Welcome to the second series of Small Business Snippets, the podcast from SmallBusiness.co.uk. Today’s guest is Jenny Campbell, a businesswoman, investor, speaker and former Dragon.
We discuss tips for investment in the time of COVID-19, exit planning and whether your business should still be accepting cash.
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Hello and welcome to Small Business Snippets, the podcast from SmallBusiness.co.uk. I’m your host, Anna Jordan.
Today we have Jenny Campbell, businesswoman, speaker, investor and former Dragon. Rather than going down the traditional education route, Jenny left school at 16 to become a cash counter and cashpoint filler.
She worked her way up in the banking world and by the age of 23 she earned her banking qualifications and a Chartered Institute of Bankers prize.
Her first taste of running a business was when she bought RBS-owned cash machine firm, Hanco, which she rebranded as YourCash Europe. At the time, Hanco had expanded too quickly and was making a loss. The company underwent a major operational restructure overseen by Jenny. In 2016 she sold the business for £50m.
During her time on Dragon’s Den, Jenny invested in companies including Didsbury Gin, Look After My Bills, Driven Media and Carun UK. These days, she is the vice chair of the Prince’s Trust Enterprise Fellowship Programme and supports the Young Enterprise and the New Entrepreneurs Foundation.
She’s also a dog breeder and an accredited breed judge.
Anna: Hi Jenny.
Anna: How are you doing?
Jenny: I’m really good, thank you. Really good.
Anna: Great. OK, let’s get cracking.
One of your mantras is to live by corporate standards but breathe like an entrepreneur. Tell us a bit more about what you mean by that.
Jenny: Yeah, that really came out of the time when I was taking over the cash machine business then owned by RBS. I found the business to have got enormous growing pains [from] when it was incorporated in 2000 and sold to RBS in 2004. It had grown enormously fast and it did have an impressive customer and asset base, but it had grown up on very simple – if any – policies, procedures, people, codes of conduct, etc.
So, the business I came to in 2006 was in quite a lot of chaos, to be honest. But I found that all the skills I’d learned over my banking career, which you don’t really appreciate at the time, but I could apply them to this business, particularly around change management, turnaround scenarios, risk management, process mapping – all those corporate things. I could apply them to this business and that’s what got me through the first two years in getting it ship shape.
It was losing a lot of money at the time and by the time we got two or three years down the path it was breaking even and that lead into the management buyout.
On reflection, when it came to selling the business, before that even became a management team buyout, I said to RBS, ‘Look, you’ve helped put the corporate procedures into this business but it now needs to have its entrepreneurial wings in order for it to be nimble and compete against its competitors in the UK.’
It’s important for a business of that size to have corporate standards, but it also needed to be nimble in terms of decision-making and innovation and product development, which we weren’t at that stage by still being part of a bank, due to how bureaucratic that can be in a big corporate.
How do you introduce ‘entrepreneurial wings’, so to speak?
Jenny: Start with the people. One of my big transformations was the people – the quality of the people, the culture of the people. I turned over a lot of people in the early days, those who didn’t have the right skills or attitude to drive the business forward. I created a real people culture in the business: work hard, play hard, lots of rewards for delivering performance, lots of fun as well.
And the ability for the staff to feel they had their own initiative to drive the business forward [was important]. You could always put your hand up to suggest this or get on with doing things and mistakes were made – you wouldn’t get berated for that – it was, ‘Get up, you’ve grazed your knees, let’s move on’. It was a real ‘can do, will do, want to’ attitude in the business and we lived it and breathed it from the top, right the way down.
On your time in Dragon’s Den, perhaps it was clearer that you’d come from this corporate background and moved up in the banking world, as opposed to starting up a business from scratch like some of the other Dragons and the other businesses coming in. What do you feel your experience brought to the table over the other Dragons who had started their businesses from nothing?
Jenny: I came to pure entrepreneurship myself later in life when I went to Hanco (which then became YourCash), so I was in my mid-40s by then.
But as I reflected on how I turned from corporate career to entrepreneur, some of my reflections were, firstly, around my childhood where my grandparents were all entrepreneurs – builders, printers, etc. in my local town, so I came from quite an entrepreneurial background.
Yes, I went into a profession, but that was seen in those generations as safer and more secure and you’ve got the pensions and all of that good stuff. But I also dealt with entrepreneurs almost every day in my banking career, just on the other side of the desk.
One of my roles was as a business relationship manager and I had 200 clients out in the community. Everything from famers to builders to lorry driver to retailers. I was working alongside those entrepreneurs for all of my banking career, so I just felt like I’d stepped from one side of the desk to the other, to be honest – and it’s in my DNA.
