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In the first of a six-part series, Fort William businessman Angus MacDonald offers advice on starting your own business, and why living in the West Highlands is no barrier to success.
Starting Your Own Company
A measure called Total Entrepreneurship Activity (TEA) shows only 6.3 per cent of people in Scotland are engaged in some sort of entrepreneurial activities versus 9.3 per cent for the UK as a whole, and 17.4 per cent in the US.
We have a huge public sector and a long tradition of educating professionals. Our Scottish doctors, lawyers, accountants and engineers thrive all over the world, but it is successful companies employing well-paid people that countries need to generate the serious tax revenue.
Wouldn’t it be wonderful if a young reader of this column would go on to create a world-class marine science, renewable energy or food business based in Mull or Ballachullish? It can be done in rural Scotland, after all Baxters Foods of Fochabers employs 1,500 staff and Walkers Shortbread on the Spey River has 4,000 staff.
What is it that makes people want to get their own business off the ground? You may know someone who has made a success of care homes or a tool-hire business. You might have read an article in the press of a bakery that sells artisan bread and has just sold to a multinational. Or you may work with a colleague and the two of you see that great once-in-a- lifetime opportunity that you would be mad to miss out on.
While making ‘serious’ money is definitely a driving force, it is really a by-product of creating a high-quality, respected company. Billionaire Frenchman Bernard Arnault, who built up Louis Vuitton Moet Hennessy, said: ‘Profit is a consequence of what we do well; it should never become a goal’. If the product is right, you employ great staff and your customers love you, if you have the disciplines of sound corporate governance and a well-run finance department, then your chance of making a proper capital return is certainly high.
I have had my own business since I was 26, and loved every minute of the adrenaline highs and lows. I adore work, it is my hobby…a two-week holiday is a week too long. Sad, eh? I devour stories about business and read every business biography. I take every opportunity to speak at schools about entrepreneurship. I look with pity at those who have a corporate career because it’s so exciting to mould a business, to choose your colleagues, to work on the strategy and make it succeed.
Having no capital is good at the outset: much better to take your first steps as a window cleaner than borrow big money. Your first business failure is just a lesson, expect it. And don’t expect that brilliant invention — we can’t all be a James Dyson. My tip for wannabe entrepreneurs is plagarise: pinch other people’s ideas and do them better.
I’m often asked what are my top tips for aspiring entrepreneurs. Definitely read the business pages, tear yourself away from emails, social media and go and see people, use the telephone. Be hungry for information. Find a mentor or two in the industry you want to go into, work several hours a day more than others and chat to every business person; they will be surprisingly receptive.
These days you need to think big. You really need to have more than 10 members of staff and sales over £1million pretty quickly because there is a real problem with starting up your own company, and that is the frightening level of bureaucracy. When you have employees you have National Insurance, PAYE, NEST, holiday and sickness pay, paternity and maternity leave, health and safety, employee liability insurance etc. to worry about. It seems you need to be an accountant and human resource expert as well as an entrepreneur, a rare combination.
Start-ups cannot afford proper office back-up with the result that sole traders who like to ‘be on the tools’ rather than at a desk, avoid the hassle of hiring trainees, resulting in a huge shortage of home-grown tradesmen.
Being based in the west highlands has its extra challenges: often poor internet, high travel and shipping costs, and lack of staff with the skills you may need. That said, it’s getting better and I know of several multi-million pound plus revenue businesses around here. The businesses I have run have made 90 per cent of their revenue outside Scotland, so lots of travelling time but living in an area with an unparalleled quality of life.
Of course there are risks in starting your own business, but it can offer huge rewards in so many ways. I cannot recommend it more highly.
Angus MacDonald has built significant businesses in renewable energy, recycling, online education and publishing while based in the highlands.