Management strategies: the big risksNatWest Business Builder: Building a growth mindset30th Aug 2021
Being in business means taking risks, but how do you assess them and what’s the payoff? Four entrepreneurs reveal their biggest gambles.
“I turned down half of our business revenue”
Pete Campbell was just 25 when he started his PR and SEO business Kaizen in London. Within 18 months the business was turning over £250,000 and employing five people, with half of that revenue coming through the agency’s white label SEO services. And then everything changed: Pete decided to stop offering the SEO service that had been so valuable to the company.
“I was basically helping other people grow their marketing agencies rather than building my own empire, and I’d started the business to become a leader in the Digital PR SEO space in my own right,” says Campbell. “Also, our profit margin on direct clients at the time was circa 30% versus 10% on outsourcing. I decided we could double our day rate to make up for the potential revenue loss we’d face in the short term.”
What followed next were some “awkward” conversations between Campbell and his clients and a company strategy day where he outlined the business’s long-term vision to the team. The risk paid off: “We actually recouped our potential loss in three months and exceeded our initial revenue targets.”
Today, Kaizen employs 21 staff members, and projects a £1.2m turnover for 2018. “I can trace this increase back directly to the risk I took three years ago,” says Campbell.
“I sold my house and set up a factory”
Within three years of launching Nim’s Fruit Crisps from her London home, Nimisha Raja’s fruit snacks were being manufactured in Hungary and stocked in Harrods, Selfridges and Planet Organic. Yet despite the success, Raja was ready to give up the business and cease trading entirely.
“I started to get the odd complaint about the crisps being soft so I monitored it and decided that the products were not consistent and the quality not always as good as I wanted,” says Raja. “Plus, the cost of third-party production, packing and distribution were just not viable given I wanted Nim’s to be an affordable healthy snack.”
After some deliberation Raja decided to keep going by selling her house and setting up her own factory in Kent. “I met someone at a trade show who told me that Kent Council were great at offering grants to manufacturers, I then spoke with a friend of mine who said he’d also invest in the business.”
It was the right move. Raja has since secured deals with Tesco, Co-op Food and Ocado and now exports to 11 countries. She remains cautious, however. “By setting up the factory, everything I’d ever worked for all my life was at stake – and to some degree it still is!”
“I can trace this £1.2m turnover back directly to the risk I took three years ago”
Pete Campbell, founder and CEO, Kaizen
“I joined a UK start-up from Canada”
Serial entrepreneur Sarah Botham was living as a temporary resident in Canada when a former colleague offered her the role of chief operating officer at Reconfigure.io, a recently launched cloud computing company based in the UK.
“It was a risky position to be in at the best of times,” she says. “I had no safety net if Reconfigure.io were to fold, only some depleted savings. On the other hand, if I were to keep my job with a Canadian company I’d have had access to healthcare and all the other good stuff most people take for granted.”
Having worked with the firm’s CEO at a previous start-up, Botham decided the risk was worth it and joined the firm remotely in 2017 as one of five co-founders.
“I knew right from the off that I wouldn’t take home a lot of money in the first year. I worked full time, on a very part-time salary, and made up the rest of my budget with my savings. In the first year I took home less than £10,000.”
Currently in beta, the tech company is growing steadily and the team hope to raise £1.5m by the end of 2018.
“Your job should never just be a job, it should support the kind of lifestyle you want,” says Botham. “If I was too worried about what I could lose, I wouldn’t have had a very interesting life by this point.”
“I risked everything to go on The Apprentice”
Joseph Valente was just 22 when he founded his plumbing business, ImpraGas in 2012. Three years later he joined the 11th series of Lord Sugar’s TV show The Apprentice, and was told he’d have to leave his firm completely for up to nine weeks.
“Everything was at stake,” says Valente, whose business employed seven people and served 2,500 clients at the time. “My business, my relationship with my team, my pride. But part of being an entrepreneur and business owner is knowing when you need to jump, when the right time to take a risk is and when to measure out if it’s worth it.”
Valente’s self-belief paid off and he went on to win the show and the £250,000 investment from Lord Sugar, helping propel ImpraGas to a turnover of above £2m.
“First and foremost, risk is essential to building and growing a business,” says Valente. “Create a name for yourself as an entrepreneur who takes risks by staring fear in the face, and doing the things your competitors aren’t willing to do – that will grab the attention of the people who can support you.”
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