters – is testament to his business drive, acumen and success. But Owens and many other entrepreneurs say they’re not that bothered by the money.

As Simon Pearson says: “Being an entrepreneur isn’t about making millions. It’s about learning, developing and challenging yourself in tricky situations.”

He concedes, however, that loads of cash is a welcome by-product.

“The North East has had some hugely successful businesses so it can be done,” he says. “In coming years I can see more people from the region attaining wealth on the scale of entrepreneurs like Duncan Bannatyne.”

Bannatyne would raise a glass to that.

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