Don’t believe the naysayers — it’s never too late to start a business - Sunday Times

A focus on young tyros neglects those who have a richer set of skills and broader experiences.

Ask most small boys what they’d like to do and they’ll probably say something predictable like star in Doctor Who, be a centre forward or drive anything that goes fast. Not me. Even at the age of five, I wanted to be something I couldn’t even spell. An entrepreneur.

I ran quite a few businesses while still at school and then learnt from roles at Procter & Gamble and Deloitte, so that by my mid-20s I was raring to go. I’m lucky not just because I’ve fulfilled my dream but because some people don’t realise until much later in life that they want to be their own boss.

These past few years, in my reinvention from CEO to investor, mentor and chairman, I’ve met many of these later starters. Approaching or in their middle age, with a mortgage, family and wealth of experience, they worry that time and circumstance are against them. My response is always the same: “It’s never too late to be an entrepreneur.”

Half, like me, know it’s their destiny. The other half fall into it following years as a salaried employee. They are not only CEOs but middle and senior management figures with the kind of wisdom and maturity British business is crying out for. In fact, recent figures from the Global Entrepreneurship Monitor suggest that business founders over 45 account for up to a third of all new entrepreneurial activity.

They’ve got resilience, determination and understand what makes a team tick. They’ve made mistakes and learned from them. They’re empathetic, see opportunities in different ways and have a strong network of contacts.

The challenge is how to make the leap from manager to owner. It’s not ideal starting something from scratch, with all that inherent risk and time spent testing and pivoting. Instead, consider one of these.

First, a business buy-in. There are so many sleeping giants out there — medium-sized companies that have stagnated or are run as lifestyle ventures by owners who don’t have the energy or skills to grow it further and are thinking of retiring or selling. I recently bumped into a former HomeServe executive, Craig Wright. A trained accountant, he was managing director of our furniture warranties business but had ambitions far greater than working for me! Instead of starting a business from scratch, he created Wright Industries, which buys small and medium-sized engineering firms that need direction, energy, investment and leadership — and he’s doing really well.

Or buy out a company you’ve worked in and feel could be transformed with you at the helm. I helped set up the Mortgage Advice Bureau in Derby in 1991 after meeting Simon Blunt at a franchise exhibition. It grew steadily until Peter Brodnicki joined from Legal & General. As MD, he accelerated growth until he realised he wanted more freedom to run things his way, so he bought a majority shareholding and became the majority owner, armed with acute insight of the market after years as the paid boss. It’s now a listed company worth £500 million.

Then there’s the “side hustle” option, in which entrepreneurs slowly grow their personal business while staying focused on their main bread-winning roles. These are passion projects or even ideas that morphed into experiments that became going concerns and eventually need a proper structure to scale.

Whatever your favoured approach, focus on a field you’re truly interested in. You don’t need to have spent your entire career working in it but you do need to feel passionate, aware that it plays to your strengths. And be prepared to work harder than ever, because your only boss will be an unforgiving and unpredictable market. There’s no one above telling you what to do anymore. It gets lonely, but the rewards are immense.

Next, be proactive. Look for targets and meet owners who are looking to sell or would benefit from you acquiring them. Also, find a reputable business sales agent with sector-specific experience. They should know which businesses are ripe for an approach.

Once you’ve done due diligence on the growth opportunities, work out the funding. If you opt for vendor financing, you’ll be able to pay it off in stages. Or consider remortgaging your home. Existing assets can strengthen your ability to secure backing. Otherwise, find a private equity house or high net worth individual who’ll co-invest with you.

Consider different share structures. Sometimes, a percentage of the ordinary shares (between 5 to 12 per cent) can be given to senior management by way of an incentive, known as “sweet equity”. Typically, these shares — offered at a lower price than for other investors but requiring a preferred return for the ordinary shareholders first — encourage management to grow the company at speed.

In 2004, Kim and Simon Morrish bought Ground Control, a commercial gardening business with an £8 million turnover. Using mainly financing from the seller, its turnover is now around £200 million and it has pivoted into a multi-service business providing maintenance to 55,000 sites throughout the UK. Their tactic was to send an email teaser to regional accountancy and law firms who’d have a better idea of company owners looking to retire and without a succession plan. From there they engaged with brokers to construct the best deal.

Too often when we talk about entrepreneurialism we focus on young tyros, neglecting those who have a richer set of skills and broader experiences, ambitious people who feel they’ve got that big job still in them. And with life expectancy increasing, retirement is happening at a far later stage. I’ve just written my career plan for the next 25 years!

It’s why I’ll always remember one of the worst pieces of advice, in retrospect, that I’ve ever heard. With HomeServe going great guns, someone told me: “Well, Richard, if you haven’t made it by 40, you never will.” What rubbish. The best new entrepreneurs are often those who’ve spent decades watching, learning, doing and dreaming. It’s never too late.

Richard Harpin is founder and chairman of HomeServe and Growth Partner , and Owner of Business Leader Magazine