Peter Jones: business advice
Perhaps more than anyone else, Peter Jones represents the blurring of the boundaries between business and the celebrity entrepreneur culture that has emerged over the past few years.
Having made his millions through various business ventures - chiefly the Phones International empire he set up in 1998 - Jones found himself catapulted from the business pages of the more heavyweight newspapers to the gossip pages and celebrity magazines when he joined the panel of investors on Dragons' Den for its first series back in 2005.
Since then, his star has continued to shine. Through his TV company - Peter Jones TV - he has taken the concept of business reality TV to the US through American Inventor, featured in his own UK TV show Tycoon and remains one of only two dragons who have been with Dragons' Den from the very start. All this means Jones - all six foot seven inches of him - is now one of the most recognisable businesspeople around.
"I'm quite shocked how it's become more celebrity-oriented rather than just business," he admits. "My business is still very solid and doing really well and I'm still very much involved with it. But I'm dipping in and out of that [celebrity] world and that's still weird for me even today. To walk out of a restaurant and be photographed because I'm walking out of a restaurant is odd."
Now, though, Jones has set his sites on a bigger challenge than making money. In March he received government backing for his proposed national enterprise academy. The first academy will open in the south-east in 2009 but will take people aged 16-19 from all over the country and there are plans to open another in Manchester. Jones is putting around £5m of his own cash into the project, with the government matching his investment.
"I want to look back in 18 months and say ‘do you know what? I've done something fantastic'," he says. "Three to four hundred kids each year are going to go through the enterprise academy and we're potentially going to get 60-70% of those starting businesses and creating tens of thousands of jobs in this country."
Twenty-five years ago, Jones himself was an example of the kind of entrepreneur he has now pledged a considerable amount of money to develop. "I wanted a better life," he says. "I saw people driving around in flash cars and living in lovely houses. I wanted to earn money."
Initially, that's exactly what happened. Two years later he set up a computer services company providing goods and services to businesses. But then disaster struck the young Jones. "I failed to look after the most important thing which was the assets of the business," he says. "In other words, I didn't take out credit insurance. I was supplying people with products and in the late 1980s when the recession hit, it hit those companies which in turn hit me. I lost everything when I was 29. It was a very big lesson to learn."
Without the finance to start up again, he took a job at Siemens Nixdorf in its PC business division. "I didn't have a house, I didn't have a car and I didn't have much money," he recalls. "It's very difficult to start a business when you're in that predicament. But what I was doing was buying time and earning enough money to go and start up again. And I saw a huge opportunity in the mobile phone market."
The result was Phones International, based around the ‘single brand distribution' model. By only selling Eriksson products, Phones International quickly became its biggest customer in Europe. At the end of its first year the company turned over £14m and today the group turnover is around £150m. Jones was finally back where he wanted to be.
Into the limelight
But Jones' life changed for ever with the unprecedented success that was Dragons' Den. Over the past five series, Jones has invested over £500,000 in a variety of businesses including Levi Roots' Reggae Reggae Sauce ("in certain months we've beaten Tomato Ketchup for the first time in their history," he says), the iTeddy - Argos' best-selling product last Christmas - and Wonderland magazine, his first investment on the show.
Like the other judges on the programme, Jones finds himself frustrated at the lack of basic preparation some of the people looking for investment have done. "Sometimes they haven't even thought about it properly; they just want some attention and try to wing it," he says. "But you're going to be caught out. You're dealing with people who have been there, seen it and done it."
Some of the more basic mistakes people make in the Den are replicated in real life, Jones believes. The way people dress is a personal bugbear. "I believe first impressions count and if they come on in jeans and a ripped T-shirt, I think ‘you don't really want this'. No bank manager is going to give you £150,000 when you look like you've been dragged through a bush backwards.
"The other mistake people make is that they don't know their market well enough and they get their numbers completely wrong," he adds. "You don't have to be an accountant to understand top-line numbers. At least understand what revenue and sales are and the difference between gross profit and net margin."
His message to entrepreneurs is simple: research the market thoroughly, test it out on people outside of friends and family and make sure you are going into it for the right reasons. "A lot of people set up businesses because they've been made redundant or they've nothing else to do," he says.
But there's no doubting Jones' passion for business or his determination to pass on his ample experience to budding entrepreneurs. "Business is fun," he says. "You've got to have fun. It's what gets me up in the morning and it's the reason why I get home late at night. I'm going to continue to have fun but I want to continue to invest and support UK plc because I really do believe in this country. That's the challenge for me. I'm on a mission."
Extract from full interview conducted by Nick Martindale for New Business magazine
Post Date: June 30th, 2008