Entrepreneurs

Very few business plans survive their first interaction with the real world,’ says Luke Johnson, whose own ventures have ranged from Pizza Express to fresh fish distribution and the UK’s largest chain of dental surgeries. ‘Entrepreneurs have the advantage that they can adapt swiftly — “pivot”, as they say in Silicon Valley — to satisfy real demand, or improve their product and its distribution. Bigger companies find it much more difficult to change course in that way. ‘I’m a great believer in incubating a business quietly: pivoting it until the model works. Maybe I’m unconventional, but I believe raising money too early — through crowdfunding, for example — can be a dangerous thing.

Maybe it’s a sandwich chain, or a price comparison website, or a bioscience breakthrough: but the start-up was your baby, and you’ve worked night and day to prove its potential. Now it needs capital to go to the next level — and you need liquidity for family needs, as well as a plan for long-term exit. Who do you turn to, and what questions should you ask? Earlier in this series, Julian Cooper of Julius Baer told us that entrepreneurs need to think well ahead — and ‘meet the right people, the right lawyers, the right potential investors’. Simon Ward is a lawyer with Farrer & Co who acts for businesses backed by venture capital and private equity.

James Espey was born in Zambia and educated in South Africa before moving to London in 1977. For many years he worked for international drinks companies, developing brands such as Malibu, Baileys and Johnnie Walker Blue Label. For the past two decades he has been an entrepreneur in his own right, as well as a mentor to others. He is a client of Julius Baer, which is also a sponsor of The Shaw Mind Foundation, a charity founded by Adam Shaw and James to support mental health sufferers and their families.  James is the author of Making Your Marque, subtitled ‘100 tips to Build your Personal Brand and Succeed in Business’ — and he has an aphorism for every aspect of starting and building a business.

All would-be entrepreneurs are told that ‘most start-ups fail’. A popular factoid from the US says nine out of ten new businesses don’t survive. UK statistics are more encouraging, but not spectacularly so. Here, surveys say roughly four out of ten new businesses live to celebrate their fifth birthday. Some sectors have higher survival rates than others, but whether your entrepreneurial vision is to make hats, cakes, apps, medical devices or space rockets, survival through infancy is your first challenge. You’ll have to risk your own savings and persuade family or angels to provide capital that will allow you to perfect your product and bring it to market — while praying no one else comes up with a better or cheaper product in the same field.

There is much talk today of the enthusiasm with which young entrepreneurs are setting up businesses. One reason why this appears such a daring development is that the industrial revolution changed our thinking about jobs and work so radically that ‘big business’ seemed the only form of honest employment. Before that, going it alone was the norm. Classical Athens was a prime example, though one would never think it to read most accounts of the subject.