RSS feedsLike many things in life, their relationship isn’t a marriage made in heaven but an uneasy union borne of commercial necessity. But the two aren’t as unalike as you might think. Both are masters of risk and, on a day-to-day basis, both weigh up risk versus return, making decisions based on financial value.
Entrepreneurs aren’t maverick risk takers, prepared to gamble it all for potential profit. Real entrepreneurs have to be risk managers. You have to be able to weigh up risk and return, often intuitively, and decide very quickly what will be a profitable enterprise or a drain on financial resources. And this is something that I have always had to balance as an entrepreneur.
At the end of 2007, Daisy was awarded £5m interest free funding in the Bank of Scotland Corporate Entrepreneur Challenge. This money was awarded so that the company would go forward and consolidate the fragmented telecoms market in which the company operates and position Daisy as an alternative to BT for small/medium-sized businesses. To be able to convince the judging panel the £5m would be best spent on this acquisition strategy, I had to present Daisy’s successful track record, the clear vision that we possessed as a company and our ability to execute a business plan.
Many financiers had been burnt with the burst of telecoms bubble in the early nineties, and it left many cautious of the exposure to risk that this market could potentially harbour. At Daisy however, we knew that the market had recovered and learned from the initial boom, plus we had always been cautious to acquire firms that matched our own objectives and had robust business processes in place.
We were aware of the concerns financiers had about technology companies so it was important that I could address any skepticism surrounding this. A stringent approach to business and financials was important, as was an entrepreneurial and adaptable outlook.
By highlighting the size of the opportunity to the judges, while explaining how the risk was mitigated, I was able to secure funding.
Managing risk has been something I’ve had to be aware of since the company was established. In fact the first six months of the business’ life were spent gathering feedback from potential customers, writing a business plan and putting in place the foundations that have helped facilitate our growth. And it is that preparation, as well as attitude towards risk, that has resulted in Daisy’s strong and successful history.
We were number one in the Sunday Times Tech Track 100 awards in 2005 for an annual growth of 486%. Daisy now provides solutions to more than 30,000 SMEs, an increase of 100% in customer numbers in just 12 months, and is on track to hit £55m turnover next year.
However, the success of the company has also got to be attributed to the strong team that works alongside me. I have, for better or worse, been given advice and gained funding from a whole host of advisers and financiers – all of which have been granted based on judgments about risk.
But I have always countered any irrationality in decision making by presenting the cold hard facts.
You can’t argue with the facts and that is how I have taken my business to where it is today. Facts, figures, turnover, research – all these things are as central as entrepreneurial endeavour, creativity and business acumen.
This approach to business has led to success. One recent success was winning four days mentoring from Sir Philip Green in the Entrepreneur Challenge. It was a real eye opener. Sir Philip is good at spotting opportunities, good at delivering and has a great team in place. This serves his business well. He also has a first class grasp on risk and return.
Almost instinctively, Sir Philip knows where to seek out and maximise profits, but his intuition is backed up by a first class team of employees and professional advisers. Sir Philip is one of the greatest risk managers I have ever witnessed. A great example to entrepreneurs and accountants alike.
Matthew Riley is CEO of Daisy PLC, which has been named the North West’s fastest growing company by Deloitte
