Michael has had an interest in entrepreneurship from his teenage years. During his A Levels he proposed project to a local shopkeeper. Here he organised a project to change the layout from the old fashioned counter service to self service over a weekend.. The shopkeeper was an ex KPMG member and supported Michael in getting his foot through the door at KPMG. Michael qualified as an accountant with KPMG. He soon left because the corporate culture did not suit him. During his time there he showed initiative early on by highlighting inefficiencies.
He soon started work for an Arab Entrepreneur at Gulf Development. Here he worked alongside the likes of Lord Patton - who was one of the Board Directors. One of his projects was acquiring a stately home in the UK. This was also one of the first privatisation projects in the UK.under Margaret Thatcher. At the time the UK State was in possession of considerable number of stately homes. They were offered to the state as part payment for death duties/ Inheritance tax. The value of the property jumped from about £786,000 to £5.2m within 24 Hours of ownership following an insurance assessment.. They converted the home into apartments, opened it to the public and attracted 7,000 paying visitors. Michael moved on following a disagreement with his employer soon afterwards.
Coffee is King
Michael soon joined ACS Coffee Service. Their business model was based on giving away the coffee machine for free for the duration of the contract. Then selling the client the coffee filters, powdered milk, etc. in the 1980’s. They were part of a FTSE quoted spectacle manufacturer company. Which had a portfolio of businesses. Part of the portfolio was a catering company. Which owned the coffee company Michael worked for. This small coffee business was the Cash Cow of the whole portfolio. The spectacle manufacturer was soon taken over by a larger company and then sold on again. Eventually, it became a part of GKN. Michael decided to leave at this point and build his own coffee business.
He felt he had gained enough sector knowledge. He also understood Sales was his weakness. So he worked on building strategic alliances with third parties. Together they would then bundle his coffee offering as part of their product offering to their existing clients. He decided to work with Stationery suppliers. He felt they already had access to businesses and by working with them he could access their existing clients. He used event marketing and organised a stall at annual stationery industry event. It made him £85 in revenue during the first 4 months ! He had not done his market research. The research would have shown stationary firms don’t sell to their customers. They only take orders for products in their catalogues. So the concerns for Michael should have been focused around how to get into their catalogue !
One day Michael received a phone call from Oxfam who were starting Fairtrade coffee and were using a name similar to his brand. They needed his permission and consent to safeguard themselves against trademark infringement. Michael happily gave them permission. Soon afterwards he received a phone call from Viking Direct. Their chief buyer wanted to meet Michael. This is was the moment he had been waiting for. He took all the corporate literature he could. He also broke down his service offering into 3 different price points. This meant he could decide which price suited them best. It also allowed Michael to generate a bundle to suit them. This is a common selling technique.
It appeared that Viking Direct were happy to accept any price Michael was going to offer. So he quoted them a price above what he had in mind and they happily accepted. On his way out he found out that they had already included his products in their catalogues. So they were happy to accept any price he was going to offer ! They also agreed cash payment of the invoice within 7 days on delivery in their terms and conditions. This meant if Viking Direct received the goods on Monday. He would receive the cash payment the following Monday minus an early payment discount. So within one year. Michael had built a going concern business. He acquired a large client. This client would place an order once a week and Michael would receive payment the following week at above his standard rate. He soon sold the business for shares to another company.
Michael soon joined a US based NASDAQ listed software company in the UK. He worked as their Finance Director for nearly four years. The company had an interest in developing their people. One of their features was to help their people succeed.
One way to build key accounts/ co creational accounts is use the tendering process. Tenders are high value contracts for the business. Here when a business is looking to buy a software platform, for example, they will use tendering as a process. This allows them to match bids from interested suppliers on a competitive basis. Michael feels there is no standard tendering document. Chances are previous suppliers will have helped to write the tender. This means the tender will inevitably be written in favour of the previous supplier. This also means you could have the best response and still lose. The underlying trick is to look for ways of lowering the headline figure without the quality suffering. One way to do this is by separating the must have items from the nice to have items. And pricing them at a different rate.
Michael’s software company lost a tender for working with an Insurance company. The insurance company had accepted the lowest bid. Yet, Michael later found the successful business could not service the contract. The project failed. This is a common experience.
Michael has fond memories of the occasion when he changed the terms of the agreement to make the sale. Here his company could not support a client company because of the penalty clauses in the contract. They could not recognise revenues till the clauses ceased to be effective. They also had to declare restricted revenue items. This didn’t suit Michael’s company. So he allowed the client company to use the software for free for 18 months. If they still wanted it they would then pay the full contract value without any penalty clauses.. The clients used the software for 18 months. Then paid the £1.3m outstanding without any penalty clause restrictions. He was then fired for training and mentoring the new CEO for the EU !
NTL - netchannel
Michael came across the netchannel project. He was interviewed by Hermann Hauser and joined the netchannel team. They were building the first internet based TV platform. Here he working alongside Ann Glover - who set up Amadeus Capital afterwards. She was responsible for the UK side of the business. While still settling into the role the US arm proposed to separate the software side of the business from the platform. He joined this new side of the business. The UK arm of the business was again sold onto Virgin Media. Michael’s role was to help transition the business into NTL. They fired him after this process was completed. The US side of the business was sold onto Motorola.
Dotcoms and Onwards
Michael teamed up with his US net channel counterpart to support dotcom businesses. They helped to set up european operations of US dotcom businesses. This allowed the dotcoms to increase their IPO valuations by having a greater global presence.
Soon after the dotcom bubble burst he joined another NASDAQ listed software company. As the Finance Director he ran the back office for 9 countries from London. Here he had to close 3 offices. The office in France stood out in terms of complexity. The French system favoured the staff. The US based company was from an environment that favours the corporation. He had to juggle this inevitable clash. He managed the process to all parties satisfaction.
Since then Michael has helped Entrepreneurs and SME’s as a Solopreneur. He likes to see himself as a Swiss Army Knife for Entrepreneurs. This means his support covers organising shareholder agreements. Business Plans. HR Activities. Business Mentoring. And, pretty much anything else they need. He has worked with over 50 startups and SME’s and some of his key thoughts are below.
Common Entrepreneurial Concerns
“A little knowledge is a great thing” it goes a long way.
- Isolation of the Entrepreneur. They have nobody to talk to. So problems can fester and lead to misinterpreting what is really going on. Talking to employees is not an option.
- Part of the concern for many Entrepreneurs is that they are experiencing problems for the first time so they are uncertain with how to deal with them.
- Knowing enough to define the problem helps when dealing with professionals - Always ask for a fixed quote !
- Lack of time. There are so many activities going on at the same time that Entrepreneurs have to delegate (within reason)
- The need to systemise the business. More importantly the need to follow the system themselves.
- Cash really is King - A sale is not a sale until the money has been received in the bank
- Be prepared to say ‘no’ if it doesn’t fit what you want to do – You don’t have to do deals you don’t want to
- Don’t take ‘no’ for an answer !There is usually a workaround to everyone’s advantage somewhere
- Don’t personally guarantee anything – Why? If your business fails you are have to pay
- Do your research – Just because you think it is a ‘great idea’ doesn’t mean it is. You could be wrong.
Michael is currently authoring a second edition of his book - Take the Plunge. He has supported Entrepreneurs via the Cass Business School Startup Clinic. And he is constantly working with Entrepreneurs under the eFactory brand.