An Interview With a Serial Entrepreneur

Lifting the WorldHow a man of average intelligence and with no special skills made millions from a simple business idea; real insight from a serial entrepreneur.

Intelligent Dialogue worked with LGH, training their sales people and hire controllers.Our MD, Diane Banister interviewed Bill Parkinson for this fascinating insight into building a successful business.

 

Bill Parkinson Lifting the World

 

Do you think business people are born or made?

I think they are born.

I think it’s an instinct.

After I’d started in business and I’d been in business two or three years, I met a friend of mine who I had served my apprenticeship with, fifteen or sixteen years earlier, and he said to me. “I always knew, I always knew you’d have your own business”

It had never been an ambition of mine, I was very happy, as a manager in a company, I was very satisfied with my career until I got sacked, and then that was my opportunity; I had the option then to start my own business.

I really think looking back that it was always in me.

I wanted to do it.

When you say an instinct… what does that look like?

You may remember the story from my book ( Lifting the World ) that when I was sixteen, I had the opportunity to buy old model Philishave razors, and I got Irene ( my wife ) and three of her colleagues, to buy these shavers for £2.50 each and I sold them for £5 each.

I was sixteen at the time, and I was one of thirty or forty apprentices. Not one of the other apprentices did that. There was something there. I spotted an opportunity to make some money which was there for anyone.

It wasn’t rocket science; it just seemed obvious to me.

This was an opportunity to make a few quid, so I did it.

So there’s an instinct but there’s also spotting the opportunity?

Yes – I had a printing business.

When I was 16 or 17, my mum bought me a little hand operated Adana printing press. Mine was 8 inches by 5 inches, so I could print a wedding invitation or a business card. I used to print, Irene and I were courting at the time, and she used to help me.

But that wasn’t enough for me, and I got the chance to buy an electric press. So I went for it, and I went into debt for it. I promised to pay the guy weekly. I was expanding, but the council wouldn’t give me planning permission, and I took them on, appealed against their decision, as a 17 / 18 year old.

Who the hell takes on the council when they’re 18, and I did, and I won the case. It became a cause celebre – the Daily Express carried the story.

So when you set up LGH, what were your ambitions for it? Did you have a business plan?

I did have a business plan to persuade the bank to lend me £2,500, which showed I would make enough profit in the first year by turning over £13,000.

That was the plan, I did a cashflow projection, a budget profit and loss account, and everything I projected for that first year came to fruition.

I exactly achieved, whatever I had projected.

There was a lot of luck in that, but it worked, and it convinced the bank that I knew what I was talking about. That was the limit of my ambitions. I never thought that it was going to be more than a 1 or 2 man business.

A solicitor I met at a party said, what do you do for a living, I said “I hire out lifting equipment”.

“You hire our lifting equipment, can you make a living doing that?”

“Well, I’m doing OK”

I did £13,000 in 1st year, £26,000 in the next year, £50,000 in the 3rd year, £100,000, then £200,000 £395,000 it was exponential growth, it was unbelievable.
It took me by surprise, it was such a narrow, niche business, that I couldn’t believe it, and then we started opening more branches, and that’s how we grew.

So it was a combination of knowing where you wanted to be at the end of year one and seizing the opportunity.

Exactly, I didn’t believe in 5 year plans, and I still don’t.

I think you can’t look too far into the future.

You can look 12 months ahead and plan for that, but anything beyond that, in my kind of industry is just guess work.

Just concentrate on your short term goals, and I also firmly believe in making your ambitions and your goals realistic. I didn’t start in business to become a millionaire. I started in business to survive the first year. In the second year, I wanted to do better than I had in the first year.

One step at a time, achievable goals.

It creeps up on you, all of a sudden you have a business that’s turning over £1,000,000.

It was incremental, I never thought too far ahead.

Another important thing was the decision making process. In business you have to make decisions all the time, some small decisions, almost incidental, some very very key decisions. I think it’s important to recognise the cross road decisions, the ones that really really matter. The critical decisions that will affect the rest of your life; who you’ll marry, your career.

I really took a lot of care, I recognised, I consciously recognised the important decisions. I recognised this is a key decision, this is a very important decision in my life. I have to get this one right.

So did you make those decisions differently?

It was a combination of instinct and logic. I said in one of the chapters, every time I bought a piece of lifting equipment, I was a gambler, it was a bet that I could buy it, and hire it out and get my money back.

That might be a very simplistic way of looking at my business, but in the end that was what it was about, and I recognised it, certainly on the bigger pieces of lifting equipment. I was making a lot of little bets.

