Peter Cullum formed Towergate Partnership in 2005 after a career in insurance.
Under his chairmanship, Towergate has become Europe’s largest independently
owned insurance intermediary, with sales of £2.5 billion and a workforce of
5,000. He recently created a centre of entrepreneurship at Cass Business
School, providing £10m of “seed corn funding” there for budding
entrepreneurs.
What is your entrepreneurial background?
I came into entrepreneurship by accident when I joined a small insurance
company as chief executive in 1991. Then in 1993 I led a management buyout.
We bought the company for £6m and sold it two years later for £32m. We were
quite pleased with the result and that was the point at which I recognised I
would become unemployable.
We kicked off Towergate in 1997 and had our share of luck. Most of our growth
was by acquiring other companies — in the past 10 years we have acquired
more than 150 businesses. We are in a fairly traditional space and that made
it easier in the sense that there wasn’t a lot of innovation. So our
particular model worked far better than we could ever have imagined.
Why did you agree to become a judge?
I was a judge last year and I got the bug. I found it quite inspirational
hearing other people’s stories, listening to how these guys, through all
sorts of adversity, had created really successful businesses.
Why is the Entrepreneur Challenge important?
When a bank is offering £35m of interest-free money, you have to take that
seriously.
It doesn’t happen very often.
Nearly half the workers in Britain are employed by businesses with fewer than
50 people, so enterprise and entrepreneurship are incredibly important to
the economy. I believe successful business people in all spheres — small and
large — do not get the recognition in the UK that is afforded their
counterparts in America and other leading economies. My crusade is to get
more recognition for successful entrepreneurs and I believe what Bank of
Scotland Corporate is doing with The Sunday Times will help.
What will you look for in a competition entry?
Passion, vision and having real energy and focus. They are all good things,
but in addition to that I am looking for a robust business plan. With most
businesses there must be some form of differentiation. It’s a tough call to
make a success out of simply doing what everybody else is doing because the
sole criterion then becomes you do it cheaper. I am also looking for
evidence of good execution. A lot of people have great ideas but maybe do
not have the necessary skill. To an extent we need to improve the skills of
entrepreneurs to help them become even more successful.
How important is networking to an entrepreneur?
Delving into my experience, we have made 150 acquisitions, more than one a
month and much of that has come through networking. We know the market, we
know the people and we keep in touch with them. A lot of people are picking
up the telephone to us now and saying, can we have a conversation? That’s
not because they have picked us out of the Yellow Pages, it’s because we
have taken a lot of trouble to make sure we are keeping in touch with who we
believe are key influencers in our marketplace.
Networking is fundamental to most businesses. There’s no time wasted on
reconnaissance as far as I am concerned. And despite technology, the
internet and the way the world is changing, I still think business is very
people-orientated, especially in insurance. We can have the smartest
technology the world has ever invented but if we don’t get the people right,
we are going to flounder.
What makes a successful entrepreneur?
You’ve got to have a great idea, with legs. A lot of people have great ideas
but they are not sustainable in a competitive environment.
It’s about great leadership skills, too. If you want a great company, you have
to find and keep great people. I can only talk for Towergate, but our
balance sheet is the people and that’s what we think is our big
differentiator. We do try and talent-spot as best we can and keep our good
people.
You have to keep them motivated, stimulated and rewarded. One of the things we
have done is set up an employee benefit trust where the staff own 2% of the
company. There’s probably about £60m in the fund at the moment.
We like our staff to think they are mini-entrepreneurs themselves.
How important an incentive is money to entrepreneurs?
Entrepreneurship is about wealth-creation. People who feel embarrassed about
talking money partly miss the point.
I do believe there have to be goals. Part of the key performance indicators
for an entrepreneurial business should be the financials. We have a mantra
at Towergate — make money, have fun and do good. And I don’t think any of
those are mutually exclusive.
