HOW I ... is a column in conjunction with the Entrepreneurs’ Forum that looks at the gems of advice shared by our top entrepreneurs on dealing with issues in their daily lives. Each column explores three different takes on an issue.
How I ... Dealt with the bank
Gary Thompson, of Gateshead innovation company C2M UK Ltd
“I think my biggest challenge when I was starting out was overcoming negativity. For example, most financial institutions claim to believe in supporting innovative entrepreneurs, but the truth is often far from that.
“Most banks often ask for information that you could not hope to have unless you have already been in business for years. It’s a shame, but my bank manager told me they were not venture capitalists and everything had to be guaranteed.
“I wouldn’t have minded, but I wasn’t even asking for finance, just dropping off my business plan for them to review. I soon moved to another bank who actually liked my ideas and they could get new clients from working with me.”
Louise Allcroft, of DNA testing business Complement Genomics Ltd, of Sunderland
“The biggest challenge we faced in setting up the business was that it was so bloomin’ expensive to get started! Some items of kit we’ve got in the laboratories cost as much as £110,000, and not that many people have that amount of cash swimming around. We certainly didn’t.
When we started, though, we didn’t want to sell god-knows-what percentage to some wonderful venture capitalist who was going to tell us exactly what we were supposed to be doing. The whole point of our business was to do what we wanted, to achieve our goals – and not those of a VC. We had a vision of what we wanted to achieve and we wanted to do it our way.
We got around the financial challenge by getting a loan via the Small Firms Loan Guarantee Scheme through our bank and what was then the DTI. That allowed us to pay for the kit, get the staff in place and allowed a bit of working capital for the first year or so.”
Lynn Gate, The Storage Company Ltd, a storage business off the A1(M) at Newton Aycliffe
“I was offered a job as a manager in a shop-fitting company which wanted to set up a retail business in Newcastle. After eight months, one of the directors left. The chairman of the company only knew about manufacturing; he wasn’t a retailer at all. I was offered the opportunity to buy the retail business for £45,000.
“I knew that by buying the business I would be on the road to controlling my own destiny, and I knew there was a fantastic opportunity. I was 26, lived on my own, but I had a house with £1,000 equity in it. So I went to the bank, saw a very friendly bank manager at Nat West, and he said he would support me. He must have liked my drive and enthusiasm I suppose!
He lent me £25,000 equity on the back of the £1,000 equity, and then I borrowed the other £20,000 from the company I was buying off, and paid them back over 12 months. Away I went.”
For more How I … tips, go to www.ifwecanyoucan.co.uk , which is inspired by the Entrepreneurs’ Forum.