One of the managers came to me and said “Bill, Jim’s mother’s died, and he wants time off for his mother’s funeral.”

We had no policy in place, what do we do?

I’ve got to make the policy. I recognise that this isn’t a casual decision this is policy setting, this will be set in stone in my company. This is the kind of thing I mean. It’s not a very big decision at the time, but in the scheme of things it becomes a very big decision when you have 550 employees, and someone’s mother is dying every year. Then, how do you deal with an aunty, a grandfather, or a step mother. So we had to make rules to deal with these. What I was good at, I think, was recognising the things that needed thought, and needed care and attention to detail and then I was prepared to define the policy.

You built a strong team from early on – was that luck, or are you really good at reading people, or are your recruitment skills incredible and you need to share them with the world?

People I hired originally were people I knew, neighbours and friends.

Once I met a guy running an It’s a Knockout competition, I was so impressed by his charisma and the way he had organised all these games, and the numbers of people and companies in the teams. It was a really complicated thing and he did it brilliantly. I was so impressed with him in his 20’s so I congratulated him on a great day, got chatting to him, and found out that he was out of work.

I’d never had a sales rep until then, and he had been used to selling industrial equipment, so I asked him to come and see me, and I offered him the job.

I think Gordon’s appointment was one of the best I made, and he appointed someone called Pat Fiscelli in the US, and that was another great appointment.
I wasn’t sure that Pat Fiscelli was the right person for the job, because he had run his own business, and I thought that he would want to set up on his own again. I advised Gordon not to take him on, but he was in the States, I was over here, and Gordon said he wanted him.

A lot of bosses, in that situation would have insisted on having the last word. I didn’t, I backed off, and I backed Gordon’s choice. He was the guy on the spot. I trusted him – I had given him a job to do, and it would have been entirely wrong of me to overrule him. I really thought he was wrong, but I wasn’t prepared to overrule him, by disappointing him. It was his choice, I had to trust him, and boy am I glad I did, because it was a brilliant, inspired appointment.

They were the two most charismatic great guys, and as a team building our American Business – they were irresistible. Those two guys going into a customer to sell our concept which was unknown in America, they were starting right from scratch.

People were saying “Why would we want to hire lifting equipment when we can buy it for $50 or $100?”

That was what we were faced with.

They sold the concept, it was slow at first, but we built a very strong business.

They had energy and an indomitable spirit; terrific characters. They could sell themselves and make us laugh.

They complimented each other so well.

Would you recruit someone who was self motivated or recruit someone and try to motivate them?

I would rather have someone who was self motivated. I think I did motivate people, but they need to be self starting.

You said that you recognised the importance of key decisions….

The devil is in the detail. A lot of my friends who are in business don’t deal in the detail, and are careless with the detail. They will always blame market conditions, that customers have let them down, and they won’t see that they have the responsibility to deal with the small but IMPORTANT details.

In the early 80’s Tom Peter’s In Search of Excellence was a revelation to me, it reinforced what I already believed in.
I’ve not tried to make money, I’ve tried to run a very good business. That’s always been my motivation. Making money has not been the driving force – only in as much as that’s the way we measure, net profit ratios, return on capital, that’s the way we measure, so it was important in that respect.
We wanted to keep cash in the business, because that was what would keep it going, retaining the strength of the balance sheet was essential.

We run a business simulation, where people run a business and draw up the profit loss accounts during the exercise – it’s a really powerful because they make profit but they have no cash. That’s a good lesson to learn; companies don’t go bust because they don’t make profit, they go bust because they run out of cash.

If you know the devil is in the detail, and the detail is important, how did you reconcile that with trusting people to do their job?

That’s a good question, a great question.

I think it’s very important that a Chief Executive shouldn’t have weaknesses. It’s not his strengths that count; it’s the absence of weaknesses.
If you have a weakness it will catch up with you, it will find you out.

So, I’m an engineer, not a very good engineer, if I was, I’d be in the workshop inventing stuff. If I was a great sales person I’d be out on the road all the time selling, and may be neglecting the technical or commercial aspects.

My strength has been the absence of weaknesses. I am as comfortable talking to lawyers, bankers, insurers, customers, engineers and employees. I think you need to be rounded, rather than having terrific strengths.

I employed much better engineers than I’ll ever be, but I had an understanding. If I had to strip down a machine, the lads on the floor were much better than me, if I needed to calculate what size of beam we would need to support that roof, I could do that.

