Top business tips from Dragons' Den star Theo Paphitis
PUBLISHED: 13:48 28 November 2012 | UPDATED: 22:26 20 February 2013
Dragons' Den star, chairman of Ryman the Stationer and long-term Weybridge resident, THEO PAPHITIS is a firm believer that you have to learn the rules and play by them. Here he shares his top business tips
Originally published in Surrey Life magazine November 2012
Dragons Den star, chairman of Ryman the Stationer and long-term Weybridge resident, THEO PAPHITIS is a firm believer that you have to learn the rules and play by them. Here he shares his top business tips and why theyve been so phenomenally successful for him
1 Reduce the risk
Im a great believer that the risk should reflect the reward. My whole business philosophy is based on a risk-reward ratio. But its got to stack up. If it doesnt, you might as well go to a casino. If you think youve come up with the business idea to end all business ideas, there are just two things youve got to ask yourself: what are the risks and what are the rewards? I am the most conservative person you will ever come across, and thats because Im good at reducing risks while leaving the potential rewards high. One of the reasons Ive often bought businesses out of receivership is because you can automatically dispense with a lot of overheads.
2 Dont fool yourself
If you have a business idea, honesty is very important. Im fed up of hearing people say, everybody I have asked thinks my idea is fantastic. People say they believe in their ideas, but thats because they have conditioned themselves to believe in them. You have to be honest with yourself about what you are doing. Then you must ask yourself how commercial it is.
3 Learn to let go
Its very difficult for entrepreneurs to let go and sell a successful business. People sometimes hold on until the business has no value but you must learn to create something and then sell it at the right time. Thats really hard. I still find it hard! Youve put so much of your life, your body and soul, into something you have created and nurtured and then you have to let go. Admittedly, at times like now when theres not a great deal of cash around, you might prefer to wait and sit tight but the principle remains the same.
4 Know that cash is king
Cash flow is king. Profit is sanity. Turnover is vanity. A lack of profit is like a cancer: if it carries on for a long time it will eventually kill you. But a lack of cash is like a heart attack.
5 Embrace change
The retail environment is changing very rapidly at the moment, partly because of the internet, which opens up a vast world at the touch of a button. Internet selling means that you dont need to pay vast high-street rents and employ lots of shop assistants. You can eBay trade. You can have a lock-up and keep your products there. The internet has unshackled the business world.
6 Make decisions
One of the things I preach to all my staff is never be frightened to make a decision. If one of those decisions turns out to be wrong, then identify it quickly. Deal with it, if you can and if you cant deal with it yourself, scream as loud as you can so that your colleagues can hear you and ride to your rescue. Theres no shame in asking others to help you.
7 Start small
If youre an entrepreneur and want to start a business, start small on your own or just with a partner or assistant. Its only when you take on your first member of staff that youre more than likely to start encountering other problems. All of a sudden, youre managing people as well as the business. But remember, just because you have a good business idea that seems to work, it doesnt mean youve suddenly acquired staff-management skills as well. Legislation is now so watertight as well as being complicated and restrictive that you have to consider everybodys feelings and requirements.
8 Get your staff on board
In any business I buy, I get as many of the staff together as soon as possible. The first thing I ask store managers is who they think is the most important person in the business. Im never surprised by the answer, its always the same the customer. Not so, I say. Then they point to me. Wrong again, I say. Eventually, I have to tell them the answer and I point to all of them, the workforce. They are the most important people in the business. Motivating staff is not just about making them feel wanted. Tangible rewards are equally important, if not more so.
9 Capitalise on others ideas
Ill let you into a little secret despite having made a fantastic living from my business ventures, Ive never had an original idea in my life. Always remember that because something is innovative or cutting-edge, it doesnt necessarily mean its going to make pots of money. Many inventions that were thought to be technologically brilliant and seemed to have enormous merit never made their inventors a penny. Just as the road to hell is paved with good intentions, so the road to bankruptcy is paved with good ideas.
10 Turn your dreams into reality
We all have dreams and without dreams in business I dont believe you can be successful. The trick is to turn those dreams into reality. And you have to have passion for that dream. Its got to be something youre going to enjoy, otherwise its highly unlikely that you will achieve your goal. Making 100 million is easy. Making your first 1 million is the difficult part. If you can go to the pub and bore your friends senseless about your dreams, youre halfway there. But if you dont attempt it, it will never happen. Dont let your idea be the one that got away
- For more about Theo Paphitis, visit his website at theopaphitis.com or you can follow him on Twitter: @TheoPaphitis