What did you find was the biggest difference of going from one world into the other?
Jenny: Freedom, scary, exciting. You realise that there’s a lot that rests on your shoulders. The first month after we’d bought the business out, instead of me receiving a salary cheque on the 18th, I had to think about paying a quarter of a million pounds’ worth of wages every month and you feel responsible for people’s homes and families and that sort of thing. But equally, all of the freedom that comes with that and the responsibility to keep that business going and grow it.
Coming back to Dragon’s Den. Look After My Bills, in your own words, ‘negotiated hard’. What advice would you have for business owners who are looking for funding but are that sort of position? What negotiation tips do you have and what would win you over?
Jenny: I think what wins me and many investors over is that, besides investing in that business and that product, you are ultimately investing in that person or persons.
With the people standing in front of you, I’ve got to get a rapport with them straight away – that I admire them, I believe them, I’m confident that they can deliver on their proposal. The boys, Will and Henry from Look After My Bills, did negotiate hard, but that showed me that they had the experience to do that. I admire that. One of my other entrepreneurs accepted my offer before I’d even finished making it, but he was much younger and much more inexperienced.
Will and Henry did a great job of negotiating and Tej (Lalvani) and I got a very small slice of Look After My Bills, but it proved to be a great investment as they sold to GoCompare ten months later and we got a very nice return on a very small investment.
Anna: I think it’s interesting that because of them not budging much on their offer, Peter said that it shows a certain level of naivety, so it must be quite different between investors.
Jenny: Yes, but there’s quite a bit of gameplay in the negotiations – you’ve all got to play your own part. There’s admiration behind that hard negotiation stance as well. As an entrepreneur you’ve got to have some emotional intelligence as to where that tipping point is with the investor. You can push them so far, but you’ve got to realise where you’ll lose that investor, where they just going to sign out and say, ‘I’m out’.
Let’s come back to raising finance. Of course, we’re going through a difficult time at the moment – this is the first of the remote recordings we’re doing because of COVID-19. What advice do you have about raising finance in particularly tough times such as these?
Jenny: Is it any different in these times to pre-COVID? If anything, there are more options because of Microbusiness Bounce Back Loans etc around, so my advice is probably the same: cover a lot of bases in looking for those options.
First of all, think about the structure of what it is that you’re looking for – are your able to take any debt into the business? That’ll save you giving away equity. Equally, sometimes it’s a strategic thing to find an equity investor because you get smart investors in the business who will help to propel your business further than if you were trying to do it through the existing equity structure. It’s always a balance of what your business can take and what it needs and that strategic aspect.
I’m working with one of my businesses now on doing our first fundraise. I’m just educating them on taking those steps really carefully, to find the right structure of equity and debt and, crucially, the right people to come into the business. I always say to them, ‘This is like a snooker game: it’s not just about getting the first red ball down, but it’s about getting the black ball down, which is your exit.’
Every step is fundraise is important – you must think about how that impacts the next step and your eventual exit. But I think all those usual funding routes are there and, if anything, there is pent up demand from private equity and VCs to get money invested right now.
Has COVID-19 affected the way that you invest in or the companies that you’d be interested in investing in now?
Jenny: I don’t think it’s affected the way that I invest. Apart from not meeting in person, we’ve all got very used to tiled Zoom screens or Teams or Google. We’ve all got used to those virtual meetings, so the way in which I invest has not changed.
Maybe where I invest has changed. Some areas you might have thought of investing in pre-COVID, but in post-COVID they’re either not the right areas or there are certainly better areas which have capitalised on COVID. I always say that wherever there are challenges, there are opportunities, and it’s just watching which ones will rise out of this. My Didsbury Gin business pivoted into hand sanitiser and they’ve done a fantastic job. Did I think I’d ever be invested in hand sanitiser? No! But it was the right thing to do and they’ve done very well.
Anna: It’s been very much extremes – either a company has done very well or struggled quite significantly.
Jenny: But that’ll be the true test of the entrepreneur in dealing with that. My eldest son has three restaurants in London, and it has not been an easy time. However, he’s probably going to come out of this leaner, fitter, stronger and with a different strategic path, which will actually be a better one. You as an entrepreneur have personally got to have the resilience, the foresight and the vision to deal with that. And that’s what the key strength of an entrepreneur is.
Anna: And going digital has helped a lot of businesses. Ones that didn’t have a website before are very quickly learning and moving online.
Jenny: Yes – you’ve got to go where the consumer is going to go which is a huge shift to online as you say.
I’d like to ask a couple of questions about your views in business. I’ve read that your plan wasn’t to become a business owner, rather, you ‘take things when they arise’ and when your children were young, you’d ‘just think about the year ahead’, contrary to popular business advice of planning one, three, five years in advance. What’s your view on planning vs spontaneity in business?