The one thing I thought I was very good at was dealing with customers on the phone. The first 2 or 3 years, that was what I did. I would leverage the order, because I knew what he would use the equipment for, and I would suggest other things they might need. By the time he’s come off the phone, he had placed an order twice as big as he had intended to. I was good at that.

But then the phone was so busy I couldn’t do it.

So I had to train people up. I used to take them in the workshop and show them the equipment, so that they would know what it did and how they worked.
I used to coach them, and they became competent in the role, and I was there in the background if they needed me. I had to accept that the very high level that I had set was no longer possible. So I had to accept that instead of converting 99% of enquiries, we’d have to accept 95%. But that was a lot more orders than I was going to convert by myself.

That was the only was I could grow the business by letting go.

When you employ branch managers, that is the tough one. The really tough one – they’re a hundred miles away. I want them to run the business like I would run it, but the truth is that they didn’t. I had to accept that.

That’s when I started to make rules, that the business would be run by.

There’s a story I tell in the book, when I realise the spelling on the letters going to customers was poor. So, I created a series of manuals, customer letters, model letters for each branch to use. I defined what the type face should be. I started to control it more closely.

The branch managers at that time were very entrepreneurial. These were guys who were strong characters, go-getters. I had to rein them in a little bit, and be clear that the signs on the building had to be LGH green, and the sign has to conform to our defined standards, and your letter writing has to conform to those standards.

How big were you at that point?

5 or 6 branches, probably doing a £1million turnover, 6 or 7 years. I really recognised branding as very important, I was so proud of our logo, and how recognisable it was. The 3 hook logo at that stage was the most recognisable in the lifting industry at that stage. It became a very strong symbol. That green colour was very recognisable – I could spot one of our lorries from half a mile away on the motorway. Branding matters.

How long did you stick at something without giving up?

My book has a whole chapter devoted to failures. Look at the Golf Course, I stuck at that for 8 years, and lost £1million in that venture before I gave up. I tried everything I could to make that work and make it profitable. I couldn’t think of anything else I could do.

So there’s a tenacity – you’ll see something through?

I think I’m very tenacious. I lost £1million in the brewery in the first 7 or 8 years. I lost money. The brewing industry is more susceptible to the vagaries of political decision making than any other industry. The duty levels, the competition rules, the number of pubs a brewery can own, are all politically motivated decisions.
I bought it in 1985 by 1991 or 1992 I had lost £1million.

Then a law was passed known as “The Beer Orders”

The beer orders said that breweries were monopolising not only the manufacture of beer but also the distribution and that was wrong. So the government said no brewery could own more than 2,500 pubs. Some of them owned 8 – 10,000 pubs. Completely dominant, and breweries like mine couldn’t sell one of those. This revolutionised the industry.

They also said, whatever pubs you do own, you must allow guest beers to be sold. So that opened the door. In the 5 years after that was passed, it totally transformed the business, and I got back the money I had lost and it became a very profitable business.

The only option I had was to trade through the situation, to keep grafting away and hope something happened, and it did. I was very fortunate; if the Beer Orders hadn’t have happened, we’d still be struggling away.

Would you do it all again?

Like a shot. I’ve been so fortunate to do what I’ve done, to have Irene supporting me; I’ve loved every minute, and I’d do it all again in a heartbeat.

 

About Bill Parkinson

Being born during the war of Lancastrian working class parents and subsequently only managing three ‘O’ level passes, was not a promising start for Author Bill Parkinson.

He served a mechanical engineering apprenticeship and got a taste for business by running his own printing enterprise as a teenager. After a spell working for glass giant Pilkington he became a branch manager for a firm of lifting gear engineers in Manchester. Following a takeover he was sacked just before Christmas 1969. This turned out to be the best thing that ever happened to him as he was prompted to start his own business hiring out lifting equipment.

Despite having no capital to start with, he built this into the biggest company of its kind in the world, employing over 550 staff in the UK, Holland, Germany and the USA. He pioneered the use of computers in business and started or acquired many small businesses in a variety of fields.

In 1985 he achieved some notoriety when, after trying a pint of Moorhouses beer in a Preston pub, he went on to buy the brewery, which prompted a short media frenzy in which he was described as ‘the man who liked the beer so much, he bought the brewery’.

The story of his phenomenal success is fascinating and heart-warming and is sure to be motivational to would-be entrepreneurs the world over. He is married with three children and four grandchildren and is a keen golfer. Despite his busy family and business commitments, he still finds time for regular visits to his local pub (The Pendle Witch in Atherton, which he owns) to play dominoes and pool with his mates.

Read his book Lifting the World – A highly readable and fascinating insight into the realities of being an entrepreneur.