Sir Philip Green does it. So does Sir James Dyson. But Sir Richard Branson
doesn’t. It is a common dilemma for entrepreneurs large and small: should
you stick to the same sector for your next project, or are the skills you
have acquired sufficiently robust to tackle any field?
Rebecca Harding, founding partner of think tank Delta Economics:
Our research has found that a third of all businesses are owned and managed by
people who have set up a business in the past. Some people say you need
specialist knowledge in areas such as biotechnology or IT, but entrepreneurs
are capable of growing those skills themselves and through their team.
Serial entrepreneurs have talent in financing, sales and marketing, and are
very driven; it’s more about that than technical knowledge.
Dr Adrian Atkinson, chairman of Human Factor International:
It is the attitude to risk that makes the difference. If you are willing to
risk things, you are more likely to go into areas you don’t know much about.
People such as Dyson are very low-risk entrepreneurs who want to get things
exactly right.
Branson is a huge risk taker, personally and professionally. He did the exact
opposite of what his accountant advised him when he was considering starting
his own airline. When you move into new areas, you have to learn different
concepts quickly or you will fail. If that seems too much of a challenge,
don’t do it.
Duncan Bannatyne, serial entrepreneur and star of Dragons’ Den:
Business is business and you can learn about and analyse any sector you want
to go into. The best way to learn about a sector is by going into it. If you
have successfully set up a business, you can take the cash out of that and
use it to fund your next venture - I financed my fitness and hotel company
with my own cash for the first two years. If you need to raise finance, get
back to the people you’ve worked with before and who you’ve already made
money for.
Stuart Winton, head of strategic relations, Bank of Scotland Corporate:
I deal with high net-worth entrepreneurs and they’re not risk takers, they’re
risk managers. They go into things in minute detail and stick at what they
know. They never commit a huge amount of their own capital to something that
they are not experts in and they don’t take wild risks. They break down
business into simple components. You still get mavericks but underneath it
all you find the attention to detail. Investors go back and look at the
track record.
Matthew Riley, founder of four companies including Daisy Communications:
I always look for something I have an interest in or a knowledge of because I
want to use my networks of contacts. All my businesses have been in the
technology field and it would be daunting to go into something completely
new.
You have to be aware when you take advice that it’s sometimes in other
people’s interests to go into other areas, but you’re the one who will be
left holding the baby. I always consider the worst case scenario and try to
limit my risk. I normally use the same backers, as they’ve got a proven
track record I can trust. It’s a two-way street: you’ve got to be able to
trust each other. It’s not just about the money, it’s about the long-term
relationship.
