TEXTS 8.
lnvestment
The Ad Man
JOHN BANKS
The Banks Partnership, London.
Undeterred by the deep gloom
~at has hit the advertising
mdustry, John Banks is going it
alone. A former regional chairman
of Young & Rubicam and the man
behind the 'Tell Sid' gas privatiza-
tion campaign, Banks decided last
summer that, despite the record
number of redundancies among
his colleagues, the time was right
to set up his own agency.
His reasons were as much
personal as anything else: having
run the London office of Young &
Rubicam for five years, he had
been put in charge of their inter-
ests in Europe, Australia and
Africa. 'I was out of London three
weeks of every month,' he says,
'and spending a large part of my
life at 35,000 feet. I felt it was time
for a change.'
The Cleaner
CAROL AYREY
Dolly Duster, Shropshire
There cannot be many people who
would quit their job as a finance officer to
become a full-time cleaner. For Carol
Ayrey, however, the move was the only
logical one if she wanted to start her own
business.
The advantage of setting up her own
cleaning service was that it required only
a small capital outlay. This was an impor-
tant factor since she and her husband,
who is a tax inspector, were anxious not
to get into debt. They used S::1 .o~o from
their savings to buy a car and equ1pment,
and this investment entitled Ayrey to a
year's enterprise allowance of S::40 a week.
Before she left her job at the College of
Further Education in Bridgnorth
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To launch The Banks
Partnership, John Banks put his
own money on the line - although
he has one private hacker who
prefers anonymity. They aim to
plug what they feel is a gap in the
market by offering clients a small,
privately-owned British company
turning in high-calibre creative
work and geared to giving old-
style value-for-money adver-
tising.
'Many agencies got into finan-
cial trouble in the Eighties by
over-extending themselves.
Consequently, they now face huge
debts and are having to reduce
their costs by cutting back on staff.
However, if you structure an
agency during a recession you
don't have the surfeit of people
and huge expense accounts you
once had.
'The cost of setting up in busi-
ness today is far less than it was.
The deals you can do are extraor-
dinary: I'm paying f:20 a square
foot for an office in Mayfair, and
Shropshire, she did three months of
intensive market research, going from
door to door in up-market local areas, to
find out what kind of cleaning service
people might want.
'I found 1O people who wanted to use
me,' Ayrey says. 'But when it carne to
actually setting up, the drop-out rate was
60 per cent.'
Refusing to be discouraged, Ayrey
launched Dolly Du ster on August 19.
Equipped with mop, broom, vacuum
cleaner and an array of ecologically-sound
products, she promises her customers an
environment-friendly 'Green Clean'. 'l'm
concerned about the environment,' she
says. 'And I wanted my service to be a bit
different.' The green theme is continued
with her green-and-white Citroen 2CV
and her uniform of emerald, navy and
white.
After less than tour weeks in business,
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I've got the first year rent-free.'
However advantageous the
financial conditions may be,
Banks admits to anxious
moments. 'People say that when
you start a company you don' t
sleep at nights, but if you start one
in a recession then you don't even
go to bed. It does get easier once
you get through certain pain
barriers, but I know now why
people don't do it too often. One is
risking an enormous amount of
money, after all: most agencies
that are going to survive need
between f:750,000 and f1 million.
We've been going for six weeks
now and I think I can say that the
light at the end of the tunnel is real
light rather than a train coming
the other way.'
The risk factor: 30 advertising
agencies have ceased to exist over
the past year; 2,000 fewer people
are employed; there h as been a
nine per cent decline in adver-
tising expenditure for two y ears
running.
she had already hired a part-time helper
and attracted 16 new customers, mostly
acquired by word of mouth. They range
from pensioners who cannot manage
their own housework to professional
couples who are out at work all day.
The current financial climate has not,
she believes, caused people to cut back
on their use of home help. 'Housework is
a necessary evil, even during a recession.
And people are always prepared to pay for
someone else to do it.'
The most difficult thing is the physical
exhaustion,' she admits. 'But my long-
term aim is to withdraw from the day-to-
day cleaning and concentrate on the
administrative work. lt's hard now, but the
future will be different, I hope.'
The risk factor: A third of small busi-
nesses cease to trade within three years
and half of them fail within five years.
g.
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This
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 TEXTS 8.2

