Over a quarter of business owners began their journey on a ‘shoestring’ budget according to a recent survey. We take a look at five of the most successful entrepreneurs in the UK.
5 successful self-made entrepreneurs
Lord Alan Sugar
After saving up £100, Lord Alan Sugar bought a van. With this van, he began to sell car aerials and other electrical products. Today Alan Sugar’s fortune is estimated at £900 million. He is one of Britain’s most successful entrepreneurs after founding the electric company Amstrad, Sugar now hosts the well-known BBC TV show The Apprentice.
Sir Richard Branson
He calls himself ‘the self-made entrepreneur.’ Starting with just £300, Branson created a student magazine, which later featured the likes of Mick Jagger and R.D. Laing, he then found a mail-order record company. As the year passed he managed to open his very first store on London’s Oxford Street, known as Virgin Records, and that is where Richard began the long-tail journey of Virgin. His estimated fortune sits at a very comfortable £3.6 billion.
This British property entrepreneur originally had to borrow £100 to buy a one bedroom conversion in Woking. In 1981, at the age of 21, Jon and his friend Anthony Pelligrineli found Foxton’s a well-known estate agency dealing with both lettings and sales. His fortune is now estimated at £1.07 billion. Pelligrineli put £30,000 into Foxton when it was first found by the pair.
Charles began with just £6,000 which he had saved from his previous job as a sales executive at NEC. Whilst there, Charles discovered the potential of mobile phones and what they offer. Although at this time mobile phones were only really purchased by big businesses and organisations, he knew that in the future they would become massive, and we are not talking about the size! At the time, mobile phones were not easily accessible to the public, so from this Charles created the Carphone Warehouse. He now has an estimated fortune of £1.49 billion.
Tom Singh OBE
The well-known fashion retailer, New Look was first discovered by Tom Singh back in 1969 after he loaned a small sum of £5,000 from his parents. New Look rose to become the third largest women’s retailer in the UK, behind international brands such as Next and Marks and Spencers. Singh now has over 1,000 stores worldwide, with his footwear being the second largest women’s retailer. The OBE’s estimated fortune is £350 million, which makes the £5,000 look like 5p!
You would think a business needs a large budget to begin, but it seems many are proving that assumption wrong. A poll of 241 business owners found that more than one-quarter started their business on a low budget of £1,000 in the first year. 24 per cent used less than £5,000 and only 6.7 per cent used over £100,000.
When it came down to finding the funds, the research (by Shell LiveWire) discovered that nearly three-quarters of entrepreneurs dived into their personal savings, a further 30 per cent borrowed from their family and friends and only 10 per cent carried out a bank loan (find out here why SMEs are avoiding their high-street banks). Just under 5 per cent developed their funds from crowd-funding or re-mortgaging their homes.
One third of business owners who started up last year had an overall household income of £25,000 per year, that’s an average of just over £2,000 a month. 7 per cent of the new business owners lived or still live in houses provided by the council and other organisations. This figure has doubled since 2009 which indicates that business owners are not going to depend on their homes to provide a start-up capital.
Are you in this alone?
Whether we’re down in the local pub discussing our future over numerous beers and bottles of wine or watching the soaps at home, friends will always discuss a crazy plan to start a business together and an impressive 20 per cent of the business owners surveyed made that dream come true. More than half of the UK business owners who responded to this poll started their business on their own, whilst only 7 per cent began with a partner who they did not know beforehand.
Opinions have shown that most business owners would recommend partnering up with someone. Working with a partner not only provides a friend it also provides access to support, double ambition, a stronger passion and a wider set of skills and knowledge. If you are interested in starting a business check out our top 20 tips for start-ups.
As well-known as it is, UK SMEs are very valuable, there are approximately 5.2 million businesses in the UK and SMEs cover 99 per cent of all firms in the private sector. Just over 3 million of all UK businesses are sole traders. The need for small enterprises is crucial, therefore their demands and needs are also a priority and the government has recently set out a target to increase the amount of money that goes back to SMEs. Hopefully by 2020 the amount will increase by 28 per cent (from 78p to £1).