Jenny: I mean, I always say that when I was 16, 18, 25, I didn’t really see much further ahead than the next year. As you get older, you tend to plan your runway out a bit more. But it’s always a balance for a business owner of never losing sight of today and the detail you need to do of today while balancing that with a vision of the future. And that’s a tricky thing sometimes – you can be lost in the weeds on a day-to-day basis and never have that time to think about the future.
But you can find different places to do that future thinking. I remember when I was very busy in YourCash with the turnaround work. Where my vision and strategy used to come from was when I was on the running machine at the gym in the evening or in the bath. I used to come back fuelled with what we need to do differently, so you just need to find those spaces to let your head clear and think about the future of the business. You must do that and not just be lost in the day-to-day.
Now I think I plan much further ahead, hence it’s actually driven my exit of YourCash because I’d been at the business for ten years. And I had half an eye on where cash was going as well in the future which proved to be quite prophetic. And equally I wanted another ten years in business doing other things, so focusing on the end game is quite important.
My next question was going to be about your exit from YourCash. Talk us through your exit plan – when did it begin, how did it unfold, did it change?
Jenny: When you reflect on these things, again, I think it happened on the day I did the management buyout in 2010. The reason for that was as soon as the business became independent from RBS, I straight away started getting courted by other independents to amalgamate with them, so I realised from day one of year one that there was an opportunity for a trade sale.
But I knew it wasn’t going to be right then when I put all of my energy and passion into buying this business out and mortgaged my home and I was on a journey and I was going to sell at an optimum time. But knowing those courtiers were out there, I played that dance with them for five years and it eventually reeled one of them in there for an exit. So there, you can see I was planning, even in 2010, to exit, probably five to six years down the path, which is what I did.
I think in any market, I’ve seen in the supermarkets, in industry, etc. I’d say all businesses compete on the ground. But at top level, CEOs all meet each other at conventions and industry gatherings, and all have quite a professional and grown up relationship. I always had those relationships with the bosses of the other businesses and there were always muted conversations, seeing if there were any areas of cooperation and synergies between us. There’s a lot of dancing around handbags before you come to the formal marriage.
Anna: I suppose it’s like networking of any kind, isn’t it? You’ve got to build it up quite slowly.
Jenny: And it’s important to do that. That’s a really good point – I had extensive networks across my industry, not just in the UK but across the globe. I would take plane trips across the globe to go to certain conventions to make sure I had face time with people, so I was out there and present and had a really good black book.
Finally, given your background with YourCash, what do you make of cash vs contactless, especially in this COVID-19 landscape? Is it still worth it for businesses to accept cash?
Jenny: Before I sold the business, there was also a challenge externally around the future of cash. And I think cash is still here for another generation in this country. It’s very entrenched in this country as it is in other countries such as Ireland and Germany. Yet if you look at other countries like the Nordics, they’ve been almost cashless for a very long time so where do we sit in all of this?
I still think there’s a place for cash in the UK for a while because I don’t think we have all of the systems to donate to charities, to pay for certain things for the elderly and the disadvantaged, so all of the systems aren’t there yet to digitally support moving to totally non-cash.
I do think there is a place for it and, to that end, that it’s important for retailers and businesses to accept cash, because not everyone is able or ready to move to digital. The consumers have to be educated and cajoled but not forced, if you know what I mean.
Yeah, of course it’s important in terms of budgeting or for people who may not be best able to manage their money. Do you think we’ll ever go completely cashless and if so, at what point?
Jenny: [laughs] Crystal ball again… I think we will, it depends how you define cashless, if you mean totally cashless.
Surely in the next 25 years we’d go cashless, I would’ve thought, providing all of the systems are there to cope with that. But if you look at the young people of today, they just don’t carry cash – at all.
And I myself would have always had cash with me and never have I used Apple Pay so much as in the past three months, and I’m much more comfortable with it now. That has forced buying habits but equally, I doubt very much that older people have changed their buying habits and the disadvantaged need to work with cash as well.
Anna: Well, I’ll wrap up there unless there’s anything you’d like to add.
Jenny: No, thank you for letting me come on your podcast. I’m delighted to come on any time and have a chat and happy to do it any other time you wish.
Anna: Thank you for coming on the podcast.
You can find out more about Jenny at jennybcampbell.com. You can also visit smallbusiness.co.uk for more articles on raising capital and choosing payment systems. Remember to like us on Facebook @SmallBusinessExperts and follow us on Twitter @smallbusinessuk, all lower case. Until next time, thank you for listening.