The Shopkeepers
DAVID CURTIS AND Lucv COLMER
Party Party, London
have meant taking on crippling a cocktail party for 250 guests -
served by the entire family elan if
loans,' says Lucy. Then they hit
necessary.
on the idea of starting their own
catering firm and party shop. Despite the recession, they feel

T
he recession hit home 18 'We've always enjoyed catering for strongly that they have found a
months ago for David Curtis friends, and with a big family formula for success: 'Even during
and his wife Lucy Colmer Lucy has had lots of practice at hard times, family celebration s are
when David was made redundant organising parties,' says David. the things people tend not to cut
by Majestic Wine. lt was a crip- They found cheap premises to back on, especially if they are for
pling blow, and with four children rent in Gospel Oak, north their children,' says Lucy, who,
aged between seven and sixteen to London, and immediate ly set after bringing up four children of
support, they worked their way about rebuilding the place - doing her own, has perfected the art of
through his pay-off quickly and most of the work themselves in making theme cakes in any imag-
ended up on unemploy ment order to save money. After six inable shape or design.
benefit. months intensive labour, Party 'We provide really good, edible
Devastate d by the experience of Party finally opened on July 10, food, friendly service and value
being made redundant , David was financed by a bank loan and an for money,' she says. And, as
reluctant to take on another job in enterprise grant of l l 5,000. David points out, 'people don't
case he lost that too. The obvious Behind a small shop crammed recycle birthday cards, which has
solution, therefore, was for David with dinosaur costumes, invita- to be good for business'.
and Lucy to set up their own busi- tions, balloons and novelties is a The risk factor: To Let signs are
ness. At first they intended to go compact kitchen where the rife; a tenth of Oxford Street
into the wine trade but it proved Curtis-Col mer team will cater for shops are empty; sales forecasts
too expensive to finance. 'It would anything from a child's birthday to are the lowest since 1984.

The Hotel·ier
JOHN ROEBUCK
Etrop Grange, Manchester
Eight years ago John Roebuck, a high
flying thirtysomet hing executive with
Trusthouse Forte, saw a 'For Sale'
sign sticking out of a hedge on the
road between Manchester and
Altrincharn. He was on his way home
from work, but decided to investigate.
He found Etrop Grange, a deserted
Georgian mansion, and fell in love
with it.
It was, he knew, the perfect place to
realize his life-long dream of owning
and running his own country-house
hotel. He was not daunted by the fact
that the 22-room redbrick building
was semi-dereli ct and just across the
road from Manchester Airport.
He persuaded his bank manager to
lend him and bis wife Sue enough to
buy it as a private house for ~80,000.
They moved into its one hab1table
om with their two-year-old daughter
ro . . d
and their dog. They were soon Jome
by the pest controllers and builders as
the long, hard slog of turning their
dream into reality began. Within a
year they had opened a restaurant. Sue
did the cooking during the day and
John rushed home from his job with
THF to don chef's overalls at night
while she served. The hard work was
worth it, though. The restaurant was a
hit both with the locals and people
using the airport.
Two years ago, John decided the time
bad come to leave his secure job to
help Sue expand Etrop Grange into a
full-size hotel. At that time, the
economy was not in recession, but
John says it would not have made any
difference if it had been. 'It is the
realization of a life-long arnbition for
both of us. The ultimate challenge in
the hotel business is running your own
show. You 've got to grab the opportu-
nity when it comes.'
The first 19 individually designed
bedrooms of Etrop Grange Country
House Hotel are ready for occupation.
The remaining 22 rooms and a new
restaurant follow at the end of the
month. It will, they hope, be one of
the best country-house hotels in
Britain, 'oozing luxury and opulence'.
With f3.5 rnillion and an incalculable
arnount of time, emotion and energy
invested in Etrop, John and Sue are
determined that they will succeed.
'This has taken up too much of our
Iives for it not to work,' says John.
'Nothing is going to stop us now.' But
is it feasible to open an upmarket
country-house hotel on the edge of an
airport already well-served by hotel
chains?
'The bank keeps asking me that,' says
John. 'To us the location is just
perfect, and surprisingly it is not as
noisy as you would expect. We're so
close to the runway that somehow we
don' t seem to hear the planes. And
our position does present us with
interesting marketing possibilities.
Other country house hotels might
boast a helicopter pad, but do you
know of any others where you can
land your jumbo jet?
The risk factor: More than I 00 hotels
have gone into receivership so far this
year.

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14.
TASK SHEET 8.1

Investment
Reading O Work in groups of five.

Your group is an investmen t company. You have won a prize for making good invest-
ments over the past year. ~20,000 will be invested in a small business of your choice.
You will receive the income from the investmen t. You must decide which of five poten-
tial businesses is likely to be the most successful in the future and eventually bring you
the highest income.

There are thirteen criteria listed below. When choosing a business to invest in, how
important is it to receive a 'Yes' answer for each of them? Give a score out of five for the
importanc e of each 'Yes' .

=
5 = indispensa ble 4 extremely important 3 =very important 2 = important
1 = quite important O = unimporta nt

Place and time: is there a market for this product in this place at this time?

Competiti on: is the field reasonably free of competitio n at the moment?

Risk f a ctor: is the re a low risk factor (i.e. not many similar businesses h ave gone
under recently)?
•
Capital requirements: has it already got most of the capital it needs except for my
possible investmen t?

Size: is the business a manageabl e size now and is it ready to grow bigger?

Short- or long-term goals: are the business men and women interested in long-term
growth with high ambitions of becoming a major company one day?

Originalit y: is the business distinguish ed from other, similar businesses in an

o riginal way that makes it seem attractive?

Research: has thorough market research been done, whether officially or

unofficially?

Quality: are the product or service, the pre mises and equipme nt of high quality?

Pricing and potentia/ returns: is there a realistic match between quality, cost and
market (i.e. a low-cost produ ct produced economica lly for an existing mass market,
or a high-cost, high-qualit y product for an existing elite market)? ..i
Experienc e of the market: are the people in charge experienced in their chosen
field?

Experienc e in business: are the p eople in charge experience d in setting up and C

running a business?

Personal character: are the people in charge energetic, enthusiasti c and

resourcefu l? Do they have intelligenc e, initiative, resilience and courage?

A~
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© Will Fo rsyth I 9 96. Publlshed by Heinemann English Languagc: Tcaching. lb.ls shc:et
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 TASK SHEET 8.2

O Form flve new groups of student s from each of the origina l groups .

1 Read your group's descript ion of one of the five businesses.

2 Make notes on the business in the Business/Company Profile.

3 Decide which of the questions in A you can answer 'Yes' to.

Return to your origina l group with your comple ted Busine ss/Com pany
Profile .
invest
1 Compar e the five businesses you have read about and choose one of them to
in.

2 Prepare a succinc t report of your group's decision and your reasons for it.
busines s
3 Make your report to the class. Find out how many groups chose the same
as you.

Speaking Q Work in pairs or groups of up to five people . You are partner s setting up
a busines s. You are going to ask the class to invest init.
before.
1 Find out what your member s can do, what they know about and have done

2 Decide what kind of business it will be and make notes about it on the
Business/Company Profile.

3 Prepare to explain your business to the class.

O Describ e your busines s to the class.

Choose one of the class's busines ses to invest in. You cannot choose your
own.

o"